Belgian Prime Minister Guy Verhofstadt called Wednesday for increased Japanese investment in Belgium, saying his country has steadily carried out economic reforms, including corporate tax cuts.

Verhofstadt, who is on a three-day visit to Japan through Thursday, said Belgium lowered corporate taxes to an average 34 percent from 40.7 percent beginning Jan. 1, with a lower rate of between 24 percent and 25 percent for small and midsize companies — lower than most other European Union member states.

“Major economic reforms in Belgium in the last three years make it even more attractive for foreign investors, especially Japan,” Verhofstadt told a meeting of about 30 corporate executives, including Yoshihide Munekuni, chairman of Honda Motor Co.

The prime minister said 250 Japanese companies are operating in Belgium, 50 of which have the headquarters of their European operations based in his country. He added that Japan is the second-largest foreign investor in Belgium.

The ratio of Japan’s Belgian investment to its overall foreign investment stood at 4.9 percent in the first half of fiscal 2002, up sharply from 1.6 percent the previous year, he said, adding he hopes the ratio tops 5 percent next year.

Verhofstadt noted that despite the global economic slump, Belgium has accelerated the reduction of its budgetary deficit, with the ratio of public debt to gross domestic product expected at 101 percent in 2003, down from 140 percent about 10 years ago.

Belgium has managed to run its economy with no budget deficit for three straight years and is one of the few countries in Western Europe to do so with a light surplus, in stark contrast with Japan’s economic slump and growing public debt, he said.

“Next year, we shall have a public debt to the GDP ratio with two figures, not three like we have today,” he said, stressing the fruits of administrative and economic reforms.

The Belgian leader told Kyodo News in an interview earlier in the day that he had visited New York, Frankfurt and Hong Kong before coming to Tokyo.

In addition to the tax cuts, Belgium has also allowed investors to obtain a legally binding estimate from financial authorities about the tax implications of a particular project before committing any money or signing an agreement, he said.

“It is a new opportunity to come to Belgium,” Verhofstadt said. “We are also the gateway to the European continent, very clearly, because we are the de facto capital of Europe and European institutions.”

As another way to help Japanese companies operating in Belgium, he said the two governments are making progress in concluding a bilateral social security pact to prevent double payment of pension premiums by expatriates. They hope to finalize the agreement by the end of the year.

Japan and Belgium began prenegotiation talks on the arrangement in November 2001 and are expected to enter full-fledged discussions in the fall, the prime minister said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.