Looking for a Place to Set up Your R&D and Innovation Activities in Europe?

Flanders, the Northern Region of Belgium, Has All the Assets You Need to Innovate!

Flanders is a key location for innovation and R&D within Europe.

Why should Flanders be your investment region of choice?

1. We have a culture of innovation and R&D known all over the world

2. Our government strongly supports R&D and innovation

3. Our tax friendly system, allowing companies to recover part of their R&D investment

Innovation and R&D Omnipresent in Flanders

Innovation is Deeply Embedded in Flanders

According to the EUROSTAT 2010 Community Innovation Survey, Belgium ranks third in the list of most innovative countries. Belgium owes its place to a 60% portion of Belgian companies having performed innovative activities in the period 2008-2010. This demonstrates that innovation is already largely present in Belgium and Flanders.

Innovation Activity and Co-operation during 2008-2010: Top 10 EU Countries.

Source: EUROSTAT 2010 Community Innovation Survey

Support for R&D and Innovation

Full Backup

Innovation is highly supported by government, at both federal and regional levels.

The government of Flanders declared " Flanders in Action*” the central theme for its policies. This program aims to help Flanders gain a leading position among the best performing European regions.

In the Flanders in Action program several of the identified goals are related to R&D:

a. Flanders commits to invest 3% of its GDP in Research & Development, with a focus on several key areas:

  • Logistics and transport;
  • ICT and healthcare;
  • Food and health;
  • New materials and nanotechnology;
  • Energy and the environment.

b. A system output monitoring for research will be put in place.

c. There will be more opportunities for research talent. Attention will be given to communication on and popularization of scientific and technological education.

Flanders aims to establish continuity in R&D and innovation investments; this implies a marked preference for integrating R&D with the economic policy.

Substantial Funding Available

Flanders provides a wide range of R&D incentives in the form of fellowships, grants, subsidies, etc. Funded projects include mainly.

  • Feasibility studies (funding rate of 40 to 50%,ceiling fixed at EUR 50,000);
  • R&D projects for new innovative products (25% funding rate for development activities, 50% for industrial research activities, with possible uplifts of 10 to 20% for SMEs, with a maximum of 60%. The grant is capped at EUR 3 million);
  • The Baekeland-mandates' program provides funding for pre-doctoral researchers during four years. The pre-doctoral researchers are expected to cooperate with private companies in a specific sector.

A Tax Friendly System for R&D Activities

What is R&D for Tax Purposes?

To define R&D, reference is made to the Frascati Manual, published by the OECD. The manual stipulates that:

Research and experimental development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.”

Based upon this definition, three activities are considered as R&D:

  • Basic research: experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view.
  • Applied research: original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective.
  • Experimental development: systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed at producing new materials, products or devices, at installing new processes, systems and services, or at substantially improving those already produced or installed.

Further to the above definitions, it is clear that R&D should not only be sought within R&D centers.

Unparalleled R&D Incentives in Europe

According to the recently issued Annual Salary Survey (2012) by US-based professional services firm Deloitte, Belgium – and Flanders as a region – offers the best R&D related incentives in Europe.

Thanks to these fiscal measures, companies can recover up to 80% of the withholding tax on professional income for their researchers, provided certain conditions are met. Employment costs are cut significantly as a result. This gives companies in the region a major advantage over their competitors in neighboring countries in attracting talent. In the conclusion of its report, Deloitte stated that none of the other countries investigated had such an advantageous, structurally in-built system.

Traditionally, Belgium is one of the countries with the greatest success rate in attracting multinational headquarters, thanks to fiscal security.

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