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Occupying an enviable position both physically and politically in the heart of Europe, Belgium has benefitted extensively
from its location in recent years, and the development of the EU has also provided considerable impetus for growth. The headquarters
of the EC and home of the European Parliament and NATO, Belgium's capital, Brussels, is the centre of European politics. With
the recent enlargement of the EU, the country is also at the centre of a market of 0.5 billion consumers. A well-developed
infrastructure combined with world-class education and technical expertise, as well as a physical proximity to the markets
and capitals of Western Europe, lends local firms many advantages and has made the country a highly attractive base for international
companies to conduct business in Europe.
Measuring only 30500 km2 with a population of just 10446000, Belgium is one the smallest countries in the EU, and yet enjoys a GDP of €288.09 billion
and a position among the world's ten largest trading nations. With the population divided between the Flemish speaking Flanders
region in the north, French speaking Walloon region in the south and a German-speaking region in the west, Belgium occupies
a unique cultural position at the crossroads between Germanic and Latin Europe. With French, Flemish and German as official
languages and English widely spoken, the linguistic and cultural diversity is a key advantage for conducting international
business in the country.
The Belgian pharma sector: an international heavyweight
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As well as its worldwide reputation for Moules Frites, chocolate and beer, Belgium is also an internationally renowned centre
of pharmaceutical expertise. With the second highest number of pharmaceutical exports per capita, processing and distributing
100–150 tonnes of pharmaceutical products per month, the country is one of the biggest centres in the world for pharmaceutical
distribution. It is also home to the European headquarters and main distribution centres of many international pharma companies,
while Baxter, Schering Plough, Pfizer, Sanofi-Aventis, Roche, Abbott and GlaxoSmithKline (GSK) have all made significant investments
in the country. With London, Paris, Amsterdam and Frankfurt less than 200 miles from Brussels, and 140 million consumers within
300 miles, Belgium offers excellent access to European markets. A well-developed infrastructure and the major port of Antwerp
facilitate importation and distribution, while a skilled local labour force enables high quality, high volume manufacturing
output.
As well as attracting foreign companies, the country has also produced its own international heavyweights — most notably Janssen,
UCB and Solvay. In addition, Belgium is home to a plethora of innovative small and medium enterprises including many cutting
edge biotechnology companies and a highly developed service sector.
One industry's decline is another's gain
Luc De Langhe MD, C.E.L.forpharma
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Equally important to the country's pharma success are the local and regional governments, which have played roles in supporting,
promoting and developing the industry. A favourable corporate tax system, cheap rent, the establishment of bio-clusters and
additional subsidies have attracted pharma companies to the region and helped ensure their continued presence. With the decline
of Belgium's traditional heavy industries — specifically mining and steel — the government has invested heavily in developing
the country into a knowledge-based economy.
Two key tax incentives, unique to the country, have been particularly important for the pharma industry: a 65% tax deductibility
on the remuneration of all staff working in R&D and an additional 80% deduction from all future earnings from the ensuing
patents. As Yves Verschuren, Managing Director of chemicals and life sciences umbrella organization Essenscia, observed: "When
Belgian companies deduct these charges, it allows them to attract top talent, which is usually expensive."
With one in every four employees in the Belgian pharma industry working in R&D, the scheme has helped make the country a leading
centre for pharmaceutical R&D activities.
