Foreign investment in Belgium generally takes the form of establishing subsidiaries of foreign firms in the country. Belgium is the economic as well as the political center of Europe. The Belgian government actively promotes foreign investment. In recent years, the government has given special encouragement to industries that will create new skills and increase export earnings. In 1982, a new system of tax exemptions encouraging investment in corporate stocks took effect. The government grants equal treatment under the law, as well as special tax inducements and assistance, to foreign firms that establish enterprises in the country. There is no regulation prescribing the proportion of foreign to domestic capital that may be invested in an enterprise. The foreign investor can repatriate all capital profits and long-term credit is available. Local authorities sometimes offer special assistance and concessions to new foreign enterprises in their area. Since the start of EU's single market, most, but not all, trade and investment rules have been implemented by Belgium in order to be in line with other EU member nations.
As of 1999, foreign investment stock in the Belgium-Luxembourg Economic Union (BLEU) totaled $158.6 billion. In the boom years of 1999 and 2000, foreign direct investment (FDI) inflows into BLEU reached record levels: $133 billion in 1999 and $246 billion in 2000. The global economic slowdown sharply reduced inflows in 2001 to about $51 billion, but this level was well ahead of the $12 billion FDI inflow in 1997 and $23 billion in 1998.
Countries with large investments include the United States, Germany, United Kingdom, Netherlands, France, and Switzerland. Total US investment in all industries was $17.7 billion in 1998. In 2002, FDI inflow from the United States into BLEU totaled $8.4 billion ($3.5 billion to Belgium and $4.9 billion to Luxembourg).
Belgium has well developed capital markets to accommodate foreign finance and portfolio investment. More than half its banking activities involve foreign countries. The world's first stock market was opened in Antwerp in the 14th century. At the end of 2000, the Brussels Stock Market merged with the Paris and Amsterdam bourses (and later Lisbon) to form the Euronext stock exchange. Euronext forms the largest (in volume) multinational stock and derivatives exchange in Europe. As of August 2002, Euronext listed 1,517 companies, about 370 foreign, with a total market capitalization close to $1.6 trillion In December of 2002, market capitalization of the Euronext listings had fallen to $1.48 trillion and the number of listed companies to 1,484. In 1996, the European Association of Securities Dealers Automated Quotation (EASDAQ) Exchange, opened in Belgium modeled on the NASDAQ electronic exchange, dedicated to young dynamic "dot.com" start-ups. From the first quarter in 1999 to the first quarter 2000, the EASDAQ composite index soared from about 32,000 to a peak of 85,000. As the dot-com bubble burst, the EASDAQ composite index collapsed to below 15,000 by the first quarter of 2001. In April 2001, NASDAQ bought majority ownership and renamed it NASDAQ-Europe. As NASDAQ-Europe, a low of about 2,300 was reached in the first quarter of 2003. At the end of the second quarter 2003, the composite index was at 3,043.
Belgian investment abroad is substantial in the fields of transport (particularly in Latin American countries), nonferrous metals, metalworking, and photographic materials. In 1999, outward investment from Belgium totaled $119.8 billion and in 2000, $82.34 billion.