20 June 2017
The future of treasury in Belgium
Karen Van den Driessche
Assistent Treasurer at Avnet & President at ATEB
With the treasury landscape evolving considerably over the last few years, we wondered what impact this has had on the role of the treasurer? And why Belgium is still the perfect hub for treasury? Michel Verholen and Karen Van den Driessche elaborate on the matter.
The number of large-scale treasury centers in Belgium has decreased over the last couple of years. “About a decade ago, most of the treasury centers in Belgium were major operational centers, today however, we mainly see smaller competence centers”, Karen Van den Driessche explains.
This evolution has been influenced in part, by the decision of the Belgian government to dispense with the statute of treasury coordination centers. This has not necessarily been a bad thing, on the contrary. “The previous treasuries were more focused on the operational level, mainly because of the minimum limit in terms of personnel numbers. Today we see less centers but more quality and more strategic influence towards the head office overseas”, Michel Verholen explains.
Evolution of treasuries
From the late 1990s to 2008, just before the financial crisis, there have been a lot of discussions on the location of treasury centers, often inspired by changes in tax legislation. When the crisis hit, companies were obliged find their place within the new and fast changing economic circumstances and many companies turned to their treasury teams to help address the many new challenges.
The fiscal regime of a country has always played an important role in the decision where to locate a treasury center, but the new economic world demanded more transparency and centralization of all information, which is exactly what treasury had been working on in the past. As a result, treasury teams have been able to position themselves more strategically. Furthermore, the technological evolution and automation allowed treasury teams to work with smaller and more efficient teams. “The model whereby regional treasuries are strictly operational is outdated. In order to emphasize the crucial role that treasury offers, it has become easier to get projects approved that create more transparency, such as efforts to centralize more activities within the corporate teams.”
Why Belgium is the perfect hub for treasury"Belgium has much more to offer than just an attractive fiscal climate."
The changing dynamics and demands have had a positive impact on Belgium’s role in the treasury business. “Belgium has much more to offer than just an attractive fiscal climate. Belgian treasurers are highly qualified and have a very strong skill set. Furthermore, Belgian employees understand the international complexities of other regions.
Taken together these factors make Belgium the perfect hub for international treasury… it’s why a lot of treasury centers in Belgium are responsible for the Asian and African market. We’ve even evolved to having treasury headquarters here instead of in the country of origin”, Karen explains.
Michel Verholen confirms this evolution: “A lot of Belgium’s neighboring countries have a similar skillset, but as soon as things get a little more complicated, Belgian employees stand out. This has partly to do with our own unique position: on the one hand, we’re connected to the Anglo-American region and on the other hand, we understand the culture and way of thinking in southern European countries. We’re the perfect combination of both worlds.”
If an international corporation is just looking at the fiscal situation, then Belgium may not be the best student in the class. “The problem is that we have a pretty high tax rate, but at the same time provide a lot of exceptions for certain groups. We need to change that. We need to get rid of the different rules and exceptions, and ensure that Belgium has a clear, stable and transparent fiscal climate with an attractive tax rate”, says Michel.
Fortunately the taxation regime is no longer the only factor that’s important to international corporations when looking for a location to open a treasury center. “Belgium is a great place to live, with excellent facilities, health care, and education. On top of that, Belgian employees work hard and are very good at what they do. But we need to promote our country better than we do now. It is not surprising to find a lot of Belgian treasurers engaged to work in neighboring countries, exactly because of their skill set. If we could improve the perception of our country and provide a more attractive tax rate, then there would be even more good reasons to invest in a treasury center in Belgium.”