IS427:AY1314T1 Europe (G1) - Cities: Ghent (Pre-Trip)

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Ghent, Belgium	Lille, France	Munich, Germany

General

Belgium is a constitutional monarchy in western Europe, bordered by Netherlands, Germany, Luxembourg and France. It is one of the most densely populated countries in the world, with 10.5 million inhabitants.

Belgium is divided into three main regions, Flanders in the north (where Flemish is spoken), Wallonia in the South (where French is spoken) and a German-speaking region in the south.

Belgium

Ghent

Ghent is a city and a municipality in the Flemish region of Belgium. It is the capital and largest city of the East Flanders province. Started as a settlement at the confluence of the Rivers Scheldt and Lys Dutch is the official language Christianity, in particular Catholicism, is the biggest religion with about 57% of the population adhering to the Catholic Church

The Metropolitan area covers an area of 1205 km2 Total population of 594,582 as of 1st January 2008 Ranked as 2nd most populous in Belgium. Today, Ghent is a busy city with a port and a university.

Political History

Century	Events
7th	St. Amandeus founded 2 abbeys at River Lys and Scheldt A city named Ganda (as Ghent was once known, meaning 'confluence' in Celtic) arose at the confluence of the two rivers around the two abbeys
11th	As part of the French Empire, Ghent flourished as one of the most powerful cities in Europe English wool and French grain were imported via the harbours at Lys and Scheldt, allowing Ghent to become the pillar of a thriving textile and grain business
12th - 13th	English wool and French grain were imported via the harbours at Lys and Scheldt. They became the pillars of what turned out to be a very thriving textile and grain business in medieval Ghent. Throughout the Middle Ages Ghent had a population of about 65,000 making it larger than London, Cologne or Antwerp. Moreover Ghent was, after Paris, the biggest and wealthiest city north of the Alps.
14th	During the Hundred Years’ War (a series of conflicts from 1337-1453) between England and France, Edward III forbade all exports of English wool to Flanders and to Ghent as it was considered part of the French crown. While the count of Flanders chose to side with the French king, Gent depended heavily on the import of English wool and could not afford to alienate England. In 1338, Jacob van Artevelde, a cloth merchant who had amassed a fortune in the weaving industry, led Ghent to set up an alliance with Bruges and Ypres and declare their neutrality. This allowed the vital wool trade with England to be safeguarded. The Count of Flanders tried to overthrow van Artevelde’s power by force of arms but was defeated and compelled at Bruges to sign a treaty (June 21, 1338) sanctioning the federation of Ghent, Bruges, and Ypres. This was followed during the year 1339–40 by more treaties that gradually brought many of the towns and provinces of the Netherlands into the federation. The policy of neutrality, however, proved impracticable, and the Flemish towns, under Van Artevelde, openly took the side of the English. On January 26, 1340, the federation proclaimed Edward III as the rightful sovereign of France. Under Van Arteveld’s administration, trade flourished and Ghent rose rapidly in wealth and importance.
15th	Ghent was passed to the Hapsburg empire as part of a marriage agreement In the events of the Revolt of Ghent (1449 – 53), Ghent rebelled and was defeated by the Duke of Burgundy, resulting in the diminishing of the city council’s power
16th	Charles the V On February 24th of the year 1500, Charles the V was born at Prinsenhof and later baptized in the St. Baaf's Cathedral. As part of the Spanish empire, Ghent was subject to his rule as the Holy Roman Emperor and Spanish King, though his sister, Mary, governed the region as his regent. In 1536, Charles V went to war with the French King Francois I for control of northern Italy (Italian War of 1536-1538). In 1937, Charles asked Mary to raise a large amount of money and conscripts from the Dutch provinces, including Ghent. The Revolt of Ghent (1539-40) was an uprising by the citizens of Ghent in 1539 against Charles V. The city refused to pay the high taxes being imposed, feeling that these taxes were only being used to fight wars abroad. In 1940, Charles V returned to Ghent with an army of 10,000 soldiers to quell the rebellion and was met with no resistance. On February 24th, his 40th birthday, Charles ordered the most influential and rebellious citizens to walk in procession to the Prinsenhof, bare foot, dressed only in a simple white shirt, with a black and white hangman noose around their neck. They were then forced to publicly ask him for forgiveness. These events gave the people of Ghent the nickname of Stroppendragers (noose wearers). Charles imposed a heavy fine on the city and decreed a new constitution, the Caroline concession that stripped Ghent of all its medieval legal and political freedoms and weapons. He also commissioned the demolition of most of the old abbey of Saint Bavo’s and the building of a new fortress in its place, in which numerous Spanish soldiers would be stationed to make sure that the citizens of Ghent wouldn’t be in a position to rebel anymore.
17th	This was a period of economic decline, Wars took its toll on Ghent and diminished its wealth, power and importance.
18th	As part of the Austrian Netherlands, Ghent’s economy improved after deeper and wider canals were dug to facilitate bigger ships coming into Ghent’s harbours. Textile industry began to flourish again
19th	During the War of the Austrian Succession, Ghent was captured and later returned to Austria by French forces After the Battle of Waterloo, Ghent became part of the United Kingdom of the Netherlands Belgium separated from the Netherlands and became an independent state after the 1830 Belgian Revolution

Current Political Situation

Belgium is one of the few post-industrialised countries where more than 50% of the dependent labour force belongs to a trade union The main responsibility for welfare payments and unemployment benefits is handled by trade/labour unions rather than government agencies This is a system first implemented in Ghent and is known as the Ghent system.

Socialist Elio di Rupo was appointed to lead a six-party coalition in December 2011, finally giving Belgium a government after nearly a record year-and-a-half (451 days) of no governance

Culture

• Pragmatic
• Non-hierarchical
• Rebellious Streak
• Creative

Business Culture

Greetings

Handshakes are the only acceptable form of public touching in Belgium. Greetings and goodbyes should be done with a handshake. Men usually wait for women to initiate the contact.

A handshake should not be prolonged or too vigorous. Your grip should be light and last not more than five seconds. Maintain eye contact throughout the handshake.

Punctuality

Belgians are generally good timekeepers, the Flemish Belgians more so than the Walloons. Punctuality in business is expected.

Gift Giving

Gift giving is not a normal aspect of business relations in Belgium. If any gift is to be given, it should be reasonably modest and logo-neutral. A gift bearing company logos or business cards is consider gauche.

When offered a gift, open it right away and show your appreciation.

If you are invited into a home, take a gift for the hostess: flower, chocolates (Belgium's trademark product), but not wine. Like most European countries, sending some species of flowers will impart the wrong message; refrain from sending chrysanthemums, carnations or any yellow fellows. Flowers should be sent in advance. A handwritten note of appreciation will also go a long way in showing your sincerity.

Business Dress Code

It is normal to wear at least a jacket in most Belgian organizations, though the dress code is becoming less strict over the generations. When in doubt about how dress-conscious the organization is, it is advisable to be well-dressed rather than under-dressed. It is also acceptable to ask your host about the dress code.

Business Meeting

It is good practice to make an appointment well in advance. If formal presentations are planned, logistics such as venue and required equipment should also be arranged beforehand. It is also preferable if you are able to supply background details in advance, though most Belgians prefer to conduct the meeting without a concrete agenda for increased flexibility.

The most suitable time for a business meeting is probably about 10 a.m. If the proceedings are positive, it may lead to lunch, when the agenda can range from a continuation of the business discussion to purely social affairs. This will help build a sense of mutual trust, which Belgians place great importance on.

Belgian executives generally prefer face-to-face meetings, but are adapting to new technologies.

Bribery and corruption

The practice of grease payments has been eradicated since the revision of the anti-bribery legislation in 1999. Belgium claimed 16th position in the world on the Transparency's International’s Corruption Perceptions Index for 2012, with a score of 75. Bribery is now a criminal offence.

Cultural No-nos

• Don't make jokes about the Flemings to the Walloons and vice versa
• Don't comment on the linguistic diversity in Belgium
• Don't drink and drive (Penalty: 1 year of jail)
• Don't blow your nose in public; it's very offensive
• Be mindful of personal space of individuals
• Don't put hands under the table during a meal; it's very rude

Entrepreneurship Ecosystem

Ghent is quickly becoming one of the emerging places in Belgium to start up. In the recent study, Creative Cities Index 2012, Ghent scored 56.25% in “Entrepreneurship, Exploration & Innovation”. Against the study’s scoring matrix, this is a tad short of “Very good”.
The study noted that Ghent has a strong cultural axis that makes it more of an arts than design city. A design culture encourages the link between artistic creativity and applied innovation, which Ghent lacks. This is Ghent’s major weakness and a missing link in exploiting economic value from its talent. On the flip side, the city administration is increasingly enterprising. They have been continually on the lookout for opportunities and connections.
In brief, the rise of entrepreneurship in Ghent is a combination of 4 factors: Human capital, networks, institutional support and finance capital.

Human Capital

In Ghent, there is an army of well-educated young minds ready to challenge the European industry. With a total 5 universities located in Ghent, the number of students are well over 70,000. Furthermore, Ghent University and Vlerick Business School are both highly ranked globally.

Support

There are a number of incubators present in Ghent: Campus Ardoyen, Woowoos and iMinds. In addition, there are also a slew of co-working spaces mainly catered for startups, including: Loft169, iCubes, iHub and startup garage.
The government has also been very supportive, making it part of their municipal mission to become a creative city by the year 2020.

Finance Capital

Finance capital is present in abundance in Belgium, with over 300 grants available. Funding for entrepreneurs are also available at the universities. In fact, there are comments that in Belgium, there is a grant mentality present, whereby startups are more eager to obtain grants than investments.
The banking system, however, has often been criticised for being insufficiently attuned to the needs of the many startups and small businesses.

Network

There are many communities and events in and around Ghent that seeks to connect entrepreneurs together, and encourage a more vibrant and collaborative environment. Within Ghent itself, we have Ghent BC (Big in Creativity), which is a platform intended to stimulate the economy with new knowledge. It seeks to enable networking between different actors in the field of innovation and knowledge-based industries in the region.
The many events that bring people together to form new ideas. These include Student Ghentrepreneur, Demeestegoesting and also Bridee.

Investment Scene

Business Environment

Belgium is a constitutional monarchy in which ultimate power rests with a bicameral parliament. It has one of the most open economies in the world as a result of its economic integration and interdependence with its three main neighboring countries – France, Germany and the Netherlands.

Belgium is an EU member state (with Brussels, the capital, serving as the seat of the EU) and also is a part of the Benelux, a tariff union between Belgium, Luxembourg and the Netherlands. As an EU member state, Belgium is required to comply with all EU directives and regulations and it follows EU regulations on trade treaties, import regulations, customs duties, agricultural agreements, import quotas, rules of origin and other trade regulations. It also is a member of the OECD.

Each of the three main regions in Belgium have their own distinct cultural and linguistic “communities” (Flemish, French and German) and their own parliaments and executives. As the capital and largest city of the East Flanders region, Ghent is a busy city with many hospitals, schools, Flanders’ biggest university and the country’s third largest port.

Setting up a Business

Foreign subsidiaries generally take the form of a SA/NV (société anonyme/naamloze vennootschap – limited liability company), while the SPRL/BVBA (société à responsabilité limitée/besloten vennootschap met beperkte aansprakelijkheid – private limited liability company) is the preferred form of organization for small (particularly family-owned) firms and may be used for small management companies.

The main difference between an SA/NV and an SPRL/BVBA is that the latter is essentially based on “a relationship of trust” among associates. For this reason, the shares of a private limited liability company are registered shares and their transferability is restricted (e.g. the other shareholders have pre-emptive rights to purchase any shares). Share capital is also higher for an SA/NV.

As was confirmed in the most recent 'Global Information Technology Report' by the World Economic Forum, as well as the 'Doing Business 2009' report by World Bank, it is possible to set up a business in just 4 days in Belgium. Belgium is one of the only countries in the world where it can be done so quickly. Moreover there are, on average, only 3 procedures required to start a business.

Intellectual Property Rights

Patents, trademarks, copyrights and industrial designs and models are legally recognized in Belgium. The recognized holder of intellectual property has exclusive rights to exploit the property, to assign such rights via a license and to bring actions for infringement. For abuse of a patent or trademark, the holder may be awarded damages and obtain an injunction to prevent continued abuse. A licensee alone cannot get an injunction, but must work jointly with the patent or trademark holder to claim damages.

Taxation Incentives for Innovations

Belgium offers a patent income deduction that amounts to 80% of the income, resulting in a maximum effective tax rate of 6.8% on qualifying patent income. The incentive is intended to encourage R&D activities in relation to the development of patents or improvement of patented products or processes. For Belgian operations, the patent income deduction is designed to stimulate Belgian companies to take ownership of the patents or to improve a patent in an R&D center (Belgian or foreign).

Other R&D incentives include:

• An R&D tax credit that allows (provided certain conditions are satisfied) overall R&D costs to be reduced by 5% to 8%, either by way of a tax deduction or via a refundable tax credit.
• A payroll withholding tax exemption of up to 75%, which is granted for qualifying researchers and reimbursed to the employer (which allows on average a decrease of between 15 and 20% of the salary costs).

Labor Environment

Belgian labor law encompasses laws on the terms of employment and rules on health and safety. Many of these derive from EU legislation and many of the employment conditions have their roots in collective bargaining agreements that are binding by royal decree.

Average salaries in Belgium are not that high compared with average salaries in other Western European countries. However, considerable social security contributions and professional withholding tax have to be paid on top of the net wage, so that the total cost of employing workers in Belgium is relatively high in comparison with other Western European countries.

References