V. MARKETING U.S. PRODUCTS AND SERVICES: Entering the Market: Several thousand U.S. companies are selling on the Belgian market through distributors and agents. The new-to-market U.S. company will find a large number of well-established distributors in virtually every industry sector in Belgium. On many occasions, their territory is larger than just Belgium; often it is the Benelux and one or more neighboring European countries. Belgian agents and distributors are often perceived as being neutral sellers by European purchasers. This places them at a distinct advantage vis-a-vis their German or French counterparts. U.S. companies will also find that Belgium is an excellent place in which to locate distribution facilities. It has an outstanding network of ports, airports, rail, highways, and canals that can provide cost effective transportation to 300 million consumers in less than 48 hours. Joint venture and franchising agreements are often also a good way of entering the market. Watching for Pittfalls: Belgium is a faithful adherent to EU laws and directives, and Belgian business stands to benefit significantly from a single European market in the 1990s. The openness of the Belgian market should not, however, make American companies think that doing business in Belgium is like doing business next door in the United States. It is not. U.S. companies need to be aware of cultural and linguistic differences. There are also regional economic differences, with some parts of the country wealthier than other parts. In addition, Belgian distributors tend to be small and specialized. They also do not have ready access to inexpensive capital, and they are somewhat conservative when it comes to risk taking. Belgium has also established legal protection for distributors against sudden or unjustifiable termination of the distribution agreement. It includes measures assuring the right to receive reasonable notice of termination, and compensation for loss of income. In addition, the EU has passed similar legislation protecting agents. American companies need legal advice in drawing up a representation agreement in Belgium and throughout the EU. Lastly, the Belgian importer is looking for the best quality at the best price. He highly regards American products and technology, but Belgium is a highly competitive market. There are many competitors in the marketplace, and a U.S. supplier will have to be aggressive and have a sharp pencil to compete successfully. Getting Help: There are numerous individuals, professional organizations and service companies, financial organizations and consultants in all disciplines, prepared to advise and assist parties considering doing business in Belgium. The American Chamber of Commerce in Belgium is a particularly active one, with 1,000 paid-up members and several strong and very effective action committees. Its free services include an "Investment Referral Service" to help new American companies locate operations in Belgium and a new "Agent, Distributor, Licensee Service" designed to assist American exporters with questions related to trading with Belgium. Using a Regional Approach: The Benelux countries, including Luxembourg, already import $23 billion a year from the United States - more than Germany, France, or any other market in Europe except for the United Kingdom. The Benelux countries provide the United States with its first and fourth largest trade surplus in the world. Together, the Benelux countries have over 2,100 resident American companies, many of which are excellent intermediary markets for U.S. goods and services. Benelux multinationals are well known throughout the world, with per capita exports in the benelux near the top in the world. Finally, the Benelux countries boast outstanding locations for distribution of american products in europe and offer considerable incentives for locating European-wide distribution centers. In order to capitalize on the larger regional Benelux market, the Foreign Commercial Service offices in Brussels and The Hague are offering a number of joint services as part of a Euroaccess package. The joint services include the Benelux gold key, rep find, single company promotion, foreign buyer program, and customized market research package, as well as a joint newsletter which reaches over 8,000 Benelux importers of American products. The Euroaccess package also offers double trade events, in such sectors as the environment, telecommunication, travel, transportation, industrial cleaning, medical, and hotel and restaurant lines, as well as joint seminars on distribution into Europe from the Benelux. A business traveler can save money by taking the Euroaccess package, combining a visit to these exciting markets. In short, the Euroaccess package of services is designed to make certain that the American exporter is successful in marketing to Europe on the first try. Franchising: Although Belgium is a relatively small country of ten million inhabitants, it is an excellent test market for launching new products in Europe. Belgian characteristics are very close to European averages regarding private and public expenditure, GDP per capita, age distribution, and activity of its population. Consequently, American franchisors are exploring the market in ever greater depth. For example, the Belgian franchising market for fast food is growing at an annual real growth rate of twelve percent. There are no particular restrictions on opening franchise operations in Belgium. The European Union's Directive 4087/88 of November 30, 1988, provides the legal framework for the franchising business in the EU. Additionally, the European Franchise Federation has developed a European code of ethics for its members. It outlines a series of provisions of fair behavior, but does not have the effect of law. Its provisions include arbitration in case of disputes. In March 1992, the Belgian Franchising Federation was established. The Federation is open to both domestic and foreign franchisors operating in the country. It can provide prospective franchisors with considerable information on the franchise market in Belgium. Distribution and Coordination Centers: Belgium has developed some very attractive legislation permitting American companies to set up either distribution or coordination centers in Belgium. Distribution centers can engage in the purchase of raw materials for members of the company group, the storage, management, and packaging of raw materials, the sale to members of the group of these materials along with their transport and delivery, and certain operations related to the handling of goods purchased for resale or finished goods. Belgium is now developing additional regulations which will permit even more activities to be carried out in distribution centers. A coordination center, by contrast, is designed to permit a multinational group to perform certain service and financial activities on behalf of its member companies. In both distribution and coordination centers, multinationals can derive significant tax and other benefits from operating in Belgium. For more information on coordination centers, a U.S. company should contact the American Embassy in Brussels or contact the following: Ministry of Economic Affairs Service for Foreign Investors Square de Meeus 23 1040 Brussels Contact: Mr. J. De Buck Tel: 32/2/506.54.11 Fax: 32/2/514.03.89 Belgian Ministry of Economic Affairs Coordination of International Investment Policy Service Square de Meeus 23 1040 Brussels Contact: Mrs. Francine De Punt Tel: 32/2/506.52.66 Fax: 32/2/513.74.75 Forum 187 Federation of Coordination Centers rue Brederode 13/11 1000 Brussels Contact: Mr. Jean Yves Dopchie Tel: 32/2/513.39.92 Fax: 32/2/513.64.53 For more information on distribution centers, a U.S. company should contact the American Embassy in Brussels or contact the following: Ministry of Economic Affairs Service for Foreign Investors Square de Meeus 23 1040 Brussels Contact: Mr. J. De Buck Tel: 32/2/506.54.11 Fax: 32/2/514.03.89 Ministry of Finance Administration of Direct Taxes Financietoren Rijksadministratief Centrum Bus 32 Kruidtuinlaan 50 1010 Brussels Contact: Mr. Patrick Jacobs Tel: 32/2/210.23.42 Fax: 32/2/210.41.18 Setting up an Office: The American Chamber, in conjunction with the U.S. Embassy, operates an outstanding service called the Investment Referral Service. Drawing upon experts from the financial, accounting, real estate, legal, and business world, the IRS can be used by American companies considering opening an operation in Belgium. Upon request, the IRS members will answer questions regarding a variety of issues either in person or via letter/fax. U.S. companies considering an investment in Belgium, including opening a sales office or distribution center, should contact the American Chamber, Sheila Chabeau, (Tel: 32/3/513-6770 or Fax: 32/2/513-7928) to request use of the IRS. In addition, the Chamber publishes a booklet, entitled "Doing Business in Belgium", which provides guidance on a host of issues related to setting up an operation in Belgium. Protecting Your Product from IPR Infringement: The rights granted under U.S. patent, trademark or copyright law can be enforced in the United States, its territories and possessions only. The EU, for its part, has taken a number of initiatives to provide intellectual property protection, but not all measures haven been implemented. In cases of non-implementation, national laws still prevail. Patents: Belgium is also a member of the World Intellectual Property Organization (WIPO) and the European Patent Convention (EPC). A single European patent, valid throughout the EU, does not yet exist, since the community patent convention has only been ratified by Germany and Greece. In the meantime, the patent applicant can choose between a national and a multiple-country patent. In the latter case, a single application to the European Patent Office in Munich (European Patent Office, Erhardstrasse 27, D-80331 Muenchen, Germany, Tel: 49-89-23990, Fax: 49-89-23992850) is required for obtaining patents valid in a number of countries within the EU, and Austria, Liechtenstein, Sweden, Monaco, and Switzerland. A patent thus granted will not be valid in Belgium unless a copy of the grant in one of Belgium's three national languages is filed with the Belgian Office of Industrial Property described below. To obtain a national patent in Belgium, the inventor or his/her assignee must file a request with the Office of Industrial Property in the Ministry of Economic Affairs. After a search of the European Patent Office in Munich, if requested by the inventor, the Belgian government will issue the patent without guarantee of patentability. National patents are valid for twenty years if a search has occurred. If not, the validity is reduced to six years. Once granted, the patent is registered with the Register of Patents, again located in the Ministry of Economic Affairs. Trademarks: While now in force, the EU Trademark Office still needs to be established in Alicante, Spain and the first EU trademark registrations are not expected until mid-1995. In the meantime, trademark registration is handled on a national basis. Trademarks in Belgium are regulated by the Uniform Benelux Law of 1962, which offers protection in Belgium, the Netherlands and Luxembourg. An application for trademark can be filed either with the Belgian National Office in the Ministry of Economic Affairs or with the Benelux Trade Mark Bureau located in The Netherlands (Bankastraat 51, The Hague). A search is required to ascertain the existence of a similar or identical trademark for the same category of product. If granted, protection lasts for ten years from the date of application and can be renewed for further periods of ten years each. Trademarks must be used within three years of registration or within any uninterrupted period of five years. Copyrights: Belgium is a member of the Berne Convention and the Universal Copyright Convention of Geneva. As a member of the UCC, to which the U.S. and 50 other countries belong, Belgium accords authors automatic copyright protection throughout all UCC countries when registered with this organization. Protection exists for the life of the author, plus 50 years after death. In addition, Belgium has passed a revised copyright law which brings Belgian practice into conformity with existing EU directives. However, EU directives permit some variation in each member state and U.S. firms wishing to protect their copyrights in Belgium should consult local legal counsel. This is particularly true regarding reciprocity provisions in the new law. Priority areas for harmonization of national law throughout the European Union have been identified in the European Commission's green paper and follow-up paper. Steps have been taken in the field of; - Computer Programs (adopted): Software protected as literary work. - Satellite Transmissions (adopted and in force): Authorizations from the copyright holder only in the member state from which the transmission occurs. - Cable Broadcasts (adopted and in force): Rights for the simultaneous, unaltered retransmission by cable of programs would be negotiated exclusively within collective management societies. - Rental/Lending and related rights (adopted): Exclusive right permitting authorities, performers and producers, film and record producers to authorize or forbid the rental or lending of their works. Derogations possible. The directive harmonizes member state legislation on certain neighboring rights concerning fixation reproduction, distribution, broadcasting, and communications to the public. - Databases (proposal): Harmonization of EU copyright rules affecting databases, including an "unfair extraction" clause. - Copyright period (in force since July 1, 1995): Copyright protection 70 years after the death of the author; for neighboring rights: 50 years. - Design and Model protection (proposal): 25 year period of protection for industrial models and designs. As in copyright, the need to consult local legal counsel applies equally to patents and trademarks. Advertising and Trade Promotion: The U.S. Embassy publishes monthly a professional commercial magazine, entitled "Business Links", which is sent to over 4,000 Belgian importers of U.S. products and services, along with 1,000 American companies operating in Belgium. U.S. companies are free to advertize in the magazine. Rates are available from the Commercial Section of the Embassy. The American Chamber of Commerce also publishes a monthly magazine, which goes to its 1,000 members. Consisting of American companies operating in Belgium and Belgian firms with U.S. business interests, the Chamber magazine reaches a particular clientele of interest to some American exporters. Rates are available from the American Chamber (Tel: 32/2/513- 6770 Fax: 32/2/513-7928) In addition, Belgium has a number of sophisticated newspapers and magazine published in Dutch or French. They are listed below, along with the one English language magazine published in Belgium, The Bulletin. English readers in Belgium also can choose from the International Paris Herald Tribune and the Wall Street Journal's European Edition. De Standaard (Dutch daily) Gossetlaan 28 1702 Groot-Bijgaarden Tel: 32/2/467-2211 Fax: 32/2/466-3093 Knack (Dutch weekly) Tervurenlaan 153 1150 Brussels Tel: 32/2/736-6040 Fax: 32/2/735-6857 De Financieel Ekonomische Tijd (Dutch daily) BP Building St. Lazarusplein 2, 6th floor 1210 Brussels Tel: 32/2/217-2205 Fax: 32/2/217-0976 Trends Magazine (Dutch weekly) Researchpark De Haak 1731 Zellik Tel: 32/2/467-5700 Fax: 32/2/467-5758 Le Soir (French daily) Place de Louvain 21 1000 Brussels Tel: 32/2/225-5432 Fax: 32/2/225-5914 La Libre Belgique (French daily) Bd. Emile Jacqmain 127 1000 Brussels Tel: 32/2/211-2777 Fax: 32/2/211-2832 L'Echo (French daily) Av. de Birmingham 131 1070 Brussels Tel: 32/2/526-5511 Fax: 32/2/526-5526 Tendances (French weekly) Research Park Zellik De Haak 2 1731 Zellik Tel: 32/2/467-5900 Fax: 32/2/467-5759 The Bulletin (English Weekly) Ackroyd Publications Avenue Moliere 329 1060 Brussels Tel: 32/2/343-9909 Fax: 32/2/343-9822