Flanders Investment & Trade (FIT) will be presenting its Leeuw van de Export Award for the 20th time on 29 September. As well as recognising strong export results, FIT also wants to use these success stories to inspire other companies to cross borders themselves. This is something that BNP Paribas Fortis, as a sponsor of this event, fully supports.
What do exporters need to look for to conquer the international market? We asked Frank Haak, Head of Sales Global Trade Solutions, and a jury member for the 20th edition of the Leeuw van de Export Award.
What can would-be exporters expect at the beginning of their export adventure?
"Exporting is an important step forward in a company's evolution. But suddenly operators come into contact with a completely different and usually unknown environment. Import market regulations are often different, as are tax and legal regulations. When making international payments, there are exchange risks. And then there are the specific documents and products required for foreign trade. There are lots of new things to consider."
How can companies prepare for this?
"By learning in advance as much as they can about the rules that apply to their new foreign market. Companies can turn to domestic institutions, such as FIT's foreign branches or their banker, to help them with this. They will help new exporters find their way around the very complex international world. I also recommend hiring a local agent or representative. This can help to resolve any bottlenecks that can't be resolved easily from home. At BNP Paribas Fortis, we have our Trade Development department that can help with this. Rob Van Veen offers companies guidance as they take their first steps in a new international market. This kind of external support may be expensive, but it's an investment that will save money in the long term."
How do companies that would like to start exporting learn about a new market? What advice can you give them?
"You learn about new markets simply by visiting as many foreign counterparties as possible. Don't bite off more than you can chew – take it one step at a time. I always say to new exporters: exports are great, but getting paid is even better. The risk of non-payment is still underestimated too often, even by companies that already have extensive international experience. We always recommend customers map out the worst-case scenarios in advance and incorporate the necessary mitigations. Prevention is better than cure!"
How can exporters better protect themselves against unforeseen circumstances?
"The COVID-19 pandemic showed how important diversification is, both in terms of supply or production of goods and in the choice of export countries. Economically, it may seem more advantageous to manufacture or import from a country far away with cheap labour, but always make sure you've got a back-up plan."
Which development would represent a significant added value for international trade?
"We need digitally-secured platforms for international trade transactions that all interested parties can use to securely view and exchange documents in digital format. This not only shortens the lead time of international transactions, but would also be a huge step forwards in terms of sustainability. Trade finance is difficult and cumbersome: it involves exchanging tonnes of data, a lot of which is still on paper, unfortunately. But I'm confident that we're gradually moving in the right direction. Many large international banks, including the BNP Paribas Group, are currently working on this."
Find out who will be crowned winners of Leeuw van de Export Award 2021 during the livestream on 29 September at 6pm. Register in advance at www.leeuwvandeexport.be or visit the website on the day itself.
Are you ready for your first international adventure or do you want to expand your international activities? We offer you the peace of mind you need, with a wide range of solutions to optimise, secure and finance your import and export activities.
Source: Wereldwijs 2021
Who is the key partner in your international growth?
Your bank! In particular, the network of experts at BNP Paribas Fortis' Trade Development department. The missing link between your foreign ambitions and your growth project's success.
Conquering foreign markets raises new expectations within companies. Needs that go way beyond a bank's 'traditional' services... We at BNP Paribas Fortis have understood that well, and that's precisely why we established the Trade Development department. This department advises clients and provides them with a full range of support in their international ambitions. "A bank can provide practical assistance to companies' expansion projects abroad: it can open accounts, provide guarantees, underwrite cash flows, and more", says Rob van Veen, Head of Trade Development at BNP Paribas Fortis. "But that's not all clients need: they also expect their bank to think about strategy and to help them approach the market in an intelligent and efficient manner. And that's exactly what we do." What does that mean? The service provides unique and highly essential support – especially now against the backdrop of the COVID-19 crisis – for expansion beyond our national borders, reassuring business owners and connecting them to a global network of local experts or providing long-term follow-up.
KNOWN TERRAIN... EVEN ABROAD
A good example of this successful partnership between a company with international ambitions and the bank is the Besins Healthcare group, founded in 1885 by Abel Besins, and which has been expanding globally since the 1980s. Great ambitions, which the company fully embraces with BNP Paribas Fortis' sustainable support. "Once we've got new plans abroad, we first discuss them with our contact person at BNP Paribas Fortis", says Leslie Grunfeld, CEO of Besins Healthcare, which is currently active in over a hundred different markets, and has local branches in several of them. "Our treasurer will check whether the bank is present in the country in question or whether it has partnership links with local institutions." This approach means that the group never goes into a blind adventure, as it has a similar range of services throughout the world. "That's great! Especially when you consider that the local problems you have to solve can vary greatly from one country to another."
ACCESS TO A KNOWN AND RELIABLE NETWORK
One of the Trade Development team's biggest advantages is that it can provide companies with a real network of local specialists. Professionals for whom the target market holds no secrets. They know the reality of the country in question like the back of their hand and provide the company with support through all the local steps: from exploring business opportunities to bureaucratic formalities.
"Even in countries where BNP Paribas Fortis doesn't have branches, we were able to benefit from the bank's network, which made the establishment of local branches particularly smooth. We didn't have to start from scratch every time we went abroad: we had immediate access to a structured network and reliable banking partners. And that means huge time savings", Besins Healthcare's CEO emphasises.
THE HUMAN FACTOR
Personal contacts with preferred partners are of great importance in an international growth project. Not only to have reliable and proactive contacts, but also to gain access to useful information and to unlock new local opportunities. These 'local' contacts are usually long-term partners of the bank... a guarantee of reliability for the company that should not be underestimated. They are specialists with various skills and profiles – legal, business or administrative – who assist the company in question from start to finish. This includes assisting with setting up local establishments, starting up a new activity, recruiting staff (management, local contracts, etc.), setting up a new legal structure, seeking suitable suppliers and other partners (e.g. banks), responding to clients' needs (cash credit, leasing, fleet management, currency hedging, etc.) and offering them tailor-made solutions. And what happens when the company is 'launched'? Trade Development then remains on standby to continue the banking relationship and to closely monitor the client's evolution. For the long term!
A bank like BNP Paribas Fortis – through its Trade Development teams – is therefore the key partner for companies' international growth. And that goes way beyond simply offering financial services. It also provides:
- exploration of new markets and partners for the company. In this capacity, it can collaborate in determining the strategy at the source and opening the range of possible relationships on the ground as widely as possible;
- risk mitigation: the bank analyses and assists with the preparation of a realistic profile of the future partner (finances, real interest, reliability, reputation, etc.) and with reducing the margin of error;
- creation of ready-to-use solutions. In this regard, the bank is always available to listen to the client, anticipate their expectations and offer solutions adapted to their specific situation;
- acceleration of the foreign process to establish themselves in a market or gain a foothold there, thanks to local contacts with useful local knowledge and experience;
- facilitation of the whole process, making its extensive network available to rapidly put the company in question in contact with local partners, but also to manage or advance all kinds of situations;
- long-term support – Trade Development's experts closely monitor the company's international journey, on-site or remotely, and oversee the project's success.
Not words, but actions: how can you realise your internationl project?
Gaining a foothold in a foreign country is no easy task, and some good advice alone will not suffice. Trade Development at BNP Paribas Fortis is the perfect partner to turn theory into practice!
Many companies want to try their luck outside our borders and gain a foothold in new markets. This is necessary not only to be able to continue to grow, but also to remain competitive. But if you don't know where to start, it's hard to put your money where your mouth is. How do you find the right market? How do you find prospects? How do you prepare the whole operation in all its aspects? What risks do you need to cover? And which partner can you trust? All important questions that can make or break your project. And this is how international ambitions are sometimes left on ice....
"We want to help companies achieve their international ambitions", says Rob van Veen, Head of Trade Development at BNP Paribas Fortis.
"We look at the local market into which the company wants to launch and make sure the underlying potential is sufficient." And so, the first step towards success is taken.
WHEN GOOD ADVICE IS NOT ENOUGH...
There's a deep gap between theory and practice that managers do not always dare to cross. It's essential to collect a lot of data and information, but this is certainly not enough. Talk must then be followed by action. Your growth project's first stone must be laid... preferably with the greatest possible chance of success and as few risks as possible. In such an adventure, (good) guidance is not a superfluous luxury. Even more reason to call on the support of Trade Development: a partner who can assist you with a wide range of solutions and help you establish a long-term strategic vision. In Belgium and beyond.
"In their project's first phase, companies often find a lot of information and support from the Belgian export promotion agencies", says Rob van Veen. "But they don't get all the practical answers they need to roll out their activities in a given country."
Given that growth prospects in Belgium are rather limited, companies must therefore look for international growth. But where? This is where the Trade Development team comes in. Your choice of target market is certainly crucial. A vague, poorly thought-out decision can have dramatic consequences: examples of failure abound – partly because companies don't understand the local 'culture'. Companies sometimes gravitate towards exotic markets because others have gone before them. But every international project is unique: does the market fit into your overall strategy? Are you aware of all the challenges that lie ahead (regulatory, commercial, etc.)?
"Let's take the example of a company that wants to set up in Brazil. Our first question is then: what activities have you already been carrying on in Europe? Might there be new, undiscovered opportunities there? For example, it's much easier for a company to set up in Poland than in Brazil, where taxes on imports are extremely high" , continues Rob van Veen.
HIGHLY NECESSARY 'LOCAL' CONTACT PERSONS
Your project has taken shape and you've determined your target market. The time has then come for Trade Development to roll out one of its greatest assets: access to a global network of competent and reliable partners.
"We introduce the client to local specialists who can support their project abroad from start to finish. One deals with the roll-out of activities, another specialises in legal and tax issues, and a third takes care of the administrative side of things. We prefer to work with small, local agencies, most of whom are long-term BNPPF network partners", says Rob van Veen.
These contact persons have a perfect knowledge of the national rules and customs and know how to adhere to that specific framework. The company therefore has the great advantage that it can benefit from such a skilled team: a win-win situation. "In addition, our permanent contact persons are evaluated by the client after each project. This way, we can guarantee the quality of our services!"
BUILDING RELATIONSHIPS: Save TIME AND gain EFFICIENCY
Are you looking for an effective distributor or a reliable representative? An ideal on-site supplier? Do you want to determine these contacts' actual potential or get to know possible new partners? Not easy for a company…
"Most of them are looking for a white knight. Our trade developers draw up realistic selection criteria in consultation with the client. They carry out a financial analysis of the commercial partners and check their technical baggage and their reputation", explains Rob van Veen.
First, a list of four or five serious and interested candidates is drawn up, and then the contact phase follows. "Our local contact introduces the candidates to the Belgian company to ensure that both parties are interested in a partnership. Once all these issues are clarified, the relationships can be rapidly explored in depth."
SUCCESS IN THE FIELD
Every target market has its problems and risks: from the language to cultural and commercial differences. Very specific problems that are often difficult to solve from Belgium, especially in the post-COVID-19 era. Hence the importance of being surrounded by specialists who know the country like the back of their hand. Need an example? "To be able to supply retailers in the UK, you often need to be able to invoice at a local level", explains Rob van Veen. "Our trade developer can then act and take care of the local invoicing and accounting on the company's behalf at a fixed and transparent rate for each transaction. This is a simple initial structure that does not require major investments but is very interesting professionally." The client can naturally then seek its own local partner. "That too is a task they can leave to our contact person, who has the necessary experience to do so." Need another example? Russia, where everything takes a huge amount of time... Trade Development's network of experts can also speed things up considerably here and solve problems more quickly.
Export plans? Make sure you talk to our experts first
To prepare your international adventure properly, ask yourself the right questions and talk to people who have done it all before: partners, customers, fellow exporters and experts.
BNP Paribas Fortis listens to the questions asked by international entrepreneurs and offers reliable advice. "A lot of exporting companies ask for our help when it's too late", Frank Haak, Head of Sales Global Trade Solutions, says.
Entrepreneurs with little export experience are often unaware of the bigger financial picture. So what do they need to take into account when they set up a budget for their export plans?
Frank Haak: "Budgeting and pricing are affected by a lot of crucial factors: working capital, currency exchange risks and currency interest, prefinancing, profit margins, insurance, import duties and other local taxes, competitor pricing and so on. We always advise customers or prospects to start from a worst-case scenario. Quite a few companies are insufficiently prepared for their first international adventure: they see an opportunity and they grab it, but quite often disappointment and a financial hangover are not far away.
Our experts have years of export experience and the BNP Paribas Group has teams around the world. This means that we can give both general and country-specific tips. Let's say a machine builder wants to design and manufacture a custom-made machine. We recommend including the machine's reuse value in the budget: can this machine still be sold if the foreign customer suddenly no longer wishes to purchase it or if export to that country becomes impossible due to a trade embargo or emergency situation?"
What type of companies can contact BNP Paribas Fortis for advice?
Frank Haak: "All types! Entrepreneurs are often hesitant to ask for advice. Sometimes they are afraid that it will cost them money. However, the right advice can save them a lot of money in the long run. For example, we recommend a letter of credit or documentary credit to anyone exporting goods to a foreign buyer for the first time. This product is combined with a confirmation by BNP Paribas Fortis to offer the exporter the certainty that it will receive payment when it presents the right documents and to assure the buyer that its goods or services will be delivered correctly."
The consequences of not seeking advice: what can an exporter do in case of non-payment without documentary credit?
Frank Haak: "If you are not receiving payment for your invoices, the counterparty's bank can be contacted in the hope that it advances the payment on the customer's behalf. However, we shouldn't be too optimistic in that respect: the chances of resolving the issue without financial losses are very slim. Once you have left your goods with customs, you usually lose all control over them. Hence the importance of good preparation: listen to and follow the advice of your bank and organisations such as Flanders Investment and Trade (FIT). It will protect you against a whole host of export risks."
BNP Paribas Fortis
- is the number one bank for imports (approx. 40% market share) and exports (approx. 25% market share) in Belgium (according to the statistics of the National Bank of Belgium): it offers advice/financing and can help you to discover new export markets through trade development;
- is proud that Belgium is one of the world's 15 largest export regions and is pleased to give exporters a leg up, for example by sponsoring the Flemish initiative ‘Leeuw van de Export’.
Source: Wereldwijs Magazine
Electric cars are gradually becoming the norm
As of 2026, a favourable tax regime will only apply to electric company cars. This is an important step towards more sustainable mobility – and an extra reason to go all out in greening your fleet.
The evolution towards a greening of company cars has now also been laid down by law. Thanks to a number of tax changes, electric company cars or e-cars will be the most interesting choice from now on. The perfect time to start electrifying your fleet already today.
The tax deductibility for newly ordered non-emission-free vehicles (diesel, petrol and hybrid cars) will gradually be phased out. Up to 2026, however, this will be 100% for emission-free vehicles (purely electric or hydrogen-powered cars). Afterwards, this deductibility will gradually decrease to 67.5% by 2031.
Electric driving isn’t just more tax-efficient
Electric cars are already 100% tax-deductible. And yet most fleets aren't really green yet. One reason is that the purchase price of an electric or hybrid car is considerably higher than that of a comparable car with a combustion engine. There’s been a noticeable evolution here due to the market mechanism, though, and prices are now less far apart.
But the purchase price isn’t the only factor to consider. In making this choice, it’s actually better to look at the TCO (Total Cost of Ownership). This includes all expected costs: consumption, maintenance, CO2 contribution and tax deductibility. And these four elements are all more favourable for electric cars. If you use the TCO rather than purchase price as a yardstick, you’ll see that a green fleet of e-cars will be the most advantageous choice for your company in the future.
Even though electric driving is the future and it’s clearly time for a new mobility, the tax scheme for cars powered by fossil fuel won’t change overnight.
- Until 30 June 2023
For company cars ordered before 1 July 2023, the current conditions regarding tax deductibility will continue to apply. For company cars that are leased or rented operationally and for which the beneficial ownership is not transferred, the closing date of the lease or rental contract is considered. The costs of a diesel, petrol or hybrid car remain 50 to 100% deductible, while the costs of electric cars remain 100% deductible.
- Between 1 July 2023 and 31 December 2025
For non-emission-free vehicles ordered as of 1 July 2023 until 31 December 2025, a transition period will apply, and the deductibility is gradually phased out. From a maximum of 75% in 2025, to 50% in 2026, to 25% in 2027, and ultimately 0% deductibility in 2028. As of 2025 the minimal deductibility of 50% is abolished. The CO2 contribution for these cars will also increase significantly each year. Emission-free cars will remain 100% deductible.
- As of 1 January 2026 onwards
Non-emission-free vehicles ordered as of 1 January 2026 will no longer be deductible. Only emission-free vehicles such as electric cars will then be 100% deductible. But this favourable scheme will also be gradually phased out over the next few years, to 95% for vehicles ordered in 2027, to 90% in 2028, to 82.5% in 2029, 75% in 2030 and eventually to 67.5% in 2031.
- Plug-in hybrids (PHEV)
For plug-in hybrids (PHEVs) ordered as of 1 January 2023, the tax deductibility of petrol and diesel costs will be limited to 50%. Electricity and other costs are not covered by this restriction. This measure is designed to encourage the use of electric motors and PHEV. Otherwise, PHEVs will continue to follow the non-emission-free vehicle rules.
And for your employees?
If you allocate a company car that your employee can also use privately, this benefit will be taxed as a fixed benefit in kind that depends on the list price and CO2 emissions and the fuel type. The status of the company car as an alternative remuneration will remain in place until after 2030. For the time being, therefore, nothing will change in the benefit in kind of the company car with respect to the employee. Although electric vehicles generally have a higher list price, zero emissions can make up for the difference and in many cases, turn out favourably for your employee.
What about charging?
To help your employees make the most of an electric car, you can have a charging station installed at their home if possible. Both the device and the installation at your employee's home are 100% tax deductible and there is no additional tax benefit for them.
As a company, you can, under certain conditions, benefit from an increased cost deduction for the installation of charging stations on your company premises. This amounts to 200% for investments made in the period from 1 September 2021 to 31 December 2022 and 150% for depreciations relating to investments made in the period from 1 January 2023 to 31 August 2024. A condition is that the charging station is depreciated linearly over at least five taxable periods and at the earliest as of the fiscal year that is linked to the taxable period during which the charging station is operational and publicly accessible.
Switch to an electric fleet
In addition to favourable tax conditions, there are many other excellent reasons to opt for electric cars today.
- It is an environmentally friendly solution that leads to 17-30% less CO2 emissions than the emissions from ICE (Internal Combustion Engine) vehicles throughout the entire life cycle of the vehicle.
- A wide range of new models is already on the market today and will only increase in the coming years.
- Most new models already have a driving range of 300 to 600 km.
- Advantageous Total Cost of Ownership (TCO).
- Electric driving is pleasant and causes much less street noise.
- The public charging infrastructure is expanding rapidly.
- Access to low-emission zones and cities that ban diesel vehicles.
Nowadays, responsible fleet management is built around sustainability. Don't wait any longer to electrify your fleet and reduce your company’s ecological footprint. Our mobility partner Arval will help you to green your fleet and support you in your transition to electric vehicles.
Discover all our solutions or discuss them with your relationship manager.