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Seven pointers about investment in Belgium

Belgium
11:05 01/11/2013
  1. Do your homework: invest in products you understand; study the small print before you buy; understand the risks and what return is expected or guaranteed. Know how to get out and at what cost. Be aware of the taxation of the product according to your personal situation.
  2. Property can be a long-term investment, but it also ties up your assets, which is not good for diversifying your portfolio. In theory, diversification, geographically as well as by sector, lowers your risk and increases your long-term return. You also need to understand the tax implications of owning property. There are other ways of investing in residential and commercial property, via listed companies or mutual funds.
  3. Independent financial advice is rare. If you pay for advice without any obligation to buy a financial product, then it is real independent advice. Though high street banks are not independent advisors, the product range they offer is large and can include third-party funds.
  4. When you invest in financial companies outside the country where you are fiscally resident, you are usually obliged to declare the income. Some countries, such as the US, have citizen-based principles for declaring tax. If this applies to you, don’t forget to file tax returns in that country too, even if you are a fiscal resident of Belgium or another country.
  5. Property is usually taxed in the country it is in. The country where you are fiscally resident may also require you to report it, or its income, which may affect your taxable income.
  6. Double taxation treaties between countries usually mean you don’t have to pay tax twice. Though there may be a small administration cost per year, ask your bank to apply the double taxation treaties that affect you, particularly if you receive dividends from abroad. Belgian double taxation treaties: www.fisconetplus.be
  7. It is advisable not to borrow money for investment purposes in the hope that you can repay the loan with future gains. If your investment fails, you still have to repay the debt. If you invest in a risky product, do so with money you can afford to lose, or your standard of living could be compromised.
Written by The Bulletin