Chinese investors eyeing Europe

There are solid reasons to invest in Belgium because it allows 100 percent foreign ownership and no limitations are required on repatriation of capital and benefits, Wolfs said.

China has become Belgium's second largest trading partner outside the EU, with a bilateral transaction volume of $29 billion in 2011, up by 31.5 percent.

The top five imported goods from China are electrical equipment, machinery, steel, organic chemicals, textiles and clothes.

"China has been strongly increasing its outbound foreign direct investment to Belgium. Chinese and Belgian sovereign funds work together to help Chinese companies invest in Europe," said Huang Weihua, senior manager for China practice at KPMG's Brussels office.

According to Huang, Chinese companies that established a foothold in Belgium are from a wide range of sectors including automotive, logistics, banking, telecoms and services.

Recent years have witnessed a clear, rising interest from Chinese companies in cross-border mergers and acquisitions, in addition to green-field investment, Huang said.

For instance, Sinochem Group acquired 35 percent of the equity in Belgium-based agro-industrial firm SIAT NV in 2012 and Huawei Technologies acquired a 100 percent stake in the telecom equipment provider M4S NV in 2010, making it a fully owned subsidiary.

Belgium has extended a series of policy incentives to attract foreign companies, Huang said. According to local laws, an EU holding company in Belgium can benefit from an exemption enabling the withholding of tax on dividends paid to its affiliated companies in the EU and in jurisdictions with which it has tax treaties.

Companies also do not have to pay taxes on the payment of interest and royalties, 95 percent of the dividend received and enjoy total exemption from capital gains on shares.

According to the EU's Institute of International and European Affairs, the effective corporate tax rate in Belgium is around 4.8 percent, much lower than most EU countries. For example, the rate in the United Kindom is 23.2 percent and in Germany it is 22.9 percent.