WITH THE UK ECONOMY officially back in recession and levels of business confidence stuck in the doldrums, “investment in business” are three words rarely seen together these days.
But the dark economic clouds are not without silver linings. The UK remains an appealing place for overseas businesses to invest in, for a number of reasons.
Despite its surge in April, the Pound is still relatively cheap compared to many of the more buoyant foreign currencies, and Britain has long been one of the easiest European countries in which to set up and run a business.
In March the Chancellor sought to make it cheaper place to do business too. George Osborne announced a larger than expected cut in the main rate of corporation tax, and a reduction in the top rate of income tax, in what he described as an “unashamedly pro-business” Budget.
Britain’s enviable reputation for being business-friendly has led many overseas companies to establish a UK subsidiary or branch as a base from which to develop their share of both the UK and European markets.
With more than half a billion inhabitants, the European Union is the world’s largest single market – and a plum target for investors from further afield.
By being outside the Eurozone, the UK can provide the perfect beachhead – with easy access to the EU market, but insulated to some degree from concerns over the Euro.
UK employment laws and red tape are frequently less onerous than those of our European neighbours, and the country has rightly earned an image as a business-friendly place to invest.
As an English-speaking country, the UK also has an advantage over many of our continental rivals. Investors in Britain can feel confident that everyone in the country speaks the international business language, English.
The UK also has good access to many world markets – particularly those of its trading partners in the Commonwealth.
The logistics of doing business in an overseas market are much easier now than they once were too.
The advent of online purchasing and procurement has made cross border transactions easy, and the need to have a large workforce on the ground is reducing.
Online bookkeeping and accounting services aid companies to operate their accounting and treasury centrally, and therefore keep overheads to a minimum.
With its associated slew of unfamiliar laws and regulations, opening a business in a foreign country can seem intimidating, but it needn’t be overwhelming.
Of course it shouldn’t be attempted without first doing some detailed research and seeking expert advice.
But while the prospects for Britain’s economy this year are modest at best, the UK is still seen as a stable and attractive place in which to do business.
For all its economic problems, Britain has not lost its appeal for foreign capital. Our rock bottom interest rates are hardly a draw, but for overseas businesses seeking a foothold in Europe, UK Plc is as appealing as ever.
Michael Davis is managing partner of HW Fisher & Company
Image credit: Shutterstock
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