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Why
invest in
the UK?
The UK is one of the leading business locations in the world thanks to its business
environment. The UK, in its own right, is a major market and the fifth largest economy
in the world, according to the Center for Business and Economic Research (World
Economic League Table 2016). Helped by certain fundamentals - its language, its
location and its legal system - but also by its engineered business friendly environment
- the UK comes in the top 10 places of the “Ease of doing business ranking,” according
to the World Bank Group Flagship Report for 2015. This is second only to the U.S. in
terms of the big developed economies - the UK has been a global leader in inward
investment for 30 years.
During this period, the UK has also gained from being a gateway to the European
Union, its common market and its 500 million citizens. At the time of writing, it is the
potential for “Brexit” - British exit from the European Union - which provides pause
for thought in the otherwise very attractive proposition that is investment into the
UK economy.
“Brexit”
Let’s deal with this risk, first.
The UK will decide in a referendum on 23 June 2016 whether to remain in the EU.
Those who favor departure from the EU are skeptical of claims about the economic
benefits in free trade and services, think the EU costs too much (both in the amount
the UK has to contribute to the EU budget and in the amount of “red tape” arising
out of European regulations) and wish to regain sovereignty over decision making and
immigration from EU member states.
Those who favor the UK’s continuing membership of the EU base their arguments on
the economic importance of free trade in goods, services and people within the EU
and the economic consequences arising from the attempt by the UK to use Article 50
of the relevant treaty to withdraw from the EU by agreement.
Much global cross-border M&A activity centered on the UK with US$313 billion
of investments from Eurozone and other overseas’ investors, according to the
Deloitte M&A Index 2016. Into Q1 2016, the UK remains at number two behind
only the U.S. in terms of the volume of M&A deals, according to data provided
by Thomson Reuters.