As we enter a new year, and new decade, prospects for the future are at the top of everyone’s minds. The UK underwent many changes last year, Brexit has played a significant role in global investment in the UK. Cutting ties with the EU has forced the UK to forge closer links with other strategically important bilateral partners like China and the Middle East. While companies from the rest of Europe are bracing for a potentially messy divorce between the UK and EU, other global investors actually see a lot of upside in the country.
A contributing reason for the UK’s high performance as a destination for international investment is the depreciating pound. Energised by a Brexit-battered pound, international businesses poured more money into the UK between January and August 2019 than they did in the entirety of 2018, according to Deloitte.
The UK is known to be liberal and open to foreign trade and investment, and has a stable political, legal and social environment. These qualities have over many years enabled this country of 65 million people to remain globally visible and wield considerable influence in international politics, economy, science, technology and culture.
The tax advantages of setting up a UK business can’t be overlooked – at Summer Budget 2015, the UK government announced legislation setting the Corporation Tax main rate (for all profits except ring fence profits) at 19% for the years starting 1 April 2017, 2018 and 2019. It is worth pointing out that the corporate tax rate is 25% in China and 21% in the US.
The process of incorporating a private limited company in the UK is simple and swift (very minimal information is required) and it can be formed as quickly as within 24 hours. There is no minimum paid-up capital or capital duty required and once the company is incorporated, investors can apply for the business visa, which allows multiple entries and a maximum of six-month stay in the UK for up to five years.
In addition, the, Post-Study Work (PSW) visa was brought back to life in September 2019, after Theresa May put a stop to it and forced all international students to leave only four months after finishing their degrees back in 2012. With the visa relaunch, the UK is expecting a spike in international student enrolments in universities, which is bound to bring a fresh breeze to the real estate investment market. Combined with the UK’s Tier 1 Investor Visa, more and more students will be encouraged to stay in the country and start their own businesses.
Global investment heavyweights, particularly China, made the UK the second preferred investment destination after Sweden, surpassing Germany and France, amongst all European countries having poured £1.2 billion investment into the country during the first six months of 2019. The Chinese Ambassador to Great Britain Liu Xiaoming said, “Events I attend the most during my seven years here are the opening ceremonies of Chinese companies in the UK,” during an interview with China Daily in late 2019.
So in response to a challenging yet promising 2019, 2020 is on course for more changes, however, as the country begins its biggest transition outside of the EU so far, it seems to be a positive start of the year.