Investments in the UK: Why investing is important & where to invest?
- 08 Dec 2021
- 4 minutes read
Despite the pandemic, business investments in the UK have seen a 9.4% increase in the second and third quarters of 2020. There is a reason why people show a lot of interest to invest in the UK. With a GDP of USD 2.71 trillion in 2021, the UK is the fifth-largest economy globally.
If you are hesitant about investing in the UK, this blog post is for you then.
It covers various important aspects of investing in the United Kingdom. Make sure to stick till the end to know about the business and investment environment here.
Why invest in the UK?
○ GBP is a "safe haven"
The Pound Sterling is considered a "safe haven" by investors and governments globally.
The currency has proved resilient over and over again. Thanks to the strong export and a good balance between imports, lower political risk and investor trust.
○ Robust business environment
Every business needs a consumer base no matter where they start, and the UK has a large consumer base. Here the market is filled with high spending people and a liberal economy.
The UK provides a flexible environment for businesses to invest in with straightforward regulations. Companies can start and expand to other parts, trade and invest in the UK without worries. One language everywhere, coupled with an excellent legal system and funding environment, makes it one of the easiest markets to invest in.
○ A clear and competitive tax system
The tax system in the UK is transparent. Any company established in the UK pays a corporate tax of 19% on the company's profits. Any business with a branch has to pay the same for profits originated in the UK.
This tax percentage is competitive and one of the lowest in the world. The corporate tax rate is to rise in the coming years to 25%.
Apart from these, there are incentives for investment in technological, carbon-neutral and other sectors.
○ Outstanding talent and flexible labour laws
Do you know that the UK is in 3rd place for attracting global talent? Many people are choosing to work in the United Kingdom. This provides an excellent opportunity for businesses to select the right talent to work with them.
There are 32 million people in the labour force with a 75% employment rate. This labour force is expected to grow over many folds in the coming 15 years, contrary to many other countries.
Apart from people flocking from all over to the UK, labour laws in this country are another addition for attracting more companies.
They are flexible, providing benefits for the business owners and the employees. You can choose who you want to hire, what type of hiring, and how much period you wish to hire the candidate for your organisation.
Recruiting in the UK is easy and even downsizing your company is just as simple.
And also, do you know why the economy here is so good? It's because of the incredible talent that the UK nurtures. It has the best of minds here who add significant value for businesses. Being the home of four universities from the top 10 in this world, the talent you find in the UK is unique, but it is the best.
The apprenticeship (a common practice in the UK) is another way to cut costs. This apprenticeship will help people earn while they learn and enable the business to nurture young talent. The UK government provides financial support to the companies that offer apprenticeships in England.
○ Best-in-class infrastructure
Infrastructure is another jewel in the crown of the business world in the UK. It has everything necessary for companies to conduct business. Here are some of the essential achievements of the UK in infrastructure-
- The robust digital infrastructure supporting the tech sector
- The fourth-largest railway network in the EU
- Has most extensive air transport system in entire Europe making it easy to connect globally
- Perfect time zone- be it east or west. It is located in the right place to travel to different places with ease.
When it comes to tech infrastructure, the UK stands atop. It has a super-fast broadband connection and is all set for companies planning to build an IT sector here.
In 2018, Forbes ranked the UK as the most friendly business environment with its technology readiness.
Apart from this, it offers transportation for both humans and goods at a very affordable cost. With different types of transportation available, it is one of the major trading nations in the world.
○ Innovation opportunities
The UK has been committed to innovation, research and development for a long time now. This has helped businesses in reaching up to their full potential.
More than half of the investment in the R&D department of the UK comes from foreign companies. With various tax incentives and great support from the government, there is enormous scope for growth in this area.
Here government helps you with various aspects apart from tax incentives if you are trying to be innovative and add value.
○ Clean energy
The UK is not just about economic success; the nation believes in saving the environment too. It is one of the developed nations working towards providing clean and sustainable energy. The UK is committed to clean growth, and if you want to work in that area, then there is no other better place to invest.
Where to invest in the UK?
Now that you have many reasons to invest in the UK let us discuss where to invest.
○ UK property market
The UK's residential and commercial real estate has always been robust and resilient to economic downturns. Since 2007's financial crisis, the market has gone up steadily, with valuations are at an all-time high.
○ Renewable energy
As said earlier, the UK is committed to providing clean energy.
In the November of 2021, the government announced the "green industrial revolution" with a ten-point plan. It will cost circa £12bn and make the nation carbon neutral by 2050. Investors are flocking to make the most out of this revolution.
○ Research and development
The UK has always been keen on supporting R&D in the country irrespective of the industry. As said earlier, it offers so many benefits for the people who are investing.
- Carbon capture, usage and storage
- Civil nuclear
- Clean agri-tech
- Green finance and innovation
- Greener buildings
- Healthcare and life sciences
- Jet zero and green chips
- Offshore wind
- Precision medicine
- Zero-emission vehicles
The UK has always been open to investors and various innovative ideas. It is a flourishing nation with a robust economy and a stable government to support young and budding investors worldwide. The number of entrepreneurs here is increasing every year, which proves why it is such a great investment environment.
Every business needs government support, a perfect taxing system, infrastructure and consumer base to thrive, and the UK has all of these. The government here is looking for new projects and entrepreneurs from all over the world to support making it a business-friendly environment.