Investing In People: Country Strategies

Many factors determine a country's investment status, including its people, environment, relationships, and framework. Political and economic stability are key to attracting international investors, with political stability and security along with a stable legal and regulatory environment outweighing considerations of tax rates and labour costs.

The United States, the United Kingdom, Germany, Singapore, and China are among the top recipients of foreign direct investment. Meanwhile, countries like the United States, Israel, and Germany have high access to venture capital and are at the forefront of innovation and high returns on investment.

- Philippines

- Indonesia

- Poland

- Malaysia

- Singapore

Countries with the most foreign direct investment

Foreign direct investment (FDI) is a significant driver of economic growth and development, with countries around the world vying to attract investment to boost their economies. Here is a list of countries that have been top recipients of FDI in recent years:

China

China has experienced significant growth in FDI in recent years. In 2020, China was the top recipient of FDI inflows globally, receiving $212.5 billion, a 14% increase from 2019. This trend continued in 2016, with foreign direct investment in China reaching $170.6 billion, an all-time high for the country.

United States

The United States is consistently one of the leading recipients of FDI. In 2020, it ranked second globally, attracting $177.1 billion in FDI inflows. While this represented a decrease from the previous year, the US economy remains highly attractive to foreign investors. In 2021, foreign direct investment in the US increased to $4.98 trillion, with the Netherlands and the UK being the top sources of this investment.

United Kingdom

The UK is a significant recipient of FDI, with a strong track record. In 2016, it attracted $299.7 billion in net foreign direct investment. According to the British Office for National Statistics, while only 1.2% of UK companies received foreign direct investment in 2014, these companies accounted for 18% of employment and 33% of wages. The UK continues to be a top destination for FDI, ranking third globally in 2022 for FDI inflows.

India

India has been experiencing a surge in FDI inflows in recent years. In 2020, it attracted $64.4 billion in FDI, a more than 25% increase from 2019. This growth has made India the fastest-growing investment region, according to a report by KPMG. Real estate and infrastructure investments, particularly from Canada, have contributed significantly to India's FDI inflows.

Germany

Germany is another European country that has consistently attracted high levels of FDI. In 2016, Germany received $52.5 billion in foreign direct investment, recognised for its strong infrastructure and qualified workforce. However, in 2020, Germany experienced a year-on-year decrease in FDI inflows, recording $35.6 billion, a 34% drop.

Ireland

Ireland has established itself as a leading destination for FDI. In 2016, it attracted $79.2 billion in net foreign direct investment. This trend continued in 2021, with Ireland being the third-largest recipient of FDI inflows among OECD countries. Ireland's favourable business environment and tax policies have contributed to its attractiveness for foreign investors.

Countries with the best property markets

When it comes to investing in property, there are a number of factors to consider. Rental yield, the annual return from renting out a property, is a critical metric. Higher yields mean better returns. Here are some of the countries with the best property markets in terms of rental yield and other factors:

Latvia

Latvia has the highest rental yield in Europe at 8.06%. It would take approximately 12 years of rental income to recoup an initial property investment in Latvia.

Ireland

Ireland has an impressive rental yield of 7.85%. It would take around 13 years of rental income to recoup an initial property investment in Ireland. Dublin, in particular, is an attractive option for investors, with an average rental yield of 7.33%.

Italy

Italy boasts a strong rental yield of 7.38%. It will take about 14 years of rental income to recoup an initial property investment in Italy.

Romania

With a rental yield of 6.63%, Romania offers attractive investment opportunities.

Lithuania

Lithuania has a rental yield of 6.44%, making it a worthwhile consideration for property investors.

Turkey

Turkey's rental yield stands at 6.36%. Istanbul, in particular, is a desirable location, with an average rental yield of 6.6%.

United Kingdom

The UK offers a solid rental yield of 6.21%. London, the country's capital, has an average rental yield of 5.59%.

Spain

Spain presents a good option for property investors, with a rental yield of 6.17%.

North Macedonia

North Macedonia has a rental yield of 6.00%, making it a viable option for those looking to invest in property.

Montenegro

With a rental yield of 5.95%, Montenegro is another country worth considering for property investment. Podgorica, the capital city, boasts an even higher rental yield of 5.7%.

Other countries that have been highlighted for their property markets include:

• China: China has the highest amount of global real estate market assets by value.
• United States: Together with China, the US makes up 42% of global property value.
• Japan, the UK, India, Germany, France, Brazil, Italy, and Russia: These countries account for 28% of the global real estate asset total.
• Portugal: Portugal has been praised for its favourable regulatory environment, making it relatively easy for foreigners to invest and own property.
• Brazil: Brazil offers diverse property markets, from tropical coastal regions to mountainous landscapes.
• Malta: Malta has a relatively strong economy and has seen a steady increase in real estate prices over the last decade.
• Antigua and Barbuda: This country offers tax benefits such as low taxes on rental income and no personal income tax on worldwide earnings.
• Grenada: Grenada has lower real estate prices and a location outside the hurricane belt, reducing the risk of storm damage.

These countries present some of the best property markets in terms of rental yield and other factors. Each country has its own set of pros and cons, so it's important to conduct thorough research before making any investment decisions.

Countries with the most favourable tax environments

Several countries are considered tax havens, offering low or zero tax rates for foreign investors. These countries generate revenue by attracting a large amount of capital inflow and imposing fees and charges. Here is a list of countries with the most favourable tax environments:

Luxembourg

Luxembourg is a small, landlocked country in Western Europe, bordered by Belgium, France, and Germany. It is one of the smallest and wealthiest countries in the world. Known for its low tax rates, Luxembourg attracts foreign investors and is considered a tax haven. The country has a favourable corporate tax rate of 15% and a progressive personal income tax rate that targets top earners with a rate of up to 42%.

Cayman Islands

The Cayman Islands, a British Overseas Territory, is known for its favourable tax laws, making it a popular choice for residency and investment. It offers a unique combination of luxury lifestyle and tax advantages. However, obtaining residency in the Cayman Islands can be expensive, with costs exceeding US$1 million.

United Arab Emirates (UAE)

The UAE has long been a popular choice for individuals and businesses due to its favourable tax laws, offering a relatively hassle-free residency permit and no personal income tax. While the recent introduction of a 5% VAT and a 9% corporate tax rate has made it slightly less attractive for businesses, it remains a favourable tax environment.

Singapore

Singapore, nicknamed 'The Little Red Dot', is a small but significant country in Southeast Asia. It has become a global business and cultural centre, attracting millionaires and billionaires from around the world. Singapore has a territorial tax system, meaning it only taxes income sourced from within the country. It offers a stable political climate and excellent healthcare and transportation systems, making it a desirable location for high-net-worth individuals.

Monaco

Monaco is a tax-free country with no personal income tax, making it attractive to high-net-worth individuals. However, residency in Monaco comes with certain requirements, including spending time in the country and depositing a significant amount of money in a local bank account.

Andorra

Andorra, nestled between Spain and France, is known for its duty-free shopping and favourable tax regime. The country has low income and corporate tax rates, with a maximum rate of 10%. There is no wealth tax, gift tax, inheritance tax, or capital gains tax, except on the sale of Andorran real estate.

Honourable Mentions:

• Switzerland
• Panama
• Jersey
• Bahamas
• Bulgaria
• Cyprus
• Georgia
• Gibraltar
• Liechtenstein
• Malta
• Montenegro

Countries with the most innovative workforces

Several countries are known for their innovative workforces, and these nations are recognised for their contributions to global innovation. Here is a list of countries with the most innovative workforces:

Switzerland: Switzerland has consistently ranked as the world's most innovative country for 13 consecutive years. It has a high concentration of scientific researchers and world-class research institutions. The country attracts top talent with its high quality of living and has strong collaboration between universities and industries. Switzerland also excels in business sophistication, knowledge-intensive employment, and researchers per capita.

South Korea: South Korea is a global leader in technology and innovation. It is the world's leading manufacturer of smartphones and televisions, with companies like Samsung, LG, and Hyundai. South Korea has established initiatives like the New Deal to promote smart healthcare, AI, and smart industrial complexes. The country also ranks highly in R&D intensity and has a high number of researchers per million population.

United States: The US has long been a global leader in innovation, introducing new ideas and technologies that shape the world. It is home to many world-leading technology companies, including Google, Apple, Facebook, and Microsoft. The US ranks highly in university-industry R&D collaboration and intangible asset intensity. It is also a top spender on R&D, with four out of the top five R&D spending companies located in America.

Sweden: Sweden has consistently ranked as one of the top innovative countries, known for its investments in research and development. It has a high level of university education and ranks highly in business sophistication, knowledge-intensive employment, and researchers per capita. Sweden invested SEK 155.5 billion (US$154 billion) in R&D in 2017, demonstrating its commitment to innovation.

Singapore: Singapore is known for its focus on education, with a high percentage of its citizens enrolled in or having completed tertiary education. It has a strong presence in the financial and innovation sectors, ranking highly in government effectiveness, venture capital received, and stability for business. Singapore is also a leader in institutions, with a favourable political climate and regulatory environment.

These countries have fostered innovative workforces by investing in research, education, and technology, creating environments that attract top talent and encourage collaboration between universities and industries. Their efforts have contributed significantly to global innovation and technological advancements.

Countries with the most attractive investment policies

Several countries offer attractive investment policies, and these are often determined by factors such as economic and political stability, tax rates, and labour costs. Here is a list of some countries with the most attractive investment policies:

Singapore

Singapore is a wealthy Southeast Asian nation with a bustling metropolis and one of the world's busiest ports. It has a high gross domestic product per capita and low unemployment, making it one of the wealthiest nations globally. Singapore also boasts a streamlined interface with the government, efficient permit processing, and a favourable tax environment.

United States of America

The United States is the world's dominant economic and military power, with a vast cultural imprint. It is the largest recipient of foreign direct investment, with a dynamic and innovative environment, a skilled labour force, and technological expertise. The country offers a favourable tax environment and has a large market, making it an attractive investment destination.

Germany

Germany has one of the largest economies in the world and is a member of the European Union. It offers political stability, a strong infrastructure, and a qualified workforce, particularly in the transportation and automotive industries. Germany is known for its economic stability and favourable tax environment, making it an attractive investment destination.

United Kingdom

The United Kingdom, while facing new questions about its role on the global stage after withdrawing from the European Union, remains an attractive investment destination. It has a highly developed economy and exerts considerable international economic, political, scientific, and cultural influence. The UK offers political stability, a skilled labour force, and a favourable tax environment.

China

China is the world's most populous country and the second-largest by land mass. It has seen a surge in foreign direct investment, with numerous new foreign-invested enterprises. China offers a large market and a dynamic, innovative environment, making it an attractive investment destination.

Luxembourg

Luxembourg is a small, wealthy country in Western Europe. It is known for its investment funds, with a wide range of investment vehicles available to all types of investors. Luxembourg's economy is based on financial services, and it was the first European country to establish an investment structure. The country offers economic stability and favourable tax policies, making it attractive for investors.

Ireland

Ireland has established itself as one of the leading financial centres in Europe. It is home to many fund managers and is a top destination for hedge fund startups. Ireland offers a stable legal and regulatory environment, as well as favourable tax policies, making it an attractive investment destination.

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