Which countries have the best foreign direct investment (FDI) opportunities for an individual or corporation? How does the United States compare to the rest of the world?
With global expansion dominating the world scenario swiftly, many people have started to look for options outside their motherland. The basic factors to start any business includes tax rates, infrastructure, the capacity of trade, investor protection, corruption, access to utilities, quality of life, red tape, freedom (personal, trade, and monetary), and workforce.
The Netherlands has been recognized as the best country in the world for foreign direct investment (FDI), according to the CEOWORLD magazine 2020 report, while Singapore and New Zealand placed second and third, respectively. The 2020 rankings placed France in fourth ahead of India into fifth; while the United Kingdom ranked sixth, and Australia seventh. Overall, among the top 10 best countries in the world, for its citizens to live, the eighth, ninth, and tenth positions are held by the British Virgin Islands, Switzerland, and Luxembourg.
Countries With the Best Foreign Direct Investment Opportunities ranking is an annual survey of global business executives, financial advisors, affluent families, financial institutions, corporations, private investors, and high-to-ultra high net worth individuals that ranks markets that are likely to attract the most investment in the next three years. The survey was conducted from January to April 2020, gathering over 132,500 replies. All participating companies have annual revenues of $100 million or more. The companies are headquartered in 84 countries and span all sectors. Ranking scores are based on responses only from companies headquartered in foreign markets. For example, the ranking score for the United Kingdom was calculated without responses from UK-headquartered investors.
Countries With Best Foreign Direct Investment Opportunities, 2020
|Rank||Country||Investor Friendliness Index||Investor Sentiments Index|
|8||British Virgin Islands||94.73||94.51|
|19||United Arab Emirates||92.86||91.71|
|76||Saint Kitts and Nevis||82.78||82.36|
|78||Antigua and Barbuda||82.72||81.81|
|84||Bosnia and Herzegovina||81.4||80.61|
Luxembourg (Ranked 10th): This landlocked country in the European continent finishes on the second spot after Finland. Touted as one of the wealthiest countries in the entire continent, the citizens here enjoy a high standard of living. The country has a top-notch finance sector that is the biggest contributor to its economy. With a high bureaucracy standard, low manufacturing costs, corruption-free society, and transparency in government policies, Luxembourg is another top favorite for setting a business.
Canada (Ranked 17th): The only North American country to make it to the list is Canada. Functioning highly on the major attributes such as bureaucratic policies, corruption-free environment, transparency in government policies, and low manufacturing costs, the nation is best for conducting business. All thanks to the immigration policies exercised by the government, Canada has become a forerunner in economic stability. These factors together have to lead the nation in achieving an excellent business environment for all startups leading to unhindered business operations.
Denmark (Ranked 21st): Another Scandinavian country to make it to the list is Denmark. The effective digitalization process is one of the major factors that contribute to the nation’s business policies. Another prime takeaway is the inculcated digital methods, which help in the registration of new business in a single day. The trade policies of the country are also easy due to the ‘free border’ scenario and the flexicurity model helps businesses to expand quickly.
Sweden (Ranked 26th): Sweden is another major player when it comes to business policies. The easy to operate government policies, the standard of living combined with an attractive infrastructure makes it easy for setting up a business. Another factor that helps the country to carry out commerce is skilled labor forces. These all are the prime factors that have together made the nation an epicenter for operating new business easily.
Finland (Ranked 32nd): Finland is a Nordic nation in Europe that is regarded as one of the best places to start a business. The Finnish government welcomes international companies warmly as they harness a lot of opportunities for innovation. Businesses who prefer to start their venture also enjoy a plethora of benefits in the nation. As Finland’s economy primarily relies on free-market capitalism, about one-third of GDP comes from international trade. Also due to the support of the government, setting up a business in the country is very easy and takes only a couple of weeks to start off.
Norway (Ranked 37th): The arctic oasis in the Scandinavian peninsula is also one of the favorable countries open to business. Norway has successfully leveraged the strong technological sector to the energetic workforce, making it a global business leader. The high-income nation with a bustling private structure has one of the most efficient systems in the world for conducting business. Also, the country’s startup procedure including all the formalities takes only 4 days and thus makes it easy for a business to operate smoothly.
Thailand (Ranked 41st): If you are looking for an ideal place to level up your business abroad, then Thailand is the best match. Posing as a gateway for economically powerful countries like India and China, the country is best for business operations. Ranking high in factors such as cheap manufacturing cost, ease of access to the capital, bureaucracy, and connection to the rest of the world, setting a business in the nation is really easy. It takes hardly five days for starting a business in the nation and due to the low density of startups, services are easily affordable.
Detailed findings & methodology:
In order to determine the rankings, researchers at the CEOWORLD magazine compiled analyzed and compared 84 countries across two key categories: 1) Investor Friendliness and 2) Investor Sentiments. To evaluate those dimensions, researchers looked at 16 indicators that fell into one of the three categories. Each attribute was graded on a 100-point scale.
1) Investor Friendliness Index
Number Of Failed Businesses (Employers With Over 100-Plus Employees)
Productivity (Based On Per Capita GDP)
Productivity (Based On Purchasing Power Parity GDP)
Access To Capital
Stock Market Performance
2) Investor Sentiments Index
Cost Of Living (Grocery, Housing, Utilities, Transportation, And Healthcare Costs)
Business Tax Climates (Corporate, Individual Income, Sales, Unemployment Insurance, And Property Tax Rates)
Quality Of Life (Access To Healthcare, Education, And Physical Safety)
Availability Of Employees
Working-Age Population Growth
Education Level Of Potential Employees
Raw data for countries were normalized on a 1-100 scale according to the following: Each individual indicator was given equal weighting within each of the two categories with some indicators being comprised of 2-3 sub-indicators that were also weighted equally. Each category was weighted equally to arrive at the overall index.
Sources: CEOWORLD magazine put together a panel of experts to go over data points culled from sources like the EIU Index, World Economic Forum, Global Insight, the Global Gender Gap Index, Gini, and Gender Gap index, The Legatum Prosperity Index, Transparency International, Environmental Performance Index, Better Life Index, CIA World Factbook, World Bank, UNDP Annual Report, as well as CEOWORLD magazine research. They then used that information to compare the world’s countries for its citizens and residents. Based on a consensus from these sources, the final choice of cities was judged editorially, as was their position on the list. All data is for the most recent period available.
Detailed survey data and information collected directly from 132,500 individuals, across 16 data points.
The rankings are the result of a rigorous analytical exercise, incorporating multiple data sources, without relying on DMOs (destination marketing organizations) and EDOs (economic development organizations) data submissions. This rankings should not be viewed as the most important aspect when choosing a country for foreign direct investment (FDI), and are merely one element to consider. However, this is by no means a comprehensive list, while the institutes above are the “CEOWORLD magazine’s Countries With the Best Foreign Direct Investment Opportunities For 2020,” there may be many other countries that offer excellent opportunities.
Global business executives, financial advisors, affluent families, financial institutions, corporations, private investors, and high-to-ultra high net worth individuals were asked to rate institutes on a scale of 1 “marginal” to 100 “outstanding” or “don’t know.”
The margin of sampling error for the full sample of 132,500 respondents is plus or minus 1.2 percentage points. In addition to sampling error, one should bear in mind that as in all survey research, there are possible sources of error—such as coverage, nonresponse, and measurement error——that could affect the results.
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