Much uncertainty remains with the official exit from the EU scheduled for March 2019. Some U.K. companies are holding off on investments to see how Brexit effects trade relations, and growth is forecasted to slow in 2018, but Britain’s business climate remains attractive. The U.K. ranks first for the first time in Forbes’ 12th annual survey of the Best Countries for Business.
The U.K. ranked among the top 25 countries (out of 153 measured) in each of the 15 metrics tracked, outside of political risk where it ranked twenty-eighth. Great Britain ranked fifth overall last year.
Wells Fargo and Apple both made substantial moves within London since the Brexit vote. Wells Fargo spent $400 million to buy a new European headquarters in London’s financial district. Apple announced plans to open a new London campus in 2021 that covers nearly 500,000 square feet of space. Facebook is also in the market for 700,000 square feet to accommodate 9,000 employees. “These commitments signal a belief across industries in the long-term strength of the U.K. economy,” says Jeff Lessard, who helps companies with location strategies as a consultant for Cushman & Wakefield.
The U.K. scored particularly well on technological readiness (fourth) and the size and education of its workforce (third). Its $2.6 trillion economy is the fifth largest in the world. London serves as the central hub for European financial services and is home to financial giants like HSBC, Prudential and Barclays. “The best thing going for the U.K. is that London is one of three global hubs for financial services,” says Lessard. “Post-Brexit, a few European cities have the opportunity to challenge London but each has deficiencies.”
Britain’s reign as the top country could be brief as companies’ plans for Brexit unfold. London might lose 10,000 banking jobs as a result of Brexit, according to think tank Bruegel. Citigroup, Morgan Stanley, Nomura and Standard Charter are moving their EU headquarters to Frankfurt, with Paris and Dublin landing spots for other banks looking to ensure access to the single market.
“The single biggest issue Britain will face is the frictionless participation in their economy of highly educated global talent. Talent is the key that unlocks innovation, growth, and competitiveness,” says Matthew De Luca, a strategic consultant with Cushman & Wakefield.
We determined the Best Countries for Business by rating 153 nations on 15 different factors including property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape and investor protection. Each category was equally weighted.
We tweaked our methodology this year for the first time in a decade after conversations with multiple site-selection experts. Stock market performance is out, and we added workforce, infrastructure, market size, quality of life and political risk to provide a better gauge of how attractive a country is for capital investment. The data is based on published reports from Freedom House, Heritage Foundation, Property Rights Alliance, United Nations, Transparency International, World Bank Group, Aon, Marsh & McLennan and World Economic Forum (click here for more details on the methodology and the best and worst country on each metric).
New Zealand ranks second overall for the third straight year. The island country in the southwestern Pacific Ocean is home to only 4.5 million people, but the economy has been on a roll, up 3.6% last year. Among the countries in the top 20, only Ireland’s economy expanded faster.
New Zealand has transformed from an agrarian economy to an industrialized, free market one over the past four decades. The Kiwi nation privatized dozens of industries like airlines, insurance, banking and telecommunications previously controlled by the government. It scores first overall for red tape, corruption and property rights.