Business in the United Kingdom essay
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United Kingdom is notably the best business destination for many investors in the world. The GDP of United Kingdom stands at $ 2.47 trillion and grows at 5% per year (MIEPA, 2011 p 34). This region boasts of very stable political systems which do not practice any discrimination towards businesses and corporations. The number of active tax payers is up to three million people. United Kingdom government exercises very friendly tax policies towards investors. Exorbitant tax values have never been a part of United Kingdom. The United Kingdom foreign exchange market is said to be third largest in the world. This brings a message of economic stability.
United Kingdom has a wide variety of financial services. London for example houses 85 of the world’s top one hundred banks. Several insurance and equity companies also have their offices in United Kingdom. The heavy presence of financial institutions makes this region very good for investments (Tsang, 2007, p 65). Accessibility is further enhanced in United Kingdom. This region is accessible through a sea route as well as air. Transit and transfer of goods of all kind can excel in this region. As a result, very many manufacturing and processing companies have acquired premises in United Kingdom. The free tax policy and a stable government greatly inspire many investors to jet into United Kingdom.
Economic environment in the United Kingdom
London is the economic hub of the UK. This region is made up of England, Wales, Northern Ireland and Scotland. Analysts affirm that UK is a very stable Economy by all measures. London, which is the economic hub of this region, is the largest stock exchange market in the world. Investors should have no fear at all when launching into UK. The United Kingdom is a sovereign state and enjoys great security with its neighbors (Osborne, 2004, p 23). Investors should not fear for damage of property as a result of political wars and coup. The government is also very stable in its operations and policy dispensation. The government has never put any pressure for businesses to abide under any unfair obligations. This government has set a rather free market kind of business environment.
The government has never put any forced taxation on any foreign investment. The local businesses are equally protected from the UK government infringement. This translates into an excellent business environment both for the natives and foreigners to the land. The free trade orientation of the UK places it on a stable platform for business.
Firms within the region
The United Kingdom has very many manufacturing firms dotted all around its territory. This region developed its manufacturing power during the industrialization age. The industrial revolution greatly took place in Europe. Many agricultural firms provided the mush needed raw materials for the industries. These industries still provide ready market form many items reduced within the region. It should also be noted that the United Kingdom also enjoys excellent government support for foreign exchange (MIEPA, 2011, p 55). Many people go ahead to import raw materials for their businesses. It is easier to get raw materials from overseas. This is another booster for trade in the United Kingdom.
The heavily industrialized nation provides excellent market for trade. Businesses also enjoy wide variety of raw materials when trading. The population in the United Kingdom is great business strength. The population is well informed and educated. This provided a work force that is very necessary for the growth of business. This region is getting globalized at a very high rate. The fast rate of globalization is very important for the businesses (MIEPA, 2011, p 76). This means that the populations are very receptive to the new trends in the market. The purchasing power of such a generation is so high.
United Kingdom has excellent infrastructure. Research has it that great infrastructure is one of the basic requirements for trade to thrive. Good road network, air transport and sea ways have all contributed to excellent trade in this region. Investors will find it easy to transport raw materials and the finished products to and from companies. The air transport is also in a great orientation. Many businesses can also have their fast products exported into the foreign markets by air. United Kingdom also enjoys excellent entertainment industry (Osborne, 2004, p 44). Many people like clubbing and sporting. The weather in this region makes it so easy to have some rare sports that do not exist in other parts of the world. This opportunity makes business environment so welcoming. Many opportunities can be exploited in such a region.
Financial markets and sources of capital for multinational companies
The UK was ranked as the third best market to do business in the year 2005 (Ephraim, 2008, p 45). The London stoke exchange is one of the largest markets in the world. This market ranks number three in the world as of today. The UK has high levels of transparency and accountability (Ephraim 45). The share prices are displayed instantly without the intervention of market manipulators or share maker. The United Kingdom stock market has enabled many companies to attain privatization status with ease. The United Kingdom economic risks are amazingly low compared to other countries of similar caliber. The GDP of United Kingdom stands at $ 2.5 trillion and grows at 5% per year. This is a very stable economy and ranks number seven in the world.
Records obtained in 2006 reveal that over two hundred foreign banks had offices and branches in United Kingdom. This city also housed 85 of the world’s top one hundred banks. This shows the ease with which credit and loans can be accessed in United Kingdom (Tsang, 2007, p 132). Investors have a wide range of banks and financial institutions to choose from. Insurance companies also numbered 200 by the year 2000. Of the above insurance companies, 130 were of foreign decent. The number of trusts and mutual funds that were present in United Kingdom reached 2000. The capital market of United Kingdom stoke exchange was estimated at $ 4.0 trillion in 2000. Such huge sums of money can only circulate in a stable and politically motivated territory.
Tax Structure and Investment Incentives for foreign businesses in United Kingdom
United Kingdom tax system takes the form of territory. The United Kingdom government mainly taxes income on profits. It is however important to note that the moneys must have been generate from within the boundaries of United Kingdom. Online companies have greatly benefited from trade in United Kingdom. Taxation measures for online sales and purchases have remained so volatile for a long time. The United Kingdom government has a one time registration of companies. The tax paid during this time is can sometimes be the only moneys charged by the United Kingdom government. The government also charges land rates on property. These are meant to empower the United Kingdom government in its bid to provide various services to the people. Car registration is another area of taxation by the United Kingdom government (Tsang, 2007, p 59). Report has it that United Kingdom charges high amounts compared to many stable economies in the world.
The United Kingdom has always floated various motivational moves to encourage companies invest in this region. Some incentives include a slash on the fuel taxes to reduced minimums. The government has also proposed to reduce business registration fees for foreign investors. It is also important to note that foreign companies always have an easy time in securing capital form the many financial organizations in United Kingdom (Adrian, 2001, p 12). The loans are also taxed but to a reduced minimum.
Challenges of doing business in the UK
Online businesses are at great risk due to security lapses that have become common as of today. Computer networks have often been hacked and information leaked. A lot of moneys have also been lost as a result of siphoning. Cone men have also been reported to exist in the UK business industry. This issue of conning is however universal and exist in many parts of the world. The advantages however override the disadvantages.
United Kingdom stands a better chance to motivate many business investors to stream in. this territory has very few tax limitations that would keep off investors from streaming in. investors always prefer regions from where they will get more financial returns for their moneys. Investors also like places which have very stable political strictures. United Kingdom qualifies as the best investment d estimation in the whole world. Currently, the United Kingdom stoke market is ranked number seven in the world. This means that economic security is highly enjoyed by businesses in United Kingdom.
United Kingdom further has a tax policy that only targets businesses tat draw their income from within the region. Businesses which get sales from offshore regions are always tax exempted. The government only levies taxes on profits. Any moneys that do not belong to the profits column will not suffer any taxation. Many businesses have enjoyed their presence in this region.