Red tape is putting a lot of organisations off investing in the UK, according to recent research from BDO.
The firm surveyed CFOs from 750 medium-sized companies in 13 countries around the world, including the UK, for its Global Ambition Survey. Almost all said they were positive about their international expansion plans, even though the economic climate is going through a period of turbulence.
In three years time, 46% of UK organisations revenues are predicted to come from operations overseas. Worldwide, CFOs expect overseas operations to contribute 44% to their revenues; up from the current 37%.
However, 34% of international CFOs say that bureaucracy and red tape are a key challenge for organisations investing in the UK. 45% cited intense local competition and 43% said currency fluctuations were also considered a key challenge.
When it comes to expectation of revenue growth, the UK ranks 8th, according to BDO’s Global Market Opportunity Index. China and Brazil come in at number 5 and are thought of as three times more attractive as a destination to start up overseas operations than the UK.
74% of CFOs in the UK think they will have no problem obtaining funding for expansion. However, 68% of UK CFOs think it will be a challenge to find local people with the right skill set and more than three quarters of them said their focus over the next three years would be investing in people.
Kim Hayward, an international liaison partner at BDO, said it was encouraging to see UK CFOs displaying optimism about expansion overseas, but the UK could miss out on inward investment. The government needs to address the problem of red tape if we are going to encourage global companies to invest here.
Meanwhile, the UK’s small businesses think excessive taxes and red tape are stopping them from going green.
According to a recent report from the FPB, 77% of smaller businesses think it is possible to improve their green credentials, but 52% cited green taxes as the barrier to reducing their use of energy. A large proportion also think that the current regulations favour large organisations and do not factor in the problems faced by smaller businesses.
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