Why the UK hits the spot for US investors
The following article was kindly provided to BAB by Paul Harnick, Global Head of Chemicals & Performance Technologies, KPMG UK
American businesses have invested a total of nearly US$600 billion in the UK – and this confidence in the country shows no sign of abating despite the uncertainty of Brexit.
What makes the UK such a go-to investment destination for American companies? Essentially, a happy juxtaposition of the old and the new: world class excellence in traditional areas such as the law, finance and professional services, combined with a huge potential in areas such as fintech and artificial intelligence.
Respect for the rules and a creative dynamism – plus a business-friendly language and time zone – helps explain why the UK is rated as the easiest place to do business in Europe.
A robust and open regulatory framework provides investors with contractual and legal certainty, yet places fewer restrictions on commerce than any of its European neighbours. Equally, investors are met by the lowest tax rate in the G7– and the largest network of double tax treaties in the world. Tax decision-makers polled in KPMG’s 2018 tax competitiveness survey ranked the UK as the second most attractive location to place foreign direct investment – closing the gap on Ireland.
Then there’s the access to finance that London provides. As one of the leading international centres for private equity investment, it also has the third largest stock exchange in the world: a truly global investor base in UK capital markets.
Inevitably, there are question marks about the disruption Brexit might bring to this well-oiled ecosystem – but the fundamental factors which have made London the pre-eminent global banking financial centre are likely to remain in place.
And UK finance is about much more than the Square Mile. ‘Silicon Roundabout’, centred on London’s Old Street district, is now one of the largest start-up clusters in the world – and the leading Fintech centre, worth around £20 billion a year.
The UK also has a robust intellectual property system that has made it a test bed for the world’s innovators: international organisations own 41.5% of patents in the UK. In Germany the equivalent figure is 17.4%.
With this spirit burning bright it is no surprise that the UK is now Europe’s leading venture capital funding centre. Over the last year, London-based firms alone raised more funds than Germany, France, Sweden and the Netherlands combined.
London, of course, is a one off with its unrivalled access to finance, talent, education, innovation, culture and connectivity. Alongside New York, it is the only city ranked as Alpha ++ by the Globalization and World Cities Research Network.
Yet the UK is about so much more than its capital. Major cities across the United Kingdom such as Birmingham, Manchester, Liverpool, Leeds, Glasgow and Edinburgh have found a renewed vigour and confidence. Initiatives such as the ‘Northern Powerhouse’ are delivering increased investment in skills, innovation, transport and culture and seeing significant decisions passed down to the local level.
With these attractions it is no surprise the UK ranks first among major European economies in attracting international talent. Forty percent of the capital’s workforce were born overseas and, underlining its reputation as a skills economy, it has a higher proportion of workers with professional qualifications than any other major economy in Europe.
The UK now has more individual businesses than at any time in its history, and even as the country moves to reshape its relationship with Europe, the entrepreneurial energy across the UK is palpable.
As the nation looks to further broaden its business links beyond Europe, US companies are sure to receive a welcome that is warmer than ever.
A unique role in business between the US and UK
KPMG has a permanent UK-operated presence in the United States. KPMG UK (Americas) Inc. provides advice and services to US companies with a presence in the UK, or those looking to establish one there.
Staffed entirely by UK principals and professionals working with US firm client service teams and specialists back in the UK, we can provide on-the-ground support so US companies can navigate the UK business environment and to capitalise on its opportunities.
To find out more please contact firstname.lastname@example.org
 Center for Transatlantic Relations & AmCham EU, Transatlantic Economy 2017,
 World Bank 2015
 EY ‘Landscaping UK Fintech’ – UK Gov Innovation Survey 2015
 Pitchbook, December 2017
 Globalization and World Cities Research Network
 City of London Corporation & LSE
 International Labour Organisation 2017
 House of Commons Library, Business Statistics, December 2017