London is considered the leading financial center. The largest number of transactions in the global financial market takes place in London, which accounts for 37% of the world's foreign exchange turnover. The City of London accounts for 70% of world trade in international bonds, 39% of OTC derivatives trading, about 50% of world trade in foreign stocks, 16% of the international bank lending market and approximately 90% of world trade in non-ferrous metals (Business Guide UK).
About 70% of international companies are headquartered in the UK. The UK is the leading European and third world insurance market. All these achievements are possible due to many factors but one of the most important is that the UK government pays special attention to creating a positive business reputation and a favorable business environment aimed at attracting international companies to the country - what is usually called an investment policy. So it is useful to explore some details of how the British policy in this regard is formulated and implemented..
The key factor driving the investment policy of the UK government is the high level of competition in the global capital markets. In this regard, measures to systematically reduce the corporate income tax rate – tax rate was reduced from 28% in 2010 to 20% from April 1, 2015; from April 1, 2017, the rate at 19%, as well as work to reduce bureaucratic pressure on business, are aimed at increasing the country's attractiveness for foreign investors.
Improving the investment climate in the country is also focused on the campaign to create a positive "global
reputation" for the UK, which is positioned as an ideal place for doing business, headquarters, research and
innovation divisions of large international companies, as well as for investments. The key benefits of the UK
as a business location are:
- an extensive domestic market;
- favorable business environment;
- competitive taxation system;
- an effective system of law recognized all over the world;
- flexible and effective labor legislation;
- developed scientific and technical base;
- availability of funding;
- a high level of protection of intellectual property and others.
In addition, the government is taking steps to simplify business registration procedures aimed at attracting more entrepreneurs and companies to the country. The time for registering a company in the UK has been reduced to an average of 48 hours, and the full process of setting up a new business takes up to 13 days (World Bank).
In order to increase the investment attractiveness of the national economy, the British government is implementing various marketing strategies. The most ambitious and large-scale project of the government in this area is the international campaign "The GREAT Britain Campaign", launched in 2012 and designed for 15-20 years. It is aimed at developing tourism and education, attracting investment and promoting national exports.
Currently, the Campaign is being implemented in more than 140 countries around the world through British embassies and trade missions using a specially prepared database of universal marketing materials. The Campaign involves four UK government agencies and organizations: Visit Britain (for tourism), DIT (export development and investment attraction), British Council (education) and the UK Foreign Office (for general promotion of the Campaign through British Embassies abroad).
The largest British companies, including British Airways, Burberry, Virgin, Jaguar, Aston Martin and others, as well as well-known representatives of British business, science, art, sports and show business are involved in the implementation of the Campaign around the world. A significant role in attracting foreign capital to the UK is played by the UK bilateral agreements with other countries to promote trade and investment.
UK Foreign Direct Investment (FDI) fell by GBP 2.769 million (USD 3.85 billion) in the fourth quarter 2021. Bank of England predicts continued fall in the near future (second quarter 2021) (Bank of England, UK Office for National Statistics). Despite this the country can build on and continue to develop its strengths.