More than $1 trillion is pumped around the world in foreign direct investment each year, a country’s share of which is sometimes thought to signify its value and potential to the world.
Investors are drawn to what they don’t have. The things that make a country unique — its people, environment, relationships, framework and teachings — create four distinct factors identified in a report by the World Bank Group that motivate an individual or corporation to invest in that country: natural resources, markets, efficiency and strategic assets like technologies or brands.
The 2016 Best Countries rankings, conducted in partnership with brand strategy firm BAV Consulting and the Wharton School of the University of Pennsylvania, asked more than 16,000 survey participants from four regions to associate countries with specific attributes. The Best Countries to Invest In are ranked based on scores primarily from more than 4,000 business decision makers on a compilation of eight equally weighted country attributes: corrupt, dynamic, economically stable, entrepreneurial, favorable tax environment, innovative, skilled labor force and technological expertise.
Countries at the top of the list, like No. 1 India and No. 5 Ireland, typically have a younger, educated population. The majority of their citizens can provide the type of skilled work that the labor market demands at competitive wages and continue the cycle by contributing to the country’s consumer market.
The Top 5 Countries to Invest In
No. 5: Ireland
Business decision makers viewed Ireland’s tax environment as one of the best in the world, scoring right below Luxembourg and Panama in survey results. Its corporate tax rate of 12.5 percent is nearly a dozen percentage points lower than the global average and altogether waived for new businesses in their first three years.
No. 4: Indonesia
Indonesia has the largest economy of southeast Asia and is one of the richest nations in the world, largely because of petroleum and its other abundant natural resources. To enhance competitiveness, the Indonesia Investment Coordinating Board has named industry as one of five priority sectors to develop. Infrastructure topped the list, reflecting an ongoing struggle across the nation’s thousands of islands. E-commerce is booming, but online businesses with inventory or direct sales are closed to foreign investors.
No. 3: Vietnam
The cheap labor that once made China an outsourcing utopia got a pay raise. In Vietnam, the minimum wage is rising, but remains one of the lowest in the region. Coupled with low barriers to construction and credit, the nation is primed for manufacturing. A recently relaxed law now allows foreigners to own more than 50 percent of most companies and properties.
No. 2: Singapore
Singapore’s Economic Development Board positions the nation as an intellectual hotbed, ripe with educated citizens and intellectual property law. Various incentives are offered to businesses and individuals with plans of betterment, from land use optimization to technology innovation. Though small, the country is home to one of the region’s highest concentrations of expats and can be a comfortable launching pad into the broader attraction of the Asian region.
No. 1: India
Recent fiscal policy reforms have stabilized and strengthened the rupee and India’s rapidly growing economy. On the heels of the launch of Make in India, a federal campaign to promote investment, the country surpassed China to become the top recipient of foreign direct investment in 2015. The initiative focuses on 25 sectors, including pharmaceuticals and railways, most of which permit 100 percent foreign investment.
Want to Know More?
Click to see the full list of Best Countries to Invest In, or visit the U.S. News Best Countries homepage to find news and more rankings. The 2016 Best Countries report and rankings were formed in partnership with brand strategy firm BAV Consulting and The Wharton School of The University of Pennsylvania.
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Best Countries to Invest In originally appeared on usnews.com
