Why invest in Europe in 2024?

With the daily diet of negative headlines, multinationals would be forgiven for overlooking the recovering EU markets. This is why entrepreneurs should not rule out setting up a new company in Europe:

1. Appropriately 25% of global wealth is found in Europe, this is why the continent houses the biggest consumer market in the world. Did you know in 2012, EU consumption was $16.1 trillion, 30% larger than China’s and nearly 3.5 times larger than India’s consumer market;
2. Despite being labeled “the sick man”, Europe is an economic behemoth of 27 Member States. The EU boasts the largest annual output (US$16.6 trillion), annual imports (US$2.4 trillion) and annual exports (US$2.3 trillion) in the world. While the internal market for services is still the largest in the world, estimated at $4 trillion by the World Bank;
3. Europe offers low cost manufacturing in Hungary, Poland and Romania. This is why 12% of corporate America’s European workforce is based in Eastern Europe;
4. Europe is well endowed with an oversupply of skilled labor force, and well-developed technological and innovative clusters;
5. European companies account for roughly 25% of total global R&D, this is why Europe remains a leader in a number of cutting edge industries including life sciences, agriculture and food production, automotive, aerospace, nanotechnology, energy, and information and communications;
6. Despite the blizzard of negative EU news, multinationals use Europe as a springboard to serve neighboring markets including Middle East, Eastern Europe and North Africa. Annual goods imported by these peripheral countries is $2.8 trillion, more than annual United States imports. Did you know total EU-Turkey trade expanded 247% between 2000 and 2011? Trade with Nigeria and its exploding middle class jumped 327% between 2000 and 2011;
7. Peripheral countries prefer doing business with EU because of i) geography ii) historical trading ties iii) cross border financial support and iv) specific EU policies facilitating trade and investment into Africa and Middle East. Consequently, multinationals rely on their European subsidiaries to penetrate these markets. Thus, Europe easily remains the most important foreign market in the world for Corporate America;
8. Europe scores highest in ease of doing business including i) high standard industry regulations and property rights ii) the ability to obtain credit iii) regulations governing employment iv) trade contract enforcement and v) cross border trading rules;
9. E-commerce is underdeveloped in Europe, a mere 4% of EU goods and services sold via the web. Only 10 percent of global e-book sales occur in Europe versus the U.S. share of roughly 80 percent. Europe is a buffet for international ecommerce entrepreneurs;
10. By 2016, there will be a comprehensive free trade agreement between the United States and the European Union, further fusing the world’s two largest economies. Benefits include lower product costs and prices and greater consumer demand. Lower product costs will occur with the i) elimination of intercontinental tariffs ii) harmonizing food and drug safety standards iii) equalizing e-commerce protocols and data privacy issues iv) standardizing product labeling and packaging. The transatlantic economy, the largest commercial artery in the world, will be reinvigorated, which is why entrepreneurs should consider forming a company in Europe;
11. There are many industrial free zones in Europe offering tax exemption to international investors including i) Liverpool Free Port in UK ii) Le Verdon Free Zone in France iii) Duisburg Free Port in Germany iv) Bourgas Free Zone in Bulgaria and v) Free Zone Graddo in Czech Republic;
12. A Euro zone break up will occur if i) Italy needs to be bailed out or ii) if the free flow of immigrants continues to be a huge annual national cost burden;
13. The Europe’s economy is relatively well-established with many reputable jurisdictions such as The United Kingdom, Belgium, France, and Germany. Since 2012, Europe has witnessed a positive recover from the financial crisis with Germany and The United Kingdom being the leaders;
14. For example, within one month from May-June 2013, the industrial production of Germany has increased by 2.4% boosting the overall outlook of the euro zone’s economy. In addition, British GDP has increased at 0.7% in the second quarter of 2013;
15. Furthermore, with tax-efficient jurisdictions like Guernsey, Isle of Man, and Jersey, investors can minimize business costs and avoid taxation hurdles;
16. If your Firm is ready for the return of business in Europe, contact us today.