In the challenging climate of Brexit negotiations, targeted long-term investment choices might offer the security for businesses mitigating financial uncertainty. Foreign direct investments (FDI) have fared well according to the Ernst and Young (EY) report for 2018.

Financial Conduct Authority regulatory changes may impact on Scotland’s attractiveness to foreign direct investment

Leading in attractiveness ahead of the UK average, Scotland expanded on foreign direct investment particularly in the Research and Development sector over 2017. However, firms must keep alert to the regulatory requirements of foreign investors in light of changes over Brexit.

The Financial Conduct Authority (FCA) highlights measures for operators applying to become a recognised overseas investment exchange (ROIE), in case existing regulation under the Markets in Financial Instruments Directive (MiFID) II serving the EEA financial market ceases to be recognised post-Brexit. This may directly impact the likelihood of securing a favourable deal with foreign investors in securing the liquidity of the business.

Ernst and Young Scotland Attractiveness Survey 2018

Nevertheless, the EY survey highlights positive potential for Scotland in the year ahead, summarising their findings with:

  • A new record for FDI projects in 2017 for the third consecutive year with an increase of 7% compared to 2016;
  • Scotland secures its position as the most attractive location in the UK for R&D projects for a second consecutive year with an increase of 70% compared with 2016;
  • The digital sector experienced a 56% increase in FDI projects and was the second largest sector to attract investment into Scotland behind business services;
  • Manufacturing activity experienced a 25% increase of FDI in 2017 compared to 2016;
  • 2nd place ranking, behind London, as the most attractive place to invest in the UK; and,
  • FDI job creation increased by 104%, from 3,131 to 6,374.

Effective risk management and business review can support the best-suited investment portfolio to steer your business through hard times.

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