Euro Exim Bank

Scotland says “Yes” to Investment

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In September, with the curious eyes of the world on it, Scotland voted against ending its 307-year-old union with England and Wales. Many business leaders had come out against Scottish independence in advance of the referendum, highlighting the economic risks of secession. Heads of major corporations joined forces with the bosses of smaller firms within Scotland’s whisky and fishing industries to sign a letter calling for the United Kingdom to stay together. The potential implications of independence are all irrelevant for now anyway, and it’s business as usual in Scotland.

Remaining within the UK means that Scotland is still part of an economy that is one of the most competitive in the world due to its benevolent business environment and labour market flexibility. The UK’s declining corporation tax rate also makes it attractive to investors and its foreign direct investment (FDI) inflows amounted to the second largest share of the EU’s total in 2013. Austerity measures have hit education spending, but high tertiary education attainment creates a well-educated workforce. alt

Within the union, Scotland is succeeding in attracting more than its fair share of foreign investment. Last year, FDI in Scotland reached its highest level since 1997, creating over 4,000 jobs. According to a recent Ernst & Young Attractiveness Survey, Scotland attracted 82 FDI projects in 2013, 8% more than in 2012, creating a total of 4,165 jobs. Scotland continues to be the top location for FDI projects outside of London.

The survey found that FDI projects in the software sector increased by 300% in 2013 over the previous year, accounting for 22% of total projects and eclipsing business services and machinery and equipment to reach first place. The US remains Scotland’s top source of inward investment, accounting for 39.5% of projects. The Ernst & Young report highlighted the opportunity to boost investment in 2014, with Scotland’s increased profile, the Commonwealth Games, and the Ryder Cup creating what it called a “halo effect”.

Scotland has long been a hot bed of invention, exploration and discovery. It has the largest concentration of universities in Europe, with at least four in the world’s top 200. It does more research per head of population than anywhere else and is, unsurprisingly, the top location for R&D in the UK. With a range of tax credits and funding available, Scotland is the natural home for innovative companies.

Scotland has an already competitive corporation tax of 23% that will fall even further to 20% in 2015. There are tax breaks for R&D projects, as well as a further low-tax scheme for profits on new patents. It takes just 48 hours to register a company and typically two weeks to get an enterprise up and running. It is up to 30% cheaper to locate in Scotland than in other parts of the UK, and Scotland has more business angel investment per head of population than any other country in Europe. alt

Scotland has several key sectors ripe for investment. Its enduring strength in advanced engineering, as well as its experienced skills base and a competitive cost structure has built an industry worth almost £6 billion. From maintaining new generations of aircraft to pioneering new ways of forming advanced metal materials, to developing the latest space and aeronautical defence technologies, Scotland is at the forefront of the sector.

Scotland has a long history in the financial services industry. Its financial services heritage combines with a fantastic workforce, modern infrastructure and great connections to make investing in Scotland the natural choice for international financial services companies. That’s why firms such as Deutsche Bank, BNP Paribas, Tesco Bank, Santander, JP Morgan already call Scotland home and continue to invest there.

Investing in Scotland means investing in 40 years of experience and innovation that have made the oil & gas industry famous around the world. Today, Scotland is working to maximise the future of the industry by supporting recovery of North Sea reserves, encouraging Scottish firms to think globally and helping investors make the most of Scotland’s expertise.

Scotland’s economy retains its traditional strengths in oil & gas and finance, but these are now supported by world-leading renewable energy and life sciences sectors. An investment in Scotland means access to a strong supply chain, a skilled workforce and pioneering research in medical innovations. A base in Scotland can open doors to collaborations with the NHS, government, industry and academia. From clinical research to commercialisation, Scotland is a home from home to do business in European markets and beyond.

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Scotland is home to more than 2,000 companies in the energy sector, operating in over 100 markets. It also has 45 years’ experience in offshore and subsea technologies, enabling the sector’s diversification into renewable energy. An investment in Scotland’s renewable energy industry means access to a strong supply chain, government investment, a skilled workforce and competitive operational costs.

The creative industries make an important contribution to the Scottish economy, employing 65,200 people. Scotland has world-class companies in all areas of the creative industries, from international leaders in games development and interactive platforms to national broadcasters and successful production companies. Scotland has global centres of research excellence that develop next-generation technologies to support ongoing growth in the digital media environment and a well-developed infrastructure to support company growth.

In terms of lifestyle, life in Scotland is good by any standard. The region is culturally rich, with an enviable standard of living. Commutes are short, schools are excellent and health care is free of charge. Scotland’s history and landscape lure millions of tourists, and the great outdoors is one huge playground, full of possibilities. Cosmopolitan cities are full of life, entertainment and all that is great about a modern European country with a very special, friendly character. Oh, and it’s still in the UK, did we mention that?