Using business climate criteria, new research reveals the Republic of Ireland is the best place to do business in Europe.
In their first edition of the The Best Place to do Business in Europe Index, UK-based foreign exchange company World First conclude Ireland has the best economic climate out of the 28 countries of the European Union.
‘Economic climate,’ in this context, refers to the overall state of the economy, i.e., economic conditions.
Ireland is the best place to do business in Europe according to new research. Image: James Joyce bridge over the River Liffey in Dublin. Credit: pixabay-230311
“A combination of a business friendly tax system, easy access to finance, and strong economic growth places Ireland ahead of Slovakia, Latvia and Malta,” they note.
These criteria echo some of those used by Forbes who put Ireland in 4th place, behind Denmark, New Zealand, and Norway in its Best Countries for Business 2015 index which ranks 144 countries around the world.
Progressive economic policies paying off
Ireland is often given as a good example of an economy that has bounced back from the financial crisis.
Its progressive economic policies have been a magnet for foreign investment. The Irish government has relaxed residency requirements and reduced corporation tax to 12.5 percent.
Big companies – including Microsoft, Google, and Facebook – have established a presence on the Emerald Isle and created thousands of jobs.
Also, with over 92 percent of the population attaining a high school education, Ireland is well above the EU average of 82.7 percent. It sits in third place in the education level ranking, below highest ranked Croatia and Cyprus in second place.
Italy languishes at the bottom of the table in 28th place. A “toxic mix of low economic growth and a pessimistic attitude among private businesses on the availability of funding,” are the main reasons World First give for this ranking.
Ireland’s progressive economic policies have been a magnet for foreign investment. Google is one of the big technology companies attracted – the photo shows a Google workplace in Dublin. Credit: Google
Index based on economic, demographic, and government data
The Best Place to do Business in Europe Index brings together economic and demographic (e.g. Eurostat, World Bank) plus government data from across the EU to identify the countries with the best climate for growing businesses.
The rankings take into account a range of variables, including: GDP growth, VAT, corporation tax, business birth and death ratios, tax breaks for SMEs, business population growth, access to finance, and education levels.
The researchers acquired raw data for each variable and created a scoring system where each country can be compared to the cross-continental average which is set to 100. For example, at 797, Ireland’s GDP growth rate is nearly eight times that of the EU average, whereas at 109, the UK’s GDP growth rate is near that of the EU average.
UK in fifth position – despite Brexit uncertainty
The United Kingdom is ranked as the 5th best place to do business in Europe – well ahead of Spain (10th), France (14th), and Germany (25th).
Edward Hardy, Analyst at World First comments:
“Despite the uncertainty caused by the UK’s vote to leave, it remains one of the best places to do business in Europe which bodes well for a post-Brexit UK.”
The UK is the fastest-growing G7 economy, offering a competitive tax system and access to diverse talent, says Hardy, who adds:
“These key characteristics are what the current government will be keen to highlight when negotiating trade deals post-Brexit as they seek to convince foreign firms that the UK is open for business.”
You can look up individual league tables for seven of the variables on an interactive index web page.