London & Partners, the Mayor of London’s official promotion agency, is committed to proving that the UK capital is, and always will be, open for business, despite concerns over the effects of Brexit. And it is such efforts that have helped the city secure the number one spot on the FDI Strategy category for major cities in Europe.
Since 2011-12, the organisation has assisted more than 2000 overseas companies in setting up or expanding, creating more than 37,600 jobs, and generating £831m ($1.08bn) in gross value added for the city’s economy. It has employees across offices from Beijing to Toronto and is focused on four core sectors: financial business services and technology; urban and regeneration; innovation and life sciences; and creative industries.
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The agency works to maximise London’s pro-business climate by implementing several initiatives. These include the Tier 1 Entrepreneur visa route, which allows eligible applicants to set up or invest in an existing business in the UK; enterprise investment schemes and venture capital trusts, which offer 30% tax relief on investments of up to £1m and £200,000, respectively; and the Royal Docks Enterprise Zone, which allows businesses that set up there to access business rate relief, enhanced capital allowances, simplified planning and discounted high-performance broadband.
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At 19%, London’s corporation tax rate is already the lowest in the G20 – and this figure will fall to 17% later in 2020. Additionally, London & Partners works to boost the city’s reputation through a comprehensive digital marketing campaign, which includes a business newsletter distributed to more than 3000 FDI contacts weekly; and London’s Good News Room, an initiative launched in 2019 to share positive news, intelligence and information on events in London through a WhatsApp broadcast list, which has since developed into a community of more than 1000 global decision-makers and influencers.
Glasgow, Scotland's most populous city, ranks first out of all large European cities for FDI Strategy. Invest Glasgow (IG), the city’s dedicated investment promotion agency, sits within the council’s economic development department and operates with a £500,000 annual budget and 4.5 full-time equivalent staff.
In line with Glasgow’s strategic vision to become the UK’s best performing city for inward investment by 2023, IG focuses on targeted overseas markets as well as developing sector propositions and a portfolio of major market-ready projects. In 2019, the agency staged the first Glasgow Real Estate Showcase to promote the city’s capital investment opportunities. Following its success, the event will now be held annually.
Glasgow was also ranked second-best UK Tech City in US real estate group CBRE’s 2019 Tech Cities Report. The Digital Glasgow strategy supports the digital economy through initiatives such as the Tontine accelerator, which provides flexible workspace, dedicated support and a bespoke accelerator programme to high-growth technology, design and creative companies. In addition, the city’s three innovation districts – Glasgow City Innovation District, Glasgow Riverside Innovation District and Advanced Manufacturing Innovation District Scotland – aim to stimulate growth and expand the business base of leading-edge firms using advanced technologies to enhance productivity.
Other incentives and initiatives include regional selective assistance, a discretionary grant scheme that offers new companies to the city a grant for up to 30% of total project costs, and the Glasgow Guarantee, the council’s £50m flagship employability programme, which has secured employment and training for over 9000 young people at more than 200 businesses since 2009.
Vilnius goes places
Lithuania’s capital, Vilnius, tops the mid-sized category for FDI Strategy. Go Vilnius, the city’s official development agency, offers a wide range of staff training in areas including foreign language proficiency, IT skills and project management. In 2019, the agency implemented a new system to measure its performance, comparing Vilnius with five competitor cities and identifying its strengths and areas for improvement.
The city’s top five growth sectors are ICT, specialising in blockchain and game development; electronics and laser manufacturing; biotechnology; finance, with a focus on fintech; and global business services. Current priority initiatives include relocation support for investors, systematic aftercare for companies, improvements to the migration process, enhancements to the city’s connectivity, the expansion of hi-tech manufacturing infrastructure, and support for the fintech and proptech sectors.
A range of incentives are also available including tax incentives, financial support for employee training and a reduced corporate income tax rate of 5% for profits deriving from the commercial exploitation of patented inventions. Vilnius City Municipality is currently in the final stages of renewing its Vilnius City Master Plan. Several major infrastructure projects are already under way, with four areas undergoing a radical transformation. Developments include a start-up campus, recreational and cultural amenities and a modern, multifunctional business and mobility centre.
Highly rated Reykjavik
Reykjavik, the capital and largest city of Iceland, has been judged the best small European city for FDI Strategy. The City of Reykjavik has a team of four staff focused on inward investment. The city is renowned for its approach towards sustainability, with 99% of all electricity in Iceland generated from green, renewable energy. Reykjavik is also home to a burgeoning life sciences sector backed by strong government support, an impressive academic network, an advanced healthcare system and the country’s natural energy resources.
The City of Reykjavik is actively working with Invest in Iceland to find strategic bolt-on partners to the current biotech ecosystem. Reykjavik Science City is located next to Reykjavik's central business district and consists of the University of Iceland, the National University Hospital of Iceland and the University of Reykjavik. The science park also includes Reykjavik domestic airport, which connects the park with rural Iceland, Greenland and the Faroe Islands.
In addition, the City of Reykjavik is working with Invest in Iceland and key industry stakeholders to attract data centres by participating in industry exhibitions, one-on-one meetings and creating locations within city limits with strong energy and data connectivity. The city is introducing a new municipal plan focused on densification and redevelopment of brownfield areas. Upcoming infrastructure developments include a new bus rapid transport line, a central retail complex, a university hospital treatment centre, a national stadium and a transit hub.
Galway, a harbour city on Ireland’s west coast, has been awarded the top prize for FDI Strategy in the micro cities classification. Galway City Council has a dedicated three-person economic development unit, in addition to the Galway Local Enterprise Office, which houses a further five staff supporting start-up indigenous businesses through microfinance and mentoring.
Galway is recognised as a one of the top five global hubs in the medical technology sector, with companies including Boston Scientific, Medtronic, Covidien, Merit Medical and Allergan establishing a presence in the city. The Regenerative Medicine Institute was established in collaboration with NUI Galway in 2004 and has received €47m in grants for pioneering research initiatives for 36 research projects involving more than 200 researchers.
The city is also home to 90 ICT companies, including Hewlett Packard, IBM, Oracle, Avaya, Nortel, Cisco, SAP, EA and Fidelity. Four of the world’s top five ICT companies have a base in Galway. The city’s Insight Centre for Data Analytics is a joint initiative between researchers at Dublin City University, NUI Galway, UCC, UCD and other partner institutions. It brings together more than 400 researchers, over €100m in funding, and more than 80 industry partners, to position Ireland at the heart of global data analytics research.
Galway is also famously creative, hosting events such as the Galway Arts Festival, and has been named the European Capital of Culture for 2020. The Irish Development Agency (IDA) supports inward investors wishing to invest significantly in Galway through property and land acquisitions, the management of industrial parks and tax relief. Funding and grants are also available to those considering FDI in Ireland, which are negotiated on a case-by-case basis in compliance with EU and Irish legislation.