Going global? 3 countries ripe for growing your recruitment firm abroad…

Germany

With the largest economy in Europe and labour costs currently at 31.4 Euros per hour, Germany could be considered an affordable place to do business. In fact, its labour costs sit roughly in the middle of the European spectrum.

In terms of growth, Germany’s gross domestic product (GDP) is expected to hit 1.7% in 2015, before rising to 1.8% (2016) and 1.5% (2017), figures from Bundesbank. The European Central Bank has also published research that suggests access to finance for SMEs is improving.

The German government has long encouraged competition and the Unfair Competition Act aims to ensure smaller businesses have a chance against the big players. In general the regulatory environment is favorable for oversees businesses.

However, there are some areas where businesses should show caution. There isn’t a legal framework, so some lenders have issued dual-recourse bonds backed on SME loans. Inflation is also anticipated to increase because of euro depreciation, rising 0.5% (2015) to 1.8% (2016) and then 2.2% (2017).

Overall, Germany provides a stable economy for companies looking to expand which, as the EU strengthens, will too continue to attract international business.

The United States

Not only does the US have a strong consumer market, it is something of a safe haven in the current economic environment. The World Bank predicts that GDP will increase by 2.8% (2016) and slow slightly to 2.4% (2017).

Wage growth is rising at the slowest pace in three decades, which in turn is keeping interest rates down. Though this may well change in the future, it means for those able to act fast in investing in the US, current conditions make it financially advantageous.

The interplay between state and federal law has historically been a regulatory challenge for those expanding to the US, and with a 2016 presidential election looming short-term regulatory uncertainty is likely to continue.

Access to finance has improved since the recessionary years and there are new sources, such as online micro and small business lenders for those looking to raise funds.

However, issues still remain, not least the introduction of BASEL III which could worsen access to finance and small businesses could be overlooked by their larger counterparts when it comes to bank lending.

Despite a question mark around access to finance, the top four global locations for start-ups are all in the US, according to Compass’ ‘2015 Global Startup Ecosystem Ranking’. Based on factors including, founder profiles, female to male ratios, seed funding, exit growth and startup density, these are Silicon Valley, New York City, Los Angeles and Boston, with Chicago (7th) and Seattle (8th) close behind.

Hong Kong

Hong Kong is home to over 320,000 SMEs and could be an ideal nation for companies looking to break into the ASEAN countries and the Chinese market. While growth is slowing and is to fall to around 1% next year (according to UBS Group AG), many initiatives exist to ensure SMEs to thrive, which is unsurprising given they account for 98% of all businesses in Hong Kong. Initiatives include the Support Consultation Centre for SMEs and SME funding schemes such as the SME Loan Guarantee Scheme, helping SMEs access to finance, a common problems for SMEs across ASEAN nations (which includes Indonesia, Malaysia, Philippines, Singapore and Thailand).

GDP in 2014 was 52551.60 US dollars, which is the equivalent to 296% of the world’s average when adjusted for purchasing power parity. Hong Kong is also legally friendly for organisations, ensuring a free market, competitive economy. Contracts are enforced through the court system and there are minimal legal hoops to jump through when it comes to setting up a business.