According to new research from TMF Group in association with Forbes Insights, over half (51.6%) of US-based multinationals still see the established markets of Western Europe as central to their corporate investment and growth plans.

The study, 'Venture Further: what drives international expansion and investment by US businesses?', canvassed the views of 250 US-based C-Suite Executives to explore the motivations and challenges of US-headquartered multinationals in taking their organization into a new international market. Respondents were drawn from a wide selection of industries and from organizations with annual revenues ranging in size from $250 million to over $5 billion. Respondents were asked into what regions their organizations had invested in the last two years, as well as where they planned to invest in 2017/18.

Key findings included:

  • Despite global FDI downturn, over half (51.6%) of US-based multinationals plan to invest in Western Europe over the next two years
  • 1 in 4 investors are looking for new talent or sources of capital
  • 1 in 3 stress the importance of thorough research and local market knowledge

Commenting on the findings Juraj Gerzeni, Regional Head of EMEA for TMF Group, said: "It's heartening to see that, despite global downturns in investment, US businesses still recognize the value and stability of Europe's larger, developed economies.

" Germany is not only the world's fourth largest economy it is also the world's third largest exporter and offers attractive incentives to investors. France too is home to nearly 40 of the world's 500 largest companies, including insurance, airline, cosmetic, luxury and energy firms.

He continued: "The United Kingdom and Ireland also remain attractive to US investors. Both rank in the top 10 of Forbes' Magazine's 'Best Countries for the Business 2017' and, according to the World Bank, the UK is the easiest place to establish and run a business in Europe."

In addition, the survey investigated what motivated US-businesses to explore new foreign markets and what challenges they had faced. It also asked respondents what one piece of advice they would give to a peer considering international expansion.

Alongside expanding operations and increasing market share, findings showed that respondents were looking also to find new talent and skills and new sources of capital. They also faced similar challenges in selecting and establishing a new entity, including the establishment of financial processes and compliance with local regulation.

Gerzeni concluded: "The importance of local knowledge when entering a new market – even a large, developed one - cannot be underestimated. Whether you are looking to extend or enhance existing operations or looking for new opportunities, it is important to fully understand the local complexities of any given market to make sure your operations are – and remain – fully compliant with what could be a rapidly changing regulatory landscape."

To find out more about TMF Group and to download the full report: tmf-group.com/venturefurther

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