Some weeks back, I talked about the UK being the best place in the EU to set up business.  My principal comparable was Denmark, because these two nations are the only EU members neither in, nor committed to joining, the Euro.

It seems the great and good agree.  The World Economic Forum has recently published its Global Competitive Index for 2012-13, in which the UK was ranked 8^th, with Denmark ranked 12^th – a swing from last year where Denmark was 8^th and the UK 12^th.

Ranked above the UK are three non-EU states (Switzerland – 1^st, Singapore – 2^nd , USA -7^th ), and four EU member states, Finland, Sweden, Netherlands and Germany.  With the exception of Sweden, yet to join but committed to do so, all members of the Eurozone.

Given significant concerns about the viability of the Euro, and the inevitable but unmeasurable fall-out on continuing EZ member countries should any Eurozone country leave, that effectively places the UK as the best place to establish  if one wants to tap into the EU market.

The UK scored particularly strongly on labour market efficiency, business sophistication and business innovation.  It also ranked first for legal rights.  It’s no surprise the UK’s principal weaknesses relate to the size of government debt and budget deficit, and the sheer scale of imports.

One statistic did surprise me  – according to the report it takes 13 days to set up in business here.  Nothing like that long if you do it through us!

A little over 330 million people live in the Eurozone, a further 170 million within the EU but outside the zone. GDP per capita of Eurozone countries is marginally greater than that of EU citizens outside the zone, but the range covered by each is enormous.

Within the zone, the lowest GDP per capita of a member state (Estonia) is just 48% of the highest (Netherlands) [ignoring Luxembourg – a country with a population of just over 1/2 million, with per capita GDP over double that of the Netherlands]. Interestingly, the best estimate for per capita GDP for Greece puts it at 68% of the Netherlands – not great, but there are several worse.

Outside the zone the range is far wider – Bulgaria’s per capita GDP is only 35% of Denmark’s.

We are all too aware of the fundamental faultlines within the zone, caused by debt-fuelled expansion facilitated only by association with the economic powerhouse of Germany. The devaluation option open to most struggling nation states doesn’t exist, and without fiscal transfers from wealthy states to poor, there appears to be no end in sight to the downward spiral over-indebted Eurozone nations will suffer. Rather than economic convergence, the reverse is happening – Germany’s economy continues to grow a’pace, as it benefits from an exchange rate far below that which would apply were it still using the Deutschmark.

So why does this make the UK the ideal gateway to what remains a huge marketplace?

Within the EU, there are just two countries that aren’t committed by treaty obligations to ever joining the Euro – Denmark and the UK. Both retain sovereignty over their currencies, enabling each to react flexibly to changing market conditions. Those are huge ticks in the box for any inward investment. Both have highly educated workforces, stable political systems and robust legal systems.

Denmark scores over the UK in some respects – for example, its GDP per capita is greater, its indiginous population is multi-lingual – but it loses out in many more. It’s smaller by far, and its transport links are more constrained. More importantly, the minimum Share Capital requirement for a Danish private company is €10,000 and VAT registration is compulsory regardless of turnover levels. It has a light-touch employment regime with lower employer social security contribution rates than in the UK, but typically on higher salaries. Employee representation on the Board is obligatory for all but the smallest companies.

The UK’s great strength is its internationalism. London in particular is home to representatives of almost every nationality in the world. It is the world’s most highly developed financial centre, and is regarded by many as the safe haven in uncertain times. And setting up business in the UK is quick and cheap. With no minimum share capital requirement other than the issue of 1 share that needn’t cost as much as £1 and no compulsory VAT registration until certain turnover thresholds are breached, access to the EU market place coundn’t be simpler.