The UK has overtaken Germany, China and India to become the most attractive country for investment behind the US for the first time in PwC’s annual UK CEO survey.
The poll showed the UK moved up from the fourth most important destination for investment in 2024, with senior executives also seeing a brighter economic outlook ahead for Britain in 2025.
The PwC survey found that 14 per cent of chief executives from around the world believe the UK will draw the greatest proportion of international investment, behind only the US, with 30 per cent.
They are followed by Germany with 12 per cent, China with 9 per cent and India with 7 per cent in the top five.
PwC described the findings as a “vote of confidence in the UK”, with almost two thirds (61 per cent) of British chief executives optimistic about the country's economic growth prospects in the next 12 months, up from 39 per cent in 2023.
It comes after Chancellor of the Exchequer Rachel Reeves faced mounting questions over flagging UK growth, the impact of her recent Budget measures and rising UK debt levels, with concerns about the pound slumping and government borrowing costs spike sharply this month.
Last week’s weaker-than-expected growth figures, showing a meagre 0.1 per cent expansion in November, heightened fears of a stalling economy.
The recent sell-off in UK government bonds – also known as gilts – has calmed, but experts worry the rout could resume on further disappointing data or unfavourable trade policies from new US President Donald Trump.
“Our CEO survey findings are a vote of confidence in the UK as a place for business and investment,” Marco Amitrano, senior partner of PwC UK, said.
“The UK’s relative stability at a time of instability should not be underestimated, nor should its strength in key sectors including technology.
“However, there is no room for complacency. Reasserting Britain’s place on the global stage requires a tangible path to growth and a consistent government approach to business and investment.”
Ms Reeves, who is this week attending the Word Economic Forum gathering of business and political leaders in Davos, Switzerland, said: “These latest results show global CEOs are backing Britain and the UK is one of the most attractive destinations for international investment.
“And it’s this investment that will help drive economic growth and improve living standards across the UK.”
Despite fears that her Budget measures to increase wage costs for businesses will hit hiring, the survey showed that over half (53 per cent) of UK chief executives plan to increase their workforces this year, up from 48 per cent in 2023.
But longer-term confidence of bosses in their own businesses has been knocked back, with 57 per cent of UK chief executives feeling very positive about their organisation’s prospects over three years, compared with 61 per cent in last year’s survey.
British business leaders are also leading the way in using artificial intelligence (AI) in their firms, with 93 per cent of chief executives saying their firms have now adopted the technology in some way – more than double the 42 per cent in 2023 and higher than the 83 per cent global adoption rate.
But just 36 per cent of UK bosses anticipate AI boosting their profits over the next year, compared with 49 per cent globally, while only 14 per cent of UK chief executives said they saw profit improvements from AI over the past 12 months.
“UK business has begun to move beyond the initial hype of GenAI to the reality of making it work – but that shouldn’t detract from its huge unrealised potential,” Mr Amitrano said.
The survey also revealed that 98 per cent of UK business bosses are planning to make material changes to their business models to stay competitive.
PwC surveyed 4,701 chief executives across 109 countries and territories from October 1 through to November 8, 2024.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
RACECARD
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Global state-owned investor ranking by size
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United States
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China
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UAE
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
What are the main cyber security threats?
Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
Cyber terrorism - Social media platforms are used to spread radical ideologies, misinformation and disinformation, often with the aim of disrupting critical infrastructure such as power grids.
Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
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