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Global Business Banking in 2025: These Jurisdictions Will Be Favored by Corporates

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Global Business Banking in 2025: These Jurisdictions Will Be Favored by Corporates 1
  • The pandemic has spurred an increase in business formations in the world’s largest economies.
  • The United States, UK, France, Germany, and Japan stand out as being the countries with the biggest number of new businesses.
  • The United States had 1,115,984 business applications in the fourth quarter of 2020 and provides ample opportunities to entrepreneurs.

According to reports, the pandemic has had a surprising effect – there has been a significant increase in new businesses being formed in the world’s strongest economies. There have been immense societal changes, and many entrepreneurs are reacting to it. Furthermore, there have been many lay-offs and, as a result, many individuals have decided to form their own businesses.

These are the countries seeing the most growth

Some of the countries who have witnessed the most new business registrations are the United States, UK, France, Germany, and Japan. The US stands out as seeing the most growth with business formation applications in 2020 up 82% from 2019 in the three months heading up to September.  In the UK, there was also a 30% spike in business corporations in the four weeks leading up to mid-December compared to the same period in 2019.

France saw 84,000 new businesses registered in October 2020 which is a 20% increase from October 2019. This number is the highest that has ever been recorded. Germany also saw increased numbers of business registrations in late 2020 compared to the same period in 2019 – this is despite a big decline in the beginning of the pandemic. In Japan, there were 10,000 new business registrations in September which accounts for 14% more than September 2019.

Of these countries, the US and the UK stand out as being the most popular with new businesses.

Small Business Statistics in the United States

According to the US Small Business Administration, in 2020 there were 31.7 million small businesses in the US with 60.6 million employees. Small businesses accounted for 99.9% of all United States businesses, and 47.1% of all United States employees. The US Census Bureau reports that in the fourth quarter of 2020, there were 1,115,984 business applications.

The Center for American Entrepreneurship reports that San Francisco, San Jose, and Los Angeles are part of the list of the top ten cities which venture capitalists look favorably upon. California especially is well-known as being the state which has the largest number of small businesses. In fact, they have 4.1 million small businesses there. Texas comes in second with 2.8 million small businesses, and Florida comes in close third with 2.7 million. Following Florida, New York has 2.2 million and Illinois has 1.2 million small businesses.

Statistics show that new business registrations in the US are focused on e-commerce, but also information services and logistics. It’s been seen that many of the businesses being formed are created without dependent employees. This surge in new applications can be attributed to the fact that many people lost their jobs and started their own businesses because there weren’t other options.

However, there has still been an increase of new businesses which plan on hiring employees. In fact, that number is also up 52% from 2019. Low interest rates and new consumer needs have opened up novel opportunities for employers and employees.

United Kingdom

Indeed Brexit will have some negative effects, yet the attractiveness of the UK and it’s offshore jurisdictions (BVI and others) remain substantial. The new businesses are being created as a response to a changing world – especially a society which is now socially-distanced. Industries which stand out as being more popular because of this are technology, digital wellness and fitness, and food and drink production. Reports indicate that these new businesses were started as entrepreneurs realised that starting an online business had the potential to be very profitable – startup costs are very low, and online shopping has never been more popular.

This is why it’s a good idea to start a business in the US

According to reports by Guidant Financial, 78% of small businesses in the US are profitable. It is also very easy to start a business in the US – an LLC (Limited Liability Company) can be started in five simple steps. There are very few costs involved, and an LLC offers personal liability protection to its owners, as well as pass-through taxation.

Trends to look out for in 2021 are mostly related to online shopping. The third annual Digital Consumer Study found that 50% of consumers relayed that they did shopping-related activities on their mobile phones within the previous.  three months.

Final take

Guidant Financial reports that 55% of small business owners formed their own company so that they would not have to answer to someone else, and 25% of small business owners started their own business because they were unhappy with corporate America. The next logical question might be – where do all the companies open their bank accounts? As Luigi Wewege, a private banker points out: “Global companies will naturally look at opening bank accounts in multiple jurisdictions to facilitate tax efficiency and ease of business”.

Suggested resource: If you’ve decided to start your own business, it’s a good idea to evaluate several business bank accounts to find the most suitable option.

 

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Huawei 2020 revenue ticks up despite U.S. sanctions, chairman says

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Huawei 2020 revenue ticks up despite U.S. sanctions, chairman says 2

By Josh Horwitz

SHANGHAI (Reuters) – Huawei Technologies saw slight revenue and profit growth in 2020, in line with its expectations, its rotating chairman said on Tuesday, even as Washington toughened sanctions against the Chinese telecom equipment maker.

The company was put on an export blacklist by former U.S. President Donald Trump in 2019 and barred from accessing critical technology of U.S. origin, affecting its ability to design its own chips and source components from outside vendors.

Huawei has repeatedly denied it poses a security risk.

“Huawei was confronted with some extraordinary difficulties last year,” rotating Chairman Ken Hu said at industry event Mobile World Congress Shanghai in the Chinese business hub.

“Operations were relatively stable and in line with our guidance, registering slight growth in revenue and profit.”

This month, founder and Chief Executive Ren Zhengfei said he hoped the Biden administration would “harbour an open policy” towards U.S. firms doing business with Huawei in his first comments to the media in about a year.

China has spent more than 260 billion yuan ($40.27 billion) building its 5G network, an official of the Ministry of Information and Information Technology said on Tuesday.

On Monday, Huawei unveiled its new 5G Mate X2 foldable phone, which makes use of its proprietary Kirin processor.

However, with the cheapest model starting at 17,999 yuan ($2,788), the phone is not positioned to challenge players in the mainstream market.

Huawei set up 50,000 base stations in Indonesia, Hu said, adding that it planned to build 2,000 base stations in remote regions of Ghana.

The company is expected to post full-year results in March, a spokesman said. (This story corrects paragraph 10 to drop reference to 5G)

(Reporting by Josh Horwitz; Writing by David Kirton; Editing by Kim Coghill and Sherry Jacob-Phillips)

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Employee ownership – resilience in a time of uncertainty

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Five things investors and listed companies need to know about the common ownership debate and why it matters

By Stephen Greenwood, Owner of Valloop

White House economist Jared Bernstein is a major advocate for employee ownership, in which employees buy the company they work for. In a recent study, he notes the model’s various benefits, such as how it both improves job quality as well as increasing workers’ wealth and productivity.

As a long-time adviser to President Biden, it’s highly likely Bernstein will be pushing the US Government to encourage more private businesses to transition to employee ownership. Given today’s financial uncertainty, now would seem an opportune time for businesses everywhere to consider the concept, not only for the economic and emotional stability and resilience it can offer to their employees, but also for the positive impact it can have on their bottom line and wider society. In the study, Bernstein references Federal Reserve data which showed that over half of corporate stock was held by the wealthiest one percent of households – conversely, the bottom 50 percent hold just 1 percent of the value of corporate entities. Bernstein emphasises the role employee ownership can play in redressing this imbalance: “ESOPs (Employee shared ownership plans) transfer capital ownership to wage earners, directly reducing extremely high levels of wealth concentration, and ESOP firms appear to have less internal wage dispersion”.

Wide-ranging benefits

As a form of business buy-out, employee ownership offers owners the chance to sell their company or retire but, rather than see their legacy subsumed by a competitor or PLC, it allows them to see it remain a going concern, simultaneously protecting a loyal workforce and the business’ wider community. At Valloop, we take an ethical approach to buy-outs by providing the financial instruments required for SME employees across Europe to buy their businesses via its intelligent buy-out (IBO) frameworks, creating employee co-owned companies driving value and change through greater social inclusion. This ensures a strong financial performance for investors in a way that also benefits society. In the past five years we have seen compound annual growth of more than 15%*.

The benefits of employee ownership have been proven. Underpinned by the simple idea that no business can thrive without its people, an employee ownership structure gives everyone involved a common goal – that of commercial success. Knowing they have a stake in the business, employees feel directly involved in a company’s success and that they will be rewarded for it. Indeed, research shows that the approach leads to a happier workforce: a greater involvement in the decision-making and future direction of a company results in a greater sense of satisfaction and wellbeing.

Its benefits spread beyond a company’s employees too. Companies in which employees have a stake often tend to remain rooted in the community, for example. Not only does this help protect jobs, but it can also give the company a competitive advantage, encouraging local business opportunities, and maintaining legacy company-supplier relationships. What’s more, it’s likely that employees will spend their greater take-home pay within their local communities and transition those who are classed as in-work poverty towards greater financial independence.

Essentially, the community inclusion enabled by employee-owned companies can create better performing businesses while, at the same time, transforming the fabric of society. And in the current climate, this inclusion has never been needed more.

This begs the question of why aren’t there more employee-owned businesses? Arguably, the reason there aren’t more is because the financial products have not existed to enable buyouts like this that benefit all stakeholders – investors, owners and employees. Valloop does that and has democratised access to its Private Markets Fund with the £100k point of entry for investors. By opening the market in this way, employee ownership can be brought into the mainstream.

For greater resilience

Stephen Greenwood

Stephen Greenwood

According to the Employee Ownership Association, “employee-owned businesses achieve higher productivity and greater levels of innovation and are more resilient to economic turbulence.”

By acting in the long-term interest of its workforce, an employee-owned business will tend not to deliver short-term benefits for a select few stakeholders. It will typically enjoy a significantly healthier – and, importantly, stable – bottom line. And, with better informed, more engaged, and more trusting employees, it will be highly resilient to economic changes.

Of course, the impact of COVID-19 means the country is undergoing a level of economic turbulence not seen since the Second World War. With almost one in five UK businesses either temporarily or permanently ceasing to trade by the end of 2020, the need for business resilience has never been more critical – and not just for the businesses themselves.

While a company’s resilience will come from the ability of its employees and processes to adapt to change, a mix of different business types will help make a community more resilient to economic shock, and the assurance of job and financial security will enable workers to better weather the storm. As Deb Oxley OBE, Chief Executive of the Employee Ownership Association explains, now is the time to consider employee ownership: “The Valloop solution launches at a time when the interest in employee ownership is rocketing across the UK SME sector as business owners and their management teams seek alternative ways to secure the future of their businesses. The long-term resilience of businesses and regions is increasingly more relevant as the UK builds back from the pandemic and innovations such as Valloop are very much welcomed by the Employee Ownership Association as a way of ensuring more businesses and their employees are able to experience the benefits of employee ownership, whilst contributing to a more inclusive and sustainable economy.”

This need for resilience is echoed in the US. According to Stephanie Silverman, President and CEO of the Employee-Owned S Corporations of America (ESCA), “as hardworking Americans grapple with staggering economic uncertainty driven by the pandemic, we hope more policymakers in Washington will… encourage private companies to become [employee]-owned, giving more Americans the chance to have financial stability and giving more companies the opportunity to see productivity gains as well.”

For the good of society

The concept of employee ownership is nothing new. The John Lewis Partnership, for example, has been at least partially owned by its employees for over 100 years. It’s the largest of over 370 such businesses in the country which, together, deliver 4 percent of UK GDP each year.

But it has become more relevant in the time of COVID. It matters to society. Not only does it offer owners an alternative to selling to a competitor or overseas buyer but, by creating democratic ownership of a company for all of its employees, it protects jobs, and by keeping the business and its productivity in the region, it protects communities.

Given the wide-ranging benefits of employee-owned companies, the title of Bernstein’s study is apt in this current period of economic uncertainty – “Why aren’t there more?”. The simple answer is that there were not liquidity investors, until now…

* past performance is no guarantee of future results.

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Hyundai Motor to recall Kona EV and other electric vehicles in South Korea

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Hyundai Motor to recall Kona EV and other electric vehicles in South Korea 3

SEOUL (Reuters) – Hyundai Motor Co will recall 26,699 electric vehicles including Kona EVs in South Korea due to potential fire risks, South Korea’s transport ministry said on Wednesday.

The recall will replace the vehicles’ battery systems and applies to 25,083 Kona EVs, starting March 29, the ministry said in a statement.

It is Hyundai’s second recall for the Kona, its best-selling electric vehicle and follows a decision by South Korean authorities this year to launch a probe into whether the previous recall was adequate. The first recall occurred in October after a series of fires but in January one of the recalled vehicles caught fire.

The Kona EV uses batteries manufactured by LG Chem Ltd’s wholly owned battery division LG Energy Solution.

(Reporting by Heekyong Yang and Joyce Lee; Editing by Jacqueline Wong and Edwina Gibbs)

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