The dramatic terrorist attack in Nice on July 14th and the coup in Turkey the day after made it clear once again that we live in a dangerous, imprevisible and dangerous world. All the recent events show also once again that companies have to take into account a lot of uncertainty. “The Black Swan” - https://en.wikipedia.org/wiki/The_Black_Swan_(Taleb_book)- has become a reality. In order to be at least a little bit prepared to the threats of “the black swan”, companies from all countries in which there is a lot of political instability, can assure a presence in Brussels via a registered office address. At the same time, in stead of going to Turkey to do business with Turkish business partners, this is easier to do from a Brussels registered office.
Instability is bad for business
If there is one thing that business leaders and entrepreneurs hate, then it is instability in the macro-economical environment. Businesses operate according to forecasts and scenarios about the future that comprise surprises as well as certainties. However, as much as businesses factor in uncertainty, the one thing that they want to avoid at all costs is the instability in the macro environment that results from political gridlock, extremism, and political dysfunction. This is the reason why many emerging markets in Asia and Africa either attract or repel foreign investors. For instance, until recently Asian countries were avoided by businesses because of the political uncertainty due to frequent regime changes and even coups. The same will happen now with Turkey.
Why Businesses Like a Stable Macro Environment
The reasons for businesses favoring political stability is that once they get the permits and the licenses to operate in regions and states, they invest a lot of money in setting up facilities. Further, even during the process of acquiring land and other assets, they need the cooperation of the government to facilitate the same. Apart from this, political instability hurts them as their employees are often forced to skip work because of strikes and other protests and this impacts the profits of the businesses negatively. Moreover, businesses like a region that is friendly and welcoming them and not a hostile and unfriendly dispensation. The point here is that political instability hurts everything from profits to operations to the working conditions of the employees and hence, businesses avoid it. The other aspect about political instability is that key laws and regulations are often stuck in the legislatures and the parliaments and key approvals are mired in bureaucratic delays. All these factors conspire to create a situation that is not conducive for businesses. Finally, it is indeed the case that capital is country blind and region blind and migrates and flows to wherever it is welcome and wherever the macro situation is conducive.
But with the growing political instability in countries like Turkey, and the growing uncertainty in other countries like the UK, Spain and Italy, the need to have a presence in the European capital has never beens so clear. And HDS of course is more then ready to help all those businesses who are preparing a “plan B” against the Black Swans of our times.