UK is leading destination for global HQs

London and south east England attract more investment in multinational headquarters than global cities such as New York, Singapore, Berlin, Hong Kong and Paris, according to a new analysis.

London City St Pauls
In its report, 'Head Office: London's Rise and Future as a Corporate Centre', the Centre for London think-tank says the capital's popularity as a "location of choice" for international head offices has intensified over the last decade.But it warns that, as much of this appeal has its roots in the availability of a skilled workforce, this dominance could be threatened by the government's proposals for a new, post-Brexit immigration system.

London top HQ destination for FDI headquarters

The report, based on an analysis of data collated by fDi Intelligence – a Financial Times company – found that London ranked as the top global destination for foreign direct investment (FDI) in headquarters between 2003-2019, attracting 591 projects.Centre for London also said that, since 2003, the capital and the south east England region had attracted a fifth of Western European investment in new headquarter projects – more than the Paris-centred Ile de France region, Dublin and Amsterdam-Rotterdam combined.Based on data from Deloitte, the report said the biggest multinationals had "overwhelmingly" chosen London and south east England as the base for their European hubs, with the region now hosting 55 per cent of the world’s largest 500 companies’ European HQs.Nicolas Bosetti, research manager at the Centre for London, said, “The location of multinationals’ offices has featured heavily in Brexit debates, but London must avoid the temptation to interpret every headquarters move as a consequence of Brexit.“While many sectors are seeing a slimming down and scattering of their head office functions, London has bucked the trend.

London’s standing as a global city under threat post-Brexit

"The headquarter economy underpins London's standing as a global city, and it is vital that local and national decision-makers remain focused on strengthening the city's offer."Maintaining an openness to immigration, dealing with London’s affordability pressures, improving London’s existing infrastructure and improving skills provision for Londoners are key priorities."The collapse of London's HQ city status would occur in a gradual fashion but its demise would have significant consequences – through the loss of jobs, investment and soft power.”The report said that London's status as a major centre for headquarters was far from secure as there had been a slowdown in new jobs at headquarters since the 2016 referendum. FDI into London projects also dipped in between 2015-17 but, in fact, had since recovered – from 319 in 2017 to 375 last year.Centre for London said it was calling on the capital's government, "to continue to lobby for an immigration policy that supports the city’s headquarter economy – and seek more regional control of immigration policy if this cannot be achieved nationally".

Affordable housing and transport infrastructure need to be tackled

The report also argues that London must work to tackle its affordable housing problem and continue to invest in the UK’s transport and logistics infrastructure.Rajesh Agrawal, London's deputy mayor for business, said, “London is one of the best places in the world in which to live, work and build a global business. Its pre-eminent position as a capital for business, talent, culture, innovation and openness are the main reasons why so many companies choose the capital for their headquarters.

Proposed immigration policy could damage London’s competitiveness

"However, the government’s proposed immigration policy risks severely damaging London’s competitiveness. Although London will always continue to thrive, continue to be open and continue to be a leading global city, we need an immigration system in place that makes it easier, not harder, for people with the skills our economy needs to come and work here.”Eddie Curzon, London director at the Confederation of British Industry, added, “London is one of the world’s truly global cities. From international firms and inward investment to a diverse and dynamic pool of students and workers, the capital’s reputation as the place to live, study, work and invest is unrivalled.“Our world-leading financial, tech and creative firms hold the key to unlocking the growth that will ensure the city remains a global business powerhouse for years to come.“But this is no time to rest on our laurels. From Brexit to housing and a workable immigration system, there are major challenges that need to be overcome if we are to continue to provide a compelling answer to the question: ‘Why London?’."Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory