Business interest in expanding into Europe reached a five-year high in the first quarter of this year despite the Covid-19 pandemic taking hold in the region, according to global expansion solutions provider Velocity Global.
The business helps hundreds of companies expand into new markets around the world through International Professional Employer (PEO) services for thousands of employees in more than 100 countries. Velocity Global saw a 25 percent jump in enquiries from businesses interested in Europe in Q1 2020, compared to Q4 2019.
Ben Wright, Velocity Global founder and CEO, said: “The interest we see in European expansion is at an all-time high, although companies are watching closely for signs of recovery before making a move. Our data shows a pattern across regions starting with Asia-Pacific: increased enquiries followed by accelerated expansion. Europe appears to be in the first stage of that paradigm with the highest quarterly volume of enquiries since we opened our doors six years ago.”
The company’s data shows hiring has also rebounded in Asian-Pacific (APAC) markets such as China, Singapore, and Japan, with the region expected to lead the global recovery from the pandemic.
The number of companies choosing to expand into APAC more than doubled in March when compared to the first two months of the year. This followed a fall of a third (32 percent) in January and February, compared to the previous six-month average.
Ben Wright added: “Firms looking to expand into Europe and Asia still want to take advantage of the opportunities provided by global expansion, but flexibility is paramount now more than ever. Businesses seek agile ways to enter foreign markets as opposed to the lengthy process of setting up legal entities, making it easier to exit if conditions change.”
In a survey of 1,000 UK and U.S. tech companies carried out by Velocity Global in January, 41 percent cited Europe as the location that offers them the best opportunity for revenue and profit growth. Asia (23 percent) and North America (19 percent) were a distant second and third.
The research, published in the company’s 2020 State of Global Expansion™ report, found that reaching new customers was the fundamental motive behind expansion for 62 percent of respondents, followed by developing greater economies of scale (56 percent) and accessing tech talent (42 percent).
An International PEO, sometimes known as an Employer of Record, employs overseas workers on behalf of a business through a network of business units in those countries. The system enables firms to establish a workforce in a new market quickly, without the need to set up a foreign legal entity.