BDO: CFOs swing to safe markets

By Rob Starr, Content Manager, Big4.com

BDO’s annual survey of over 1,000 CFOs from mid-sized companies planning foreign expansion has revealed that businesses have become more cautious, with 66% planning to significantly increase investment in safe haven markets – including the BRICs, US, UK and Germany – rather than taking a gamble on riskier destinations.

The US, UK and Germany all secure top-10 spots as sought-after markets for international expansion, with the US in second, Germany in fifth and the UK in seventh place. Intention to invest in these three markets has also seen a collective rise, with over a third (36%) planning investment here in 2012, compared with only a quarter (26%) in 2011.

France drops from the seventh most attractive country for investment to thirteenth, while Japan comes in at twenty-seventh: it was previously ranked seventeenth. Cultural and language issues are cited as significant barriers to success in both markets, with a number of CFOs commenting that the change of government in France has created uncertainty, adding to it being perceived as a less attractive investment destination.

The BDO Survey also found that the appetite for risk varies considerably from country to country, with Russian, Chinese and Japanese CFOs most likely to gamble on growth. Six out of ten Russian firms (60%) and nearly half of Chinese and Japanese respondents (46% and 44% respectively) are prepared to take major risks. This compares to just 18% of CFOs in Brazil and 22% in France.