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Of the countries under consideration, the five that would be most suitable for immediate establishment of a BFSI subsidiary are Kuwait, South Africa, New Zealand, Peru, and Latvia. Kuwait, which is in the northeast corner of the Arabian Peninsula, with a society of high level of income (Kuwait, 2016), currently holds approximately 7% of the world’s oil reserves (Kuwait Country Commercial Guide, 2017). Thus, the country has a thriving economy that can be well-suited for additional financial services, such as the insurance and credit services offered by a BFSI subsidiary. Being in the Arabian Peninsula, Kuwait could also be the key the subsidiary needs to enter the Middle Eastern market.
South Africa is an ideal country to expand to due its economic and financial stability and strength, which it proved during the 2008 financial crisis, and the undeniable fact that it’s the main entry location into the sub-Saharan African market, with corporations from the country generally being accepting of various partnering with U.S. companies (South Africa Country Commercial Guide, 2017). Besides the low risk involved in investing in South Africa, thanks to its financial stability, South Africa has English as its main language, which will make it easier to do business there, it has a growing middle class, which will need a growing number of financial services as well and has been ranked as the top country in Doing Business in Africa, which promotes the ease of doing business in South Africa. (South Africa Country Commercial Guide, 2017). Moreover, being a popular touristic location in Africa, South Africa will ensure globalization of services for tourists that are there.
Although New Zealand is a country of only 4.5 million in population, it has an impressively stable democracy with a GDP of $40,695 per capita, a high overall ranking in education for its public with a ranking of 17 in mathematics as well as a high income (New Zealand, n.d.). Not to mention, New Zealand is noted for its means of doing honest business full of integrity, and has business practices that can be easily compared to those within the United States, which will make it easier for the subsidiary for to adapt to the environment (New Zealand Country Commercial Guide, 2017). New Zealand is ideal with its small market size, and remains as an appealing prospect with its honest proceedings.
Peru is currently the leader in economy within the Latin America, with a forecasted annual GDP growth of 3.99% by 2020 (Peru, n.d.), and will be a great opportunity for a BFSI subsidiary to promote BMC’s products in Peru’s constantly developing nation. As the economy in Peru steadily grows, the rate of poverty continues to decrease in Peru and political tensions are decreasing on a daily basis, and has been ranked in the top 100 among countries surveyed in terms of ease of doing business (Peru Country Commercial Guide, 2017). Peru’s current President, Pedro Pablo Kuczynski, is a former World Bank official who is now promising macroeconomic stability for Peru (Peru Country Commercial Guide, 2017), which will also be beneficial for the BFSI subsidiary.
Latvia is an advantageous geographic location for the Eastern European region due to its highly developed transportation systems which can be beneficial in providing an economic and financial gateway for the company to make an effective entry into Eastern Europe through Latvia (Latvia Country Commercial Guide, 2017). The economic sector of Latvia includes various markets such as crediting and insurances that the BFSI subsidiary can readily enter, and with its law of treating domestic and foreign investments equally, Latvia is a quintessential country to consider when globally investing.
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