Cross-border business and investment in a new era of globalisation

22 March 2023
Following the most turbulent period in recent memory, Vistra surveyed over 600 professionals and conducted 20 in-depth interviews to better understand the challenges today’s global businesses and investors face. The result is the tenth Vistra 2030 report. Simon Filmer, who heads Vistra’s company formation sector, calls the latest report “our most comprehensive look yet at how and why businesses, investment firms, regulators and the industry itself are adjusting to a new kind of globalisation.”

To put the latest report in context, cast your mind back to October 2020, when we released the previous iteration of this research series. Covid-19 gripped the global economy and the dominant sentiment was uncertainty. Businesses, markets and individuals around the world had no idea when pandemic lockdowns would end and what their long-term effects would be.

Months later, these uncertainties were compounded by Russia’s invasion of Ukraine, which fuelled inflation and interest rate rises and exacerbated long-simmering tensions between the US and China.

Underpinning these events, the unfolding climate crisis and digital revolution continued to drive change across the global business landscape.

Today, we mark tenth iteration of the survey across a thirteen-year period. Our latest report shows that confidence is returning to the global economy, but the lasting effects of the pandemic continue to be felt — from remote working to a rethinking of supply chains. Geopolitical tensions also persist, and cross-border business has been permanently altered.

Fund, corporate, capital markets and private wealth market participants are modifying their strategies and operations in response to these and other evolving realities. And to meet these new challenges, they’re demanding more from their fund and corporate services providers.

Defining a “new globalisation”

Participation in our survey has climbed over the years and the report now has a truly global reach, with over 3,000 total respondents from every region in the world. Throughout the series, we’ve focused on certain recurrent topics, including changing perspectives on key jurisdictions, shifting client priorities and regulatory transformation. We’ve also added (and in some cases dropped) topics to ensure we’re addressing the pressing issues facing global businesses and investors today and in the future. Finally, given the longevity of the series, we’ve rebranded its title from Vistra 2020 to Vistra 2030.

Along the way we’ve witnessed significant shifts. For example, privacy and tax planning were cited as the top growth drivers in our 2010 survey. In our latest survey, only 4 percent of respondents expect tax planning to drive new business, and just 2 percent highlight privacy.

And we haven’t just charted survey responses — we’ve tried to put the data into context and draw conclusions with the help of our own experience and the insights of the many industry veterans we’ve interviewed in the last decade. In our 2020 edition, we predicted globalisation would face its toughest test yet. We think that forecast has been borne out, thanks not only to Covid-19 but to events since.

We believe the cumulative results of our surveys indicate that a “new globalisation” is emerging. This is evidenced by many businesses redesigning their supply chains, the trend toward investors and wealthy individuals relocating or diversifying their assets, and the ongoing rebalancing of global power, among other factors.

This new globalisation is the background of our latest Vistra 2030 report, which has four headline findings.

  1. Confidence is returning despite global headwinds. Over half of survey respondents are confident about their firm’s growth prospects, up from just 38 percent in 2020. And while it remains challenging to operate across borders, the majority of respondents think that any recent setbacks to globalisation are temporary rather than permanent.
  2. The United States moves to the tops of jurisdiction rankings. The US displaces Singapore, while Hong Kong recovers its advantage in APAC. Despite these and other changes — including a gradual shift from offshore to onshore jurisdictions — our rankings have remained relatively consistent since the series began. In other words, we are witnessing a “flight to quality,” where incumbent jurisdictions remain appealing due to established trade routes, the availability of deep expertise and the rule of law.
  3. Organisations know ESG is important but don’t know where to start. A majority of respondents believe that ESG reporting requirements will become the global norm by 2027, and a similar number believe that will be a positive for the fund and corporate services industry. For some firms, ESG is already a topic of daily conversation with clients.
  4. Global regulatory cooperation is expected to slow, but could find fresh momentum. Expectations for regulatory convergence declined for the first time in 2020, and this year’s survey reveals that industry professionals are increasingly dubious about the prospects for international convergence on key regulatory initiatives in the coming years, such as the common reporting standard.
A new mission for fund and corporate services

It’s difficult to overstate the transformative effect the last three years have had on the global economy. While some businesses and institutions are grappling with the uncertainty, this backdrop is creating new opportunities and catalysing the evolution of the industry.

As we’ve seen, perceptions that the fund and corporate services industry is only about tax and privacy are outdated. Multinational businesses, private equity firms, family offices and other stakeholders are looking beyond these areas to gain financial and operational efficiencies. They’re now optimising all aspects of their organisations across their global footprints, from supply chains to multi-country payroll to corporate governance and more.

The fund and corporate services industry must help its clients effectively address these needs and remain flexible in the face of emerging demands. Expansion into growth areas such as ESG will be essential to the industry’s future. Those industry providers that don’t keep pace will be left behind.

To learn more about how businesses and investors are adapting to a new era of globalisation, download the complete Vistra 2030 report.