Assignment-3

Under the supervision of Prof. Bibek Ray

Chaudhari and Prof. Debashis Chakraborty

Submitted by:
Section C
Group 4
Vipul Ghai (MBA06179)
Shubhanshu Pandey (MBA06146)
Anirban Sadhu (MBA06175)
Meet Golakiya (MBA06177)
Hardik Savaliya (MBA06176)
Soumya Varma (PHD01007)
 Assignment 3
Sector Chosen: Chemical

Key Criteria to for assessing the Economic Freedom:

1. FDI Index
2. Corporate tax rate ( Tax Burden, Fiscal Health)
3. Sea Facing (Ease of doing export and import)
4. Optimism about economy (Trade Freedom, Investment Freedom, Financial Freedom)

1. FDI Index

We have selected the Chemical Sector, Generally, Developed countries are more aggressive
towards decreasing the global warming and climate change impacts, while in developing
countries rules and regulations are not that strict compared to other developed countries. For
that we have chosen top 10 emerging countries from the list of top FDI confidence index
countries.
 2. Corporate tax rate :

Virtually all governments are keen to attract foreign direct investment (FDI). in case of
emerging markets tax rates are low compared to developed nations to attract FDI> Tax
policies may also support direct investment abroad, as outbound investment may provide
efficient access to foreign markets and production scale economies, leading to increased net
domestic income.

no Country Last Previous Reference Unit

1 Brazil 34 34 Dec-21 %

2 Australia 30 30 Dec-20 %

3 New Zealand 28 28 Dec-20 %

4 China 25 25 Dec-21 %

5 South Korea 25 25 Dec-21 %

6 Spain 25 25 Dec-20 %

7 Portugal 21 21 Dec-20 %

8 Singapore 17 17 Dec-21 %

9 United Arab Emirates 0 0 Dec-20 %

3. Sea Facing (Ease of doing export and import)
These will bring varying degrees of benefits to the economy and to the country. Ports are
also important for the support of economic activities in the hinterland since they act as a
crucial connection between sea and land transport.all the selected countries are having this
benefit.

4. Optimism about economy

the relative strength of these countries is likely attributable to the fact that all these
markets have strengths in technology and are wealthy markets with high consumer
purchasing power
Now combining all these rankings together we can conclude that UAE, Australia ,China , Singapore
and Spain are the Top 5 destinations for FDIs in the Chemical sector.

Rank

Country Sea Facing? FDI Optimism Corporate Weighted Overall

index about tax rate Rank rank
economy

Australia Yes 1 2 8 106 2

Spain Yes 2 7 6 136 5

China Yes 3 6 4 118 3

New Zealand Yes 4 4 7 142 6

United arab Yes 5 1 1 68 1

emirates

Singapore Yes 6 5 2 120 4

Portugal Yes 7 8 3 164 8

South korea Yes 8 3 5 154 7

Brazil Yes 9 9 9 252 9

In the below table we have considered one more factor which is based on labor laws.

factor weightage

FDI index 10

Optimism about 8
economy

Corporate tax rate 10

Conclusion :

From all the criteria, we have chosen 5 best countries for our expansion in chemical business.
However chemical business is a labour intensive business. Very strict labour laws will adversely
affect the investment. So as final criteria, we have ranked countries based on ease in labour laws.
Here is our final list!

Final 5 destinations that are good for Rank based on

labor laws
chemical business
United Arab Emirates 1

Australia 4

China 2

Singapore 3

Spain 5

References:

[1] https://tradingeconomics.com/country-list/corporate-tax-rate

[2] https://www.kearney.com/foreign-direct-investment-confidence-index/2021-full-report