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How to check a country's risk factors before investing offshore

by , 05 June 2015

If you've decided to invest some of your cash offshore, it's important to weigh up the potential risks of countries you're looking at.

So how can you check?

Read on to find out…


Weighing up offshore investment destinations


When investing offshore, it’s important to consider country-specific risks.

FM Global, an international insurance company, has devised a tool to help you do just that: The Resilience Index.

The index ranks 130 countries resilience to supply chain disruption. The risk of supply chain disruption “is one of the leading causes of business volatility,” says FM Global.

This is a useful tool for you. It looks at nine different factors, including the control of corruption, political risk and economic growth per head.

From looking at the Resilience Index you can easily see how different countries rank. And this can be insightful when investing offshore. You want to weigh up potential risks facing a country.


How offshore destinations measure up


FM Global recently updated its index. So what countries are the most vulnerable to shock and which are the least vulnerable?

The five most vulnerable countries

  1. Venezuela;
  2. Kyrgyz Republic;
  3. Mauritania;
  4. Nicaragua; and
  5. Dominican Republic.

Venezuela ranks as the top of the most vulnerable countries. This is due to its soaring crime levels, high inflation and the impact of the low oil price.

The five least vulnerable countries

  1. Norway;
  2. Switzerland;
  3. The Netherlands;
  4. Ireland; and
  5. Luxembourg.

Norway ranks the most resilient thanks to its low political risk, high productivity levels and ability to cope with a low oil price despite being heavily dependent on the industry.

And how does South Africa measure up? South Africa ranks 46th in the index.

So there you have it. How to check a country’s risk factors before investing offshore.

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How to check a country's risk factors before investing offshore
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