The regulatory system for businesses can be an important factor to consider when international companies are deciding which markets they want to expand in.
After all, excessive red tape can be seen by some as a barrier to growth, so firms may therefore wish to avoid countries they believe are overly bureaucratic.
However, foreign direct investment is critical to countries such as the UK, which could explain why the government has just unveiled changes to its regulatory procedures for companies.
The Department for Business, Innovation and Skills has revealed that millions of pounds worth of red tape is to be removed over the next few months, which should benefit both domestic and overseas enterprises.
This could potentially increase the amount of business money transferactivity between the UK and other countries as more companies seek to establish a stronger presence on British soil.
Mark Prisk, the business and enterprise minister, said the government has been able to scrap these regulatory burdens on firms thanks to the introduction of a One-in, One-out process.
"The system is starting to deliver results, capping the costs to business and then driving them down," he commented.
"We will continue to root out any red tape which poses more of a hindrance than a help to UK businesses."
However, the government has been urged to go further in reducing the amount of regulation for firms in the UK by the British Chambers of Commerce.
John Longworth, director general of the organisation, identified employment law as one area that could be streamlined. He said changes need to be put in place to minimise the impact of the Default Retirement Age being abolished, while he also suggested reforming redundancy procedures and putting no-fault dismissal and tribunal fees in place.
"It is crucial that these changes are implemented without delay to give businesses confidence to invest and grow," he commented.