Companies looking to invest in emerging overseas markets would do well to look beyond Brazil, Russia, India and China, according to research carried out by PricewaterhouseCoopers.

The accounting firm’s inaugural report, The EM20 Index ­ Balancing Risk & Reward ranked 20 key emerging markets and found that for manufacturing companies looking to invest overseas, Vietnam is the most attractive destination, while for services businesses, the United Arab Emirates comes out top.

China remains an attractive destination ­ even if recent events at Mattel have dented confidence within western companies.

PwC’s EM20 index is based on a model developed by economists which incorporates factors associated with the rewards that can be had in each country ­ GDP per capita, economic growth rates, taxes, transport and tariffs. But it also takes into account risk factors taken from the country’s bond market data.

“In the UK there is a widely recognised need for companies to embrace emerging market opportunities to avoid falling further behind competing developed countries,” said Ian Coleman, head of emerging markets at PwC. “The Index can act as a valuable framework or filter to help companies with their initial screening of investment location opportunities, but a good investment appraisal is bespoke and considers all factors relevant to a business. That means including factors over and above economically-derived risk and reward such as the need for certain types of labour skills or language capabilities. The regulatory environment and business culture may also be relevant for many companies.”

Although Vietnam and China came top of the manufacturing league table, there was little to discern between several jurisdictions, suggesting that businesses have plenty of choice over where to invest. In contrast, services businesses are much more widely spread with the UAE the clear leader.

Poland topped the list of European countries, coming third in the manufacturing league and sixth in services.