For the second year in a row, Europe was ranked as the lowest-cost region
North America was ranked as the fastest growing region
With the growth of legal services and the increasing degree of digitalization, the global average cost has been reduced by 4%.
The global average time has increased by 48%, and there are even greater disparities in technology adoption around the world
Overall, Malaysia, Australia, and Singapore are among the best jurisdictions in the world
LONDON--(BUSINESS WIRE)--Europe continues to top the list of regions with the lowest physical costs for multinational companies to operate this year, while the gap is widening globally and digitalization is advancing at different speeds around the world. According to data compiled by Mercator by Citco (Mercator), a leader in entity portfolio management (EPM), in its annual Mercator Entity Management Report 2023, the global combined average cost for multinational companies to complete entity-related activities decreased by 4% in 2023. In some regions, the increased use of digital tools has improved cost efficiencies and streamlined entity management processes, while growth in legal and company secretarial support departments has also played a role, as a range of vendors have helped reduce costs. For the second year in a row, Europe is the region with the lowest operating costs for multinational companies, driven by the continued implementation of the EU Digitalization Directive and the highly competitive legal services market. The Middle East & Africa and Latin America are the most costly compared to Europe, as many jurisdictions in these regions still require wet ink signatures and require multiple steps such as notarization, translation, and certification of foreign documents. This data is directly reported to Mercator's EPM technology platform, Entica. The data also shows that North America is the fastest region to do business, thanks to the widespread adoption of electronic signatures and electronic documents. The average time to complete a mission in 2023 has decreased by 14%. However, time has either increased or not changed significantly in all other regions, and the efficiency gap between those jurisdictions that have adopted digital technology and those that still rely on traditional legalization methods, physical filings, and interviews is widening. Nowhere is this more evident than in the Asia-Pacific region. The region has some of the most efficient processes, as well as some of the most complex ones, for multinational companies in the region. This difference has led to a 48% increase in the global average time. Based on the ranking of various jurisdictions, overall, Malaysia is the most suitable region to set up an entity in 2023 (based on the overall cost and time required to manage an entity), followed by Singapore and Australia. In contrast, Taiwan, Vietnam, and Norway ranked the lowest. Karie Abdellatif, Head of Mercator, commented: "Overall, we continue to see digital drivers revolutionizing the way multinationals manage and maintain their global portfolio of entities, with more jurisdictions around the world adopting digital tools to streamline processes and improve efficiency in 2023. "However, it is becoming increasingly clear that global financial hubs such as Singapore, the United Kingdom, and the United States have adopted simplified, technology-driven solutions. The gap between them and those jurisdictions that still rely on traditional face-to-face processes is widening. In these jurisdictions, the increase in complexity not only imposes an administrative burden on in-house teams, but also costs multinationals more time and money. "Of course, the purpose of this report is not to recommend to multinational companies the establishment of entities or subsidiaries in ** – which obviously should depend on necessity – but rather to set expectations and provide a forward-looking opinion on the relative cost and time required to complete key activities to ensure that entities around the world remain compliant. The 2023 Mercator Entity Management Report is part of the Mercator Entity Portfolio Management Series. It provides direct insight into the cost and time of managing a global portfolio of entities, based on real-world data. END EDIT: The statistics that form the basis of this report cover the period from October 2022 to November 2023 and are extracted directly from Mercator by Entica, Citco's proprietary EPM technology platform. The platform records all the activities carried out for the clients separately. The data covers more than 180 jurisdictions and 20 different types of company secretarial tasks. These figures represent all major business areas3$41 trillion in market capital, and only related to the activities of multinational corporations. About Mercator by Citco (Mercator)As a pioneer in Entity Portfolio Management (EPM), Mercator builds lasting partnerships with clients to understand their individual needs and provide convenience, efficiency, and visibility with a clear layer of oversight. Mercator's deep knowledge and know-how in EPM, Entica, is changing the way companies view and manage their portfolio of entities, helping them navigate an increasingly complex regulatory environment. As part of the Citco Group of Companies (CITCO), Mercator works closely with our Governance Services team – a customized, centralized service that provides services such as Business Process Outsourcing (BPO) accounting, CRS, director qualifications and payroll. The transparency provided by Mercator's data insights combined with the forward-thinking expertise of the Governance Services team means that Citco can support all entity management needs of any multinational company. About the Citco Group of Companies (CITCO)The Citco Group of Companies (CITCO) is a global network of independent companies. These companies are leading providers of asset servicing solutions for the global alternative investment industry. Citco's total AUM is more than 1$8 trillion with 9,800 employees in 36 countries. For more than 40 years, Citco's unique culture of innovation and customer-driven solutions have made it a trusted partner for Citco customers. 