Europe remains cheapest region for entity management
LONDON, UNITED KINGDOM — Europe retained its ranking as the most affordable region for multinational corporations (MNCs) to operate legal entities in 2023, according to a report by Mercator. This marks Europe’s second straight year holding the top cost-efficiency position.
The annual Mercator Entity Management Report analyzed that average global entity costs dropped 4% thanks to the increased adoption of digital tools like e-signatures. However, the report warned of a widening gap globally based on uneven progress of digitalization.
While ongoing implementation of the EU Digitalization Directive and a competitive legal industry helped lower Europe’s costs, Mercator said regions like the Middle East, Africa, and Latin America remained most expensive overall. Many countries in these regions still require in-person meetings and physical document legalization.
This uneven digital adoption caused the average worldwide time for entity-related activities to rise 48% in 2023, despite the cost savings seen in some regions.
“What is becoming increasingly clear, however, is that the gap is widening between Global Financial Centres with streamlined, tech-driven solutions – such as Singapore, the United Kingdom, and the United States – and those jurisdictions still relying on traditional in-person processes,” said Mercator Head Kariem Abdellatif.
“In those jurisdictions, the added complexity not only creates administrative burdens for in-house teams but also costs multinationals more time and money.”
The report also showed that North America is the fastest region for entity management, with e-signatures and e-filings decreasing average task time by 14%. But Mercator warned of diverging efficiency between modernized and outdated jurisdictions.
