Netherlands more and more attractive for foreign companies
The Netherlands is becoming more and more attractive for foreign companies looking to establish themselves in Europe. This was confirmed by a survey carried out by KPMG every two years, into business costs in the US, Japan, Australia, Canada, Great Britain, France, Italy, Germany, the Netherlands and Mexico. Amongst the European countries included in the survey, the Netherlands is the cheapest location for foreign companies in terms of business costs. Japan and the US as well have to give way to the Netherlands. The countries in the survey have been benchmarked against the US. The survey covers 27 types of costs that companies come across in their operational management. The Netherlands has a cost advantage of 3.5% compared to the US and has the best score amongst the European countries. The Netherlands has a 1.7% cost advantage on Great Britain, in second place amongst its European peers. Japan and Germany remain the most expensive locations of the countries surveyed. They have a cost disadvantage compared to the US of 7.6% and 2.6% respectively. Companies looking for a new location find the cheapest option worldwide in Mexico. The costs accompanied with setting up a business, are lowest here. Besides the countries themselves, the costs in the hundred most important economic centers within these countries have been compared as well.
“Compared to the 2008 survey the Netherlands’ competitive position in Europe has improved substantially”, acknowledges Elbert Waller, International Affairs Executive at KPMG. Waller: “Two years ago the Netherlands was still facing a cost disadvantage in relation to France and Great Britain. This year we leave all other European countries behind us. We owe our position in particular to the uniform cost structure in the Netherlands. As opposed to other countries surveyed the most important economic centers in the Netherlands like The Hague and Amsterdam score high without exception. In view of business activities the Netherlands is particularly attractive for companies that are active in research and development. This is especially motivated by our extensive fiscal incentives measures. The fact that the Netherlands scores well in this cost comparison is an important signal for foreign companies that focus on costs as a selection criterion, especially nowadays.
KMPG has looked at both the costs a company has to make when starting up a company as well as the operational costs over a period of 10 years. By sector costs for amongst others energy, transport, telecommunications and labor have been investigated. Waller: “Labor costs remain the most important cost item. For companies with manufacturing activities labor costs take up 45 to 60% of total costs. In the service sector this percentage varies from 74 to 85%. Total labor costs are lowest in Mexico, followed by Canada, Great Britain and Australia. Additionally the cost of land and buildings is an important factor. Office costs for manufacturing activities vary between 2 and 7% and are lowest in Mexico, followed by the US and Canada. For non-manufacturing activities costs vary between 5 and 18%, with Mexico as the cheapest location, followed by the Netherlands and the US. Utility costs make up for another 1 to 7% of location sensitive business costs. Electricity is cheapest in Canada, France and the US. Mexico, the US and Canada offer the lowest natural gas costs.
Source: KPMG Netherlands press release, 30 March 2010
