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UK EPM: Special Report – February 2023
Mercator by Citco’s (Mercator) latest report provides direct insight into the practice and dynamics of entity portfolio management in the United Kingdom (UK).
UK Ranking as Base for Multinational Legal Entities Drops as International Competition Catches Up
The United Kingdom (UK) fell from 3rd place out of 170 jurisdictions in 2021 to 7th in 2022. This is due to the rapid advancements of other jurisdictions in digitalizing company law procedures and a consequence of flexible company regulations, introduced across the world in response to the disruption caused by the COVID pandemic. This leaves the UK in a worse position comparatively, falling from the 14th fastest country for completing corporate activities in 2021, to 26th in 2022.
However, the UK remains one of the most cost-effective jurisdictions to set up entities, rising from the 19th cheapest country in 2021 to 14th in 2022. This is driven by a highly competitive and well-established legal sector, which significantly lowers the cost relative to other jurisdictions due to competitive market pricing.
Overall, the data shows the UK is 36% cheaper and still 40% faster than the combined average of all other 170 jurisdictions worldwide.
Kariem Abdellatif, Head of Mercator by Citco, comments:
“Overall, the UK’s combination of lower costs and speed of business in managing multinational entities – paired with its straightforward legal system and international standing as a global financial center – means it remains a favorable location to base corporate entities.
“Legal services in the UK are well established and often externalized which also further increases demand and in turn the supply. This highly competitive legal market ensure cost efficiency and high quality services.”
“Of course, the purpose of this report is not to advise multinational companies on where to base entities or subsidiaries – this is obviously dictated by necessity – but to set expectations and provide foresight on the relative cost and time it takes to complete activities in the UK.”