Competitive

Alternatives
KPMGs guide to international
business locations costs
2016 edition

CompetitiveAlternatives.com

Corporate sponsors

Introduction
Globalization continues to reshape the international economy. For many organizations,
global expansion can have a tremendous positive impact on both top and bottom line.
For others, expanding or relocating a business may be a matter of survival, as they
face increasing pressure from foreign competitors.
If your organization is focused on growth, controlling costs, diversifying, and
increasing value for shareholders, the impact of international expansion and location
costs must be a part of your global strategy.
Business costs represent one of the many important factors considered in virtually all
corporate location decisions. KPMGs 2016 Competitive Alternatives report explores
the most significant business cost factors in more than 100 cities and 10 countries
around the world. This study measures and provides insight on the impact of 26 key
cost components, across 7 business to business service segments and 12 significant
manufacturing sectors.
I hope this report helps your organization as you identify and compare potential
locations for relocating or establishing new operations abroad. If you have any
questions about our research or would like to discuss the impact that location cost
competitiveness can have on your business, please feel free to contact me or any one
of the KPMG professionals listed at the end of our report.
Greg Wiebe
Partner
KPMG LLP

Competitive Alternatives 2016

2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Relocating your
business?

Top countries with the

lowest business costs
1.

Canada

10

Mexico

UK

US

2. Canada

Netherlands
Japan

Germany

3. Netherlands
4. Italy

5. Australia

Infographic

Australia

6. France
7.

UK

8. Germany

France

Mexico

9. Japan

Italy

10. US

Top 3 cost competitive countries

Major cost factors

Mexico

Canada

st

Labor

Facility Costs

Corporate income tax rates

Mexico

Transportation Japan

nd

Digital

Canada

UK

R&D

France

nd

rd

Netherlands

Netherlands Canada

Canada

Germany

Countries with the most

significant increase in
cost competitiveness
(2012 to 2016)

2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

st

Italy

Germany

Canada

rd

10.1%
Canada

Corporate

UK

Canada Netherlands

Manufacturing

UK

Canada Netherlands

8.8%
Italy

15.3%
Japan

13.8%
Australia

KPMGs Global Location and Expansion Services

Corporate sponsors

In most industries today, companies have to operate internationally to stay successful and
grow. The need to enter new markets, serve major customers, or reduce costs and risks
are just some of the reasons why businesses decide to establish a presence overseas.
KPMG Internationals Global Location and Expansion Services (GLES) group was formed
to assist clients in the location and establishment of operations around the world. GLES
professionals can provide objective advice that can help companies:

MMK Consulting directed this project on behalf of KPMG, including study design
and execution, web development, and report authorship:

Develop an approach for international expansion to support business objectives

Determine the requirements of a new operation and translate these into criteria for
evaluating locations

Glenn Mair, Study Director, 1997 to 2016

+1 604 484 4622
gmair@mmkconsulting.com
Treena Cook, Project Manager
+1 604 484 4623
tcook@mmkconsulting.com

Identify and compare countries, regions, and cities as potential locations for relocating
or establishing new operations

Stuart MacKay, Founder of Competitive Alternatives

+1 604 484 4621
smackay@mmkconsulting.com

Select and evaluate potential properties, buildings, or sites for a new facility

mmkconsulting.com

Negotiate and secure grants, tax breaks, and other types of incentives and support
Set up new operations in a tax-efficient manner.
Based in all regions of the globe, KPMG Internationals network of GLES professionals
offer locally relevant, industry-specific knowledge that can help support expansion and
relocation decisions.

Colliers International supplied real estate costs for all locations examined.
Howie Charters
+1 604 681 4111
howie.charters@colliers.com
colliers.com

Other contributing organizations

Mercer supplied labor cost data for all study countries.
ERI Economic Research Institute supplied labor cost data for Canada and the
United States.
Galaxy Transport Corp. coordinated the collection of freight cost data for all study
countries.
Cosmex International supplied operational cost data for Mexico.
KPMG also thanks the many other organizations that assisted in developing the
information on which this study is based. Selected data sources are detailed in Appendix C.

Competitive Alternatives 2016

2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.

Contents
Executive summary (published separately - click here)
Overview, trends, locations, sectors, cost factors
National results
Countries: Australia, Canada, France, Germany, Italy, Japan, Mexico,
Netherlands, United Kingdom, United States
City Results
Regions: New England/Atlantic Canada, Northeast US/Central Canada,
Southeast US, Midwest US/Canada West, Pacific US/Canada
Other sponsored cities
Sectors & operations: Digital services, R&D services,
corporate services, manufacturing
Cost factors: Labor, facility, transportation, utility, financing
Taxes: Property, capital, sundry local, transaction, income
Costs in context, site selection factors, impact of low oil

Study appendices (published separately - click here)

2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.