Singapore Offshore Company

Singapore is the most cost-competitive place to do business among nine industrialized countries, according to an annual competitiveness survey by KPMG, the professional services firm.

KPMG’s bi-annual study, entitled 'Competitive Alternatives,' measures 27 key cost components, including labour, benefits, business facilities, taxes and utilities as applied to business operations in industrialized countries.

Singapore, new to the study and with a cost index of 77.7, has a business cost advantage of more than 20 percent over the benchmark United States results.

Canada ranks second overall with a cost index of 94.5, retaining its previous position as the lowest-cost country among the G7 countries.

France (95.6), the Netherlands (95.7), Italy (97.8), the United Kingdom (98.1), the United States (100.0), Japan (106.9) and Germany (107.4) made up the rest of the ranking.

According to the study, labour costs typically represent the majority of location-sensitive costs, for both manufacturing and non-manufacturing operations. Facility costs represent the second largest location-sensitive cost factor, accounting for 10% to 22% of costs for manufacturing operations and 4% to 13% for non-manufacturing operations.

Taxes are another key factor, representing 3% to 13% of total location-sensitive costs.The 2006 edition of the study also includes a comprehensive analysis of 128 cities in the nine countries studied, based on the after-tax cost of startup and operation for 17 different types of business, over a 10-year planning horizon.

For international cities with populations of more than two million, Singapore ranks as the most cost-competitive overall. Montreal is the most cost-competitive large city in the G7, followed by Atlanta, Toronto, Tampa, and Amsterdam. The city with the highest business costs is New York, followed by Frankfurt, London and San Jose.Among medium-sized and smaller cities included in the study, the lowest-cost city is Sherbrooke, Canada, while in Europe, the lowest-cost city is Montpellier, France

.Commenting on the cost competitiveness of cities in the study, KPMG’s Mark MacDonald, observed that: “There is often a tradeoff between larger cities with deeper labour pools and better support infrastructure, and smaller cities, which tend to have lower labour and facility costs.”

The KPMG analysis is based on cost information collected primarily between July 2005 and January 2006, and on tax rates as at January 2006.