MERCATOR-BY-CITCO

More flexible company regulations introduced to fit Working From Home arrangements during the COVID pandemic took effect over the past year as multinationals used digitized processes to work faster and reduce the costs of managing their legal entities – according to data compiled by Entity Portfolio Management (EPM) leader Mercator® by Citco (Mercator), in its annual Mercator Entity Management Report 2022.

Europe is now the cheapest region for multinationals to base entities due to the permitting of new digital filing processes, and the ongoing implementation of the EU Digitalization Directive. APAC remains the quickest region to operate as it had already implemented many of these digital processes prior to the COVID pandemic – and refined them further since last year. Overall, multinationals were able to reduce the time spent on managing their entities over the past year by almost a fifth (17%) in this new digital landscape.

Ranked per individual jurisdiction, Bermuda emerges as the most favorable location overall in which to base entities in 2022 – based on the overall cost and time involved in managing entities – followed by Luxembourg and Germany. In contrast, the People’s Republic of China, South Korea and Taiwan are the lowest ranked in this comparison.

Overall, the data – which is sourced directly from Mercator’s EPM technology platform, Entica™ - showed Bermuda takes pole position due to the following advantages:

• An ideal combination of cost levels and time to complete tasks;
• Availability of electronic filings for all corporate-related actions;
• Service providers can act as a company secretary – which streamlines activity;
• E-signatures are widely acceptable – both internally and by authorities;
• Only a limited, prescribed list of corporate changes require registration with authorities, allowing many changes to be implemented by internal decisions;
• Companies are allowed to waive preparation and approval of financial statements.

Kariem Abdellatif, Head of Mercator said: “The global management of a multinational’s entities has never been more important as in-house legal and corporate secretarial teams work in a challenging environment where regulations change constantly. Out of the turmoil of the COVID pandemic, it is heartening to see that regulators and businesses have responded rapidly to the challenges of working in a new, remote working world. It is particularly impressive to see how the EU and APAC regions have committed to modernizing company processes to fit this new digital age, with Bermuda winning overall from its digitization drive."

“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 supporting their entity portfolio.”

To read the full report please visit: https://mercator.net/our-thinking/publications/mercator-entity-management-report-2022/

The Mercator Entity Management Report is part of Mercator’s Entity Portfolio Management Series, providing direct insight on the cost and time to manage a global portfolio of entities, based on real-life data.

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About Mercator® by Citco

The pioneer of Entity Portfolio Management (EPM), Mercator creates lasting partnerships with its clients to understand their individual needs and offer ease, efficiency and visibility through a clear layer of oversight. Mercator’s unrivalled knowledge of EPM and proprietary technology – Entica™ – is evolving the way companies view and manage their portfolio of entities, helping them navigate an increasingly complex regulatory environment.

As a part of the Citco group of companies (Citco), Mercator works closely with our Governance Services team – a bespoke, centralized service offering BPO accounting, Common Reporting Standard, directorships and payroll services, among others. The transparency offered by Mercator’s data insights combined with Governance Services’ proactive expertise means Citco can support any multinational corporation on all of your entity management needs.

About the Citco group of companies (Citco)

The Citco group of companies (Citco) is a network of independent companies worldwide. These companies are leading providers of asset-servicing solutions to the global alternative investment industry. With over $1.8 trillion in assets under administration and 9,800 staff deployed across 36 countries, Citco’s unique culture of innovation and client-driven solutions have provided Citco’s clients with a trusted partner for more than four decades.

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