How attractive are European Life Sciences Sites?

in Industry insights, Tax, 03.11.2015

What makes a country in Europe attractive to foreign Life Sciences companies? KPMG Switzerland, in collaboration with Venture Valuation, has released its 2015 Report on “Site Selection for Life Sciences Companies in Europe”, which offers facts and figures for international Life Sciences companies looking to expand, restructure or consolidate their activities in Europe. The report compares seven European countries (Belgium, France, Germany, Netherlands, Ireland, Switzerland and the UK) with strong Life Sciences clusters and/or important attractiveness to Foreign Direct Investors (FDIs) on how they support Life Sciences companies in:

  • strengthening their Capabilities by collaborating with peers and universities for various activities such as R+D, Supply Chain, Marketing through Clusters of Life Sciences companies
  • improving their Agility to react quickly on changing market environments, client needs, regulations and technologies
  • increasing their Value by benefiting from tax planning and incentive models

Key findings regarding clusters:

  • In total there are roughly 11,000 Life Sciences companies (Biotech, Pharma, Medtech) across 14 European countries and in Israel.
  • The largest concentration of Life Sciences companies can be found in Germany, the UK and France. Germany leads in Medtech, while the UK is the leader in Pharma and in Bio Therapeutics.
  • Switzerland is the leader in workforce in the Life Sciences industry compared to the size of its population.
  • In terms of Foreign Direct Investments, the UK clearly leads the group with 37 regional HQs of foreign-owned Life Sciences Multinationals, but other smaller countries such as the Netherlands, Belgium or Switzerland are equally attractive when taking into account the size of their respective economies.
  • UK has the largest numbers of top ranked universities (8). Compared to the size of the population, however, Switzerland, the Netherlands and Belgium (each 4) are better rated.
  • Switzerland is rated the most innovative country in Europe followed by Germany, Belgium and the Netherlands.

Key business environment factors which influence the agility of a Life Sciences company are among others flexible labor laws and how easy it is to attract qualified staff. Here the Anglo- Saxon Countries along with Switzerland, the Netherlands and Germany fare especially well.

Diligent and forward-looking tax strategies are important tools to increase the value of a Life Sciences company. Particularly important are tax rates for income generated by intellectual property, as well as incentives for R+D. The countries covered in this report apply various strategies to remain competitive in this field. Ongoing discussions on Base Erosion and Profit Shifting (BEPS) which focus on substance for sustainable tax planning will limit certain tax planning strategies. The report covers the main features in regard to taxes and incentives for each of the seven countries.

The report should assist Life Sciences executives and their advisors in initially shortlisting potential target countries for building or shifting substance within Europe. Naturally, further detailed analysis will be necessary to reach a final decision.

Further information: