Iceland is the second lowest-cost country overall and the lowest-cost country in Europe in the 2002 report “Business Costs in Iceland” published by KPMG. The objective of the KPMG report was to compare the relative cost of operating various types of business in cities in Austria, Canada, France, Germany, Iceland, Italy, Japan, Netherlands, United Kingdom and the United States. Fourteen operations are examined in the report. Iceland has the lowest business costs among all the ten countries for nine of the fourteen operations, including all four software and R&D operations, as well as three manufacturing operations - pharmaceuticals, electronics assembly, precision components - operation of medical device production and operation of server farms. The overall results show Iceland’s favourable operating environment with its low tax structure, high education levels and competitive cost for skilled labour, land and electricity. Iceland is therefore a strong candidate for businesses to short-list when seeking new locations for their international operations.   The KPMG report, and a summary report, can be downloaded below.