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TMF Group: Largest Economies Often Most Complex for Business
[June 04, 2019]

TMF Group: Largest Economies Often Most Complex for Business

Some of the world's largest economies are the most complex and unpredictable places to do business, according to an independent report commissioned by TMF Group.

The Global Business Complexity Index, which compares key administrative and compliance demands across 76 jurisdictions, has found China, Germany and Brazil - countries with the second, fifth and eighth largest gross domestic products worldwide - among the ten most demanding in the world for multinational firms to operate in.

The report also revealed stark contrasts between global superpowers and among neighbouring countries around the world as political, socio-economic and legislative changes take hold.

"The findings confirm that the business landscape has become more challenging. Any business looking to expand into new territories faces a formidable array of potential hurdles," according to Mark Weil, CEO of TMF Group.

"Trade disputes, tariffs, rising nationalism and political unrest point to a shift from globalisation to economic fragmentation. This has made some of the world's most commercially attractive countries among the most complex to operate in. More than ever, businesses with global ambitions must have a good understanding of the rules and regulations that prevail locally, and how to manage them."

The report, which was based on a combination of statistically weighted data and qualitative research among local market experts, focuses on three areas: rules, regulations and penalties; accounting and tax; and hiring, firing and paying employees.

Greece is deemed the most complex country overall due to frequently changing legislation, differing regional tax rates and inconsistent treatment of firms by the authoriies. By contrast, the three easiest places are the Cayman Islands, Curaçao and Jersey, which thrive on the back of politically-stable and pro-business policies.

Europe is home to the most complex countries for business, with four out of the top ten, including Germany. Conversely, the continent tops the list for the ten easiest places to do business, with the Netherlands, Denmark, Switzerland and Jersey among them.

The UK was deemed the 43rd most complex country. While it remains a robust place to do business, strict governance standards, a complex tax system and anticipated legislative changes following Brexit were seen to add to complexity. It sits just below Russia but was still ranked significantly higher than France, where its President has been pushing for more pro-business policies.

While China is the ninth most complex country, with regional variations in legislation among the issues, this is a marked improvement on the 2018 compliance complexity list produced by TMF Group. Although these legislative changes are seen as posing challenges in the short term, they are likely to bring huge benefits to international businesses investing in China in the long term.

The USA was deemed the eleventh least complex jurisdiction worldwide, due to its relatively straightforward regulatory standards and recent tax reforms making it easier for firms to repatriate profits.

"In over a third of countries analysed, local rules, regulations and penalty systems present major challenges for companies. In many of cases, frequent and significant changes, often designed to attract investors, actually add to complexity," continued Weil. "This report will help give businesses a better understanding of the idiosyncrasies that make up the global business landscape.

"Complexity is no reason to avoid investing. It is a dimension which must be managed. With the right local knowledge and preparation, good companies can thrive anywhere."

The Global Complexity Index - the full rankings:

01 Greece

02 Indonesia

03 Brazil

04 United Arab Emirates

05 Bolivia

06 Slovakia

07 Germany

08 Turkey

09 China

10 Peru

11 El Salvador

12 France

13 Colombia

14 Ukraine

15 Belgium

16 Portugal

17 Qatar

18 Argentina

19 Spain

20 Philippines

21 Poland

22 Kazakhstan

23 Nicaragua

24 Italy

25 Malaysia

26 Canada

27 Vietnam

28 India

29 Serbia

30 South Africa

31 Costa Rica

32 Slovenia

33 Ireland

34 Norway

35 Honduras

36 Luxembourg

37 Jamaica

38 Uruguay

39 Mexico

40 Chile

41 Ecuador

42 Singapore

43 United Kingdom

44 Russia

45 Austria

46 Taiwan

47 Finland

48 Czech Republic

49 Malta

50 Venezuela

51 Panama

52 Guatemala

53 Romania

54 Cyprus

55 Sweden

56 Hong Kong

57 Hungary

58 Bulgaria

59 Japan

60 Guernsey

61 Korea

62 Mauritius

63 Dominican Republic

64 New Zealand

65 Australia

66 United States

67 Netherlands

68 British Virgin Islands

69 Denmark

70 Switzerland

71 Israel

72 Paraguay

73 Thailand

74 Jersey

75 Curacao

76 Cayman Islands


About TMF Group

With some 7,800 in-house experts, TMF Group is a leading provider of international administrative services. It is the only company worldwide to provide the essential combination of fiduciary, company secretarial, accounting, tax and payroll services on the ground in over 80 jurisdictions for clients investing and operating globally.

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