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USA and China polar opposites in terms of business complexity – but
China making headway -
Brexit uncertainties impacting UK – but UK still seen as easier than
Germany and France -
Europe tops list for most complex countries – but also tops list for
easiest places to operate in
LONDON–(BUSINESS WIRE)–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 authorities. 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. www.tmf-group.com
Contacts
Damian Kerr
Director of Corporate Communications / TMF Group
[email protected]
/ +44(0)7720 783242
