Argentina is the most complicated country in the world in which to do business, while the UK and Ireland are the most straightforward, according to a study by professional services firm, TMF Group.
The firm's Global Benchmark Complexity Index ranked 81 jurisdictions across Europe, the Middle East, Africa, Asia-Pacific and the Americas according to how complex they are for multinational enterprises to operate in from a regulatory and compliance perspective. It found South America to be the most complex, accounting for the top three places and half of the index’s top 20, including Brazil, which climbed 15 places to number two in the rankings. The high levels of government bureaucracy and red tape are cited as key factors in making the local business environment in Brazil extremely challenging. For example, it can take about 54 days of work to start a business in Brazil, compared with just six days in the UK.
Argentina topped the index for the second year in a row, while Bolivia came in at number two.
The UK (including the Channel Islands) and Ireland are ranked amongst the least complex places to do business, alongside Australia, Hong Kong and New Zealand.
Poland (seventh) is the only European country to feature in the top 20 despite significant reform, thanks in part to systems and laws inherited from the former Soviet Union, according to TMF Group. Also in the top 10 were the United Arab Emirates (4th) and the emerging economies of South Korea (5th), Indonesia (9th) and Thailand (10th).
The study cited local legal systems as a key driver in the complexity of regulatory environments. Those countries that operated a civil law framework, including many South American countries, were typically ranked higher than those where common law is employed. Other drivers include economic and political turbulence.
Thorold Youngman-Sullivan, global head of corporate secretarial services at TMF Group, said: “The burden of managing various international entities continues to be a major headache for multinational companies and their boards of directors. Growing internal and external stakeholder pressure, changing regulation and the continued expansion by multinationals into new territories have all added to the compliance responsibilities shouldered by their in-house teams.
“As part of this, certain jurisdictions have changed significantly their complexity ranking from the previous year as new rules come into force, meaning that there are an increasing number of potential pitfalls waiting for those firms expanding into new territories without sufficient knowledge of the local landscapes.”