Key Takeaways:
- France claims the top spot as the most complex jurisdiction for doing business, surpassing Brazil.
- The United Kingdom retains its position among the ten least complex countries, attracting investors despite post-Brexit challenges.
- Global compliance regulations, geopolitical and economic turbulence, and ESG considerations shape the current business landscape.
TMF Group, a leading provider of compliance and administrative services, has released the 10th edition of the Global Business Complexity Index (GBCI), unveiling the rankings of 78 jurisdictions based on their ease of doing business. The report, which analyzes 292 key indicators, showcases the evolving landscape for businesses worldwide.
France Takes the Lead as the Most Complex Place to Do Business
France has dethroned Brazil to claim the top spot as the most complex jurisdiction for doing business in the 10th GBCI report. The country’s focus on maintaining traditional ways of working, such as the use of the French language, and stringent employee protection laws contribute to its complexity. However, France’s early adoption of international legislation and subsequent stability provide investors with a clear understanding of the regulatory environment in the long run.
United Kingdom Remains an Attractive Destination Despite Brexit Challenges
The United Kingdom has retained its position among the ten least complex countries, solidifying its reputation as an attractive destination for business despite the challenges posed by Brexit. The stable environment and favorable industry support from advisors and industry groups continue to make the UK an appealing place to invest. However, certain factors, such as Know Your Client checks and new compliance regulations, contribute to the length of time it takes to open a bank account and establish a business in the UK.
Global Challenges and Their Impact on Business Landscape
The report highlights a decline in confidence regarding the economic stability of jurisdictions over the next five years, possibly due to recent global events such as the Covid-19 pandemic and the war in Ukraine. Disrupted supply chains, increased energy prices, and trade barriers have made doing business more challenging, especially across borders. Businesses are becoming more cautious about global expansion, leading to a potential decline in optimism for the coming years.
Global Compliance Challenges
Jurisdictions are observing a tightening of global compliance regulations, such as Know Your Customer (KYC) and ultimate beneficial owner (UBO) reporting, due to geopolitical tensions. The rapid implementation of regulatory changes can increase complexity, influencing companies’ expansion goals and encouraging them to seek more attractive jurisdictions. Compliance requirements continue to grow, placing an additional burden on businesses to navigate and report in a timely manner.
Environmental, Social, and Governance (ESG) Considerations
The prominence of ESG criteria is increasing, with companies required to abide by diverse regulations across jurisdictions. Reporting on employee demographics and diversity is a common requirement, with the expectation that reporting requirements will continue to expand. The cost implications and resource requirements associated with ESG reporting pose challenges for large and listed companies, while the future impacts of ESG reporting remain uncertain.
As the business landscape continues to evolve, understanding the complexity of jurisdictions becomes crucial for investors and companies aiming to expand globally. The GBCI report provides valuable insights into the current state of affairs and enables businesses to make informed decisions.
About TMF Group
TMF Group is a leading provider of critical administrative services, offering accounting, tax, payroll, fund administration, compliance, and entity management services to clients worldwide. With offices in 85 jurisdictions and serving clients from diverse sectors, TMF Group simplifies the complexities of global business. Their expertise and global presence make them a trusted partner for businesses navigating the challenges of international operations.
As the world recovers from the Covid-19 pandemic and faces geopolitical tensions, trade and investment remain vital for economic growth. The GBCI report sheds light on the ever-changing global business landscape and helps pave the way for streamlined and successful international operations.
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