Latin American Multinationals Held Back by Slow Tech, High Costs

Cumbersome bureaucracy and slow adoption of technology have made Latin America an expensive and complex jurisdiction for multinationals, according to a study made public Tuesday.

The Mercator report showed Latin America lagging far behind Europe and Asia in unifying and simplifying corporate governance processes. The region is, on average, 31% more expensive to operate in than Europe, the cheapest region, and 65% slower than North America, the fastest region.

• The data covered more than 180 jurisdictions representing $1.5 trillion in market capitalization. Entica, a propriety technology platform of Mercator, analyzed the data from February 2022 to January 2023.
• Complex legal processes and language barriers were additional burdens. Local authority segmentation, substantial translation obligations, and the requirement of local presence also added to costs.
• Panama emerged as the region’s best location for establishing and maintaining business in 2023, followed by Ecuador and the Cayman Islands. Panama’s merits included the availability of electronic filings, ease of incorporation and corporate decision-making and and a lack of nationality requirements for directors.
• The British Virgin Islands and Ecuador ranked as the cheapest and fastest jurisdictions respectively. El Salvador and Guatemala ranked as the most expensive and slowest jurisdictions.