[ad_1]
LONDON, June 7, 2023 /PRNewswire/ — TMF Group, a leading provider of compliance and administrative services, has today launched its tenth edition of Global Business Complexity Index (GBCI).
The comprehensive report analyses 78 jurisdictions, which account for 92% of the world’s total GDP and 95% of net global FDI flows. It evaluates nearly 300 annually tracked indicators, presenting data on critical aspects in conducting business involving legislations, compliance, accounting procedures, tax regimes, human resources (HR) and payroll processes.
France takes the top spot in this year’s index, having placed second in the previous two years. It is followed by Greece (2nd place vs 6th in 2022), Turkey (6th vs 7th in 2022), and Italy (stays in 8th place).
Over the year, these EMEA countries experienced a significant change in their business complexity due to the legislative and economic challenges that are taking place. Foreign businesses in France are facing difficulties in terms of complex labour laws. Employers in Italy are investing more to retain their employees due to ‘the great resignation’.
The least complex European jurisdictions for conducting business are Denmark, The Netherlands, United Kingdom, Jersey, and Malta. Ranked as the second least complex globally, Denmark is straightforward with its incorporation process for businesses, paired with its political, social, and economic stability. Malta, a new entry in the ten least complex jurisdictions worldwide, is generous with its corporate tax rate and refunding system.
Frank Welman, TMF Group Head of Europe, said: “Our Global Business Complexity Index indicates how conducting business across certain European countries can be challenging, especially with the impacts of the war which are apparent throughout EU. The geopolitical and economic impacts are also felt by the neighbouring countries which contribute to increased global inflation. Hence, some countries are rethinking their strategies by simplifying regulations to retain investors for the long term, while some are still adopting a more demanding approach which then influence their positions in rankings. We hope to see more countries investing in partners and advisors that can help them navigate the evolving rules and regulations, especially when doing business across borders.”
The report identifies central themes that sculpt the global business landscape and regulatory environment.
Geopolitical and economic turbulence
The analysis highlights how geopolitical challenges are affecting the companies’ expansion plans and how global economic factors such as inflation, employee attrition and the war in Ukraine are impacting the businesses.
Since the start of the war in Ukraine, 63% of jurisdictions have predicted disruptions in ongoing supply chain, paired with increased energy prices and barriers to international trade. For instance, the drop in imported goods in Germany has contributed to the inflation globally.
This widespread inflation is analysed to be one of the contributors of decline in confidence in future economic stability which was 82% in 2020 to 71% in 2023. On the same note, approximately 98% of EMEA jurisdictions are seeing employees asking for better financial packages, pushing administrative complexity for the employers.
Global compliance challenges
The report shows how global compliance requirements such as ultimate beneficial owners (UBO), know your customer (KYC), and anti-money laundering (AML) have become more stringent and drive complexity for businesses.
KYC checks are becoming more detailed and rigorous as jurisdictions such as the UK and Hungary introduced sanctions against Russian businesses and individuals, triggering complexity for Russian-owned organisations.
However, around 14% of jurisdictions have been found to observe reversed legislation. For example, in the UK, several pieces of legislation typically related to tax, were introduced, and then reversed. Despite being beneficial, this backtracking can create complexity for organisations as they struggle to keep up with conflicting directives from governments.
Environmental, social and governance (ESG) considerations
In majority of jurisdictions where environmental, social and governance criteria are becoming more prominent, companies are now required to adhere to at least one ESG requirement. They are higher among EMEA jurisdictions than those in North America.
While the needs for reporting and abiding by ESG legislation largely falls on public and listed companies, Switzerland has introduced new rules that require companies of public interest regulated by FINMA to issue public annual ESG reports.
As for environmental sustainability and diversity, France was an early adopter of such legislation and leads the way for European jurisdictions where it mandates reporting based on diversity, including disability and gender pay gap.
Top and bottom ten (1= most complex, 77= least complex)
1 France
2 Greece
3 Brazil
4 Mexico
5 Colombia
6 Turkey
7 Peru
8 Italy
9 Bolivia
10 Argentina
69 Malta
70 Jersey
71 New Zealand
72 United Kingdom
73 British Virgin Islands
74 Hong Kong
75 The Netherlands
76 Curaçao
77 Denmark
78 Cayman Islands
Media Contacts:
SOURCE TMF Group
[ad_2]
Source link