GLOBAL BUSINES SCOMPLE XIT Y INDE X 2022
Paths to growth: navigating
the complexities of doing
business across borders

CONTENTS
Foreword

1

Highlights

Introduction

2– Accounting and tax

30– Global entity management38– Payroll and human resources

42

Ten least complex jurisdictions

46

Complexity and the flow of FDI

52

Conclusion

53

Methodology

54

Glossary

55

Global highlights– Emerging from Covid-19

4– Simplification: drivers and barriers

10– The rise of ESG

16

GBCI rankings 2022
Ten most complex jurisdictions

22
24

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

1

FOREWORD

We at TMF Group are delighted to be able to bringyou our 2022 Global Business Complexity Index,
looking at differences in the rules and requirements
for doing business in 77 jurisdictions around theworld. Those jurisdictions cover just 32% of thetotal country count, but capture the world’s largest
economies and investment hubs, representing 71%
of world population, 92% of world GDP and 95% of
net FDI inflow. We look at nearly 300 factors in eachcountry, making this a significant team effort within
TMF Group for which my colleagues have my deep
appreciation.
At the time of writing, the world is in an unsettled
state. Covid-19 remains a critical feature, in particularin China where strict lockdowns are in force anddepressing local and global growth. To that we now
add conflict with the war in Ukraine, the sanctions
and energy price impact again adding to a negative
economic outlook for much of the world economy,
with the prospect of a return to the ‘stagflation’of the 1970s.
Against that backdrop, we need to do all we can tosimplify the path to investing and operating aroundthe world. Low friction trade and investment stimulate

economic growth. We hope that the report will help
investors pick and manage their destinations withgreater confidence. Our message isn’t to avoid
investing in complex jurisdictions, as these are often
among the most attractive for talent and customer
opportunities. Rather, it is to invest with eyes
open and be ready to manage the rules that mightotherwise put your licence to trade at risk.
Similarly, we hope the work will encourage
governments to reform, to attract greater investment
and local capital formation. As in previous years, anumber of the least complex places to operate aresmall, offshore economies. All are regulated andtheir simpler processes are more a result of thecompetition between them to attract investors, driving
process efficiency, rather than any cutting of corners.
In addition to individual jurisdiction complexity, manyof our clients have to cope with managing long tailsof locations around the world, often at low scale andin complex places to do business. This year we areinvesting to make our source data available to themin digital format, to give them the means to stay on
top of their portfolio.

Mark Weil
TMF Group CEO





2

INTRODUCTION

1Emerging from
Covid-19

The Global Business Complexity Index 2022 (GBCI)
provides an authoritative overview of the complexityof establishing and operating businesses aroundthe world. It explores factors driving the successor failure of international business, with a focus on
operating in foreign markets, and outlines key themes
emerging globally as well as local intricacies across77 jurisdictions.
The GBCI 2022 is based on 292 different indicators
relating to business complexity, and provides indepth analysis of the global and local challenges
that impact on the ease of doing business aroundthe world. These data points are used to compile
a global ranking of the 77 jurisdictions, based on
the complexity of their business environments
and covering legislation, compliance, accounting
procedures, tax regimes, human resources (HR) rules
and payroll processes.

3

GLOBAL
THEMES

We explore whether Covid-19
accelerated existing trends andask: are changes to legislation andpractices that resulted from thepandemic here to stay?

2
Simplification:
drivers and barriers
By comparing different
jurisdictions we identify what’s
driving simplification for global
business, and any barriers that are
making things more complex.

3
The rise of ESG
We examine the impact ofEnvironmental, Social andGovernance (ESG) criteria on
corporate behaviour and ingovernment legislation andguidance.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

3



4

GLOBALTHEME#1

EMERGINGFROMC O V I D -19

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Requirement to pay corporation/income tax

4%
82%

4%
14%

77%

2022

– It is compulsory 		
for all companies

3%
19%

2021

– It is compulsory 		

for some companies

We saw in last year’s GBCI report that many
governments had introduced measures
to alleviate pressure on businesses
during the pandemic. These included tax
exemptions, increasing employee rights andthe acceleration of digital reporting. Thechanges were introduced to lessen financial
or administrative stresses but often led tohigher complexity for businesses.
As the world emerges from the pandemic
we have found that some of these changes
are here to stay but many were short-term,
adaptive measures which have been, or
are in the process of being, reversed. Thishas once again introduced short-term
complexity for businesses. For example,
in Brazil, which ranked top in the 2021 and2022 GBCI rankings, complexity has been at
an all-time high over the last two years dueto the introduction and subsequent reversalof pandemic-related regulations.

– Companies are not required
to pay this type of tax

81%

17%

2020*

* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

Pandemic tax exemptions reversed
Last year we saw a reduction in the number ofjurisdictions where all companies were required to pay
corporation/income tax. GBCI 2022 shows that this wasa short-term measure, with the proportion of jurisdictions
where it is compulsory back up to 2020 levels.
New Zealand’s government was particularly progressive
and supportive in its response to Covid-19, introducing avariety of measures to support businesses. For instance,
the authorities introduced the ability for businesses to
pay outstanding tax in instalments, or have it written
off completely in the case of serious hardship. These
measures are still in place but will most likely come toan end.
Property tax payments on business premises also
reduced in frequency during the peak of the crisis. In
2021, just over a quarter of jurisdictions required some or
all companies to pay the tax at least every three months.
This compares to one in three jurisdictions in 2020 andhas since rebounded to 2020 levels.

5





6

E M E R G I N G F R O M C O V I D -19

Frequency of property tax payments requiredon business premises for some/all companies

8%

11%

9%

2022
12%

14%

46%

 Every time a transaction happens
 Once a month or more5%

 Once every 1 to 3 months
 Once every 4 to 6 months

8%

14%

2021

 Once every 7 to 12 months
12% Less than once a year

* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

9%

5%

53%

8%

8%

2020
17%

11%

51%

Temporary measures to protect
employees in 2021
During the height of the pandemic, many businesses
were considering reducing their workforce due todecreased revenues and fears for survival. Governments
around the world identified that it was crucial for
unemployment levels to remain as low as possible. As
such, many introduced temporary relief programmessuch as the ‘furlough’ scheme in the UK, or ‘chômage
partiel’ in France, to encourage businesses to keep theirstaff employed.

The ability to fire employees without a reason
75%
25%

2022

80%
20%

As well as these supportive schemes, somegovernments went a step further, introducing legislation
to force the hand of companies. In 2021, we saw
employee protection rights temporarily strengthened,with the ability to fire an employee without citing areason reducing to only one in five jurisdictions.
In Italy, emergency pandemic laws called the ‘cura
Italia’ came into force which made it illegal to fire any
employee, even with a valid reason. In South Korea,
the government made it practically impossible to fire
employees. This, coupled with South Korea’s maximum
52-hour working week, makes the business environment
more complex and legislation around firing employees
remains strict in 2022. The Labour Standards Act(LSA) mandates that any company with more than five
employees must have a fair reason for terminating an

2021

71%
29%

2020

– Cannot fire without citing a reason– Can fire without citing a reason

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

The option of remote working for permanent employees
2022
6% 1%

2021
30%

13%

8%

62%
NET: Required/offered

16%

26%

1% 9%

64%

31%

– Legally required

2020

64%

23%

– Not legally required
but is standard in
most industries

10%– Not legally required
but is standard insome industries– Rarely or never 		offered* Total is not 100 because individual percentages
are rounded to the nearest whole number.

employee. It is also mandated that businesses pay
redundancy to any fired employees.
The peak of the pandemic saw an increase in companies
offering, or being required to offer, paid sick days totheir permanent staff, from 89% of jurisdictions in 2020
to 95% in 2021. This year, we’ve seen pay for sick days
drop back down to 90%, meaning that in one in ten
jurisdictions permanent employees don’t receive pay if
off work due to illness.
The Danish government reimbursed companies fortheir employees’ sick days throughout the height of thepandemic. This proactive measure led to an increased
administrative burden to recoup funds, and in extreme
cases led to an increase in fraud and subsequent fines.
Yet, during the height of the pandemic, some financial
benefits were deprioritised. The requirement forcompanies to offer pension funds was relaxed, droppingfrom 58% of jurisdictions in 2020, to 48% in 2021. This
was a temporary change, and it has since rebounded to
pre-pandemic levels.

Flexible working will outlive the pandemic
The pandemic has caused a major and long-term shift
in working patterns. Many governments mandated theclosure of offices in the initial stages of the pandemic,

and workers had to set up office from home. In 2021,
we saw almost one in four (23%) jurisdictions offering,or being legally required to offer, the option for remote
working as a benefit for permanent employees, up from
10% in early 2020.
While offices are reopening or have reopened, thetrend for remote working has increased, to the point
where it’s legal or standard in most industries in 31% ofjurisdictions. It is evident that employees have adapted
well to working from home and proven that a remote
workforce can be effective, and even beneficial in many
ways. Businesses have recognised the potential foroverhead cost savings, and have identified the necessity
to offer flexible working arrangements in order to retain
their workforce and attract talent.
The rise of remote working does have tax implications,however. For example, in the USA, if an employee isworking in a different state to that in which the company
is registered, they must adhere to the tax regulationsin the state in which they are working. This was not thecase during or before the pandemic, but post-pandemic
legislation has been passed because remote working ishere to stay.

7





8

E M E R G I N G F R O M C O V I D -19

Director local residency requirements

2022
23% 5% 3%

NET: At least one director– None of the directors

must be locally resident

2020

2021
69%

19% 3% 4%

31%

74%

26% 4% 1%

26%– Only one of the directors

Nearly a third ofjurisdictions now require atleast one company director
to be locally resident

is required to be locallyresident as a minimum

69%

31%

– More than one of thedirectors are required to
be locally resident – but
not all of them

– All directors are 		

required to be locallyresident

Temporary shift to moreinternationalised regulations
During the pandemic, many governments temporarily
relaxed rules when it came to director residency andshare transfers from one entity to another.
In 2021, we saw an increase to 74% of jurisdictions not
requiring any company directors to be locally resident.
Yet in 2022, this returned to the same level as 2020, with
only 69% of jurisdictions allowing this – so nearly third ofjurisdictions now require at least one company director
to be a local resident.
In Sweden, having a local resident as a company director
brings real benefits, including driving business simplicity.
BankID is a key aspect of operations, which only local
residents with a Swedish personal number are able toaccess. Opening a bank account, making payments,
logging-in to digital mailboxes and receiving mails from
authorities all require a BankID.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Shares being freely transferred fromone entity to another

12%

5%
88%

2022

– Shares cannot be freely transferred 		from one entity to anotherIn 2021 there was also a temporary relaxation ofcompany shares being freely transferred from one entity
to another. In 2021, only 5% of jurisdictions didn’t allow
this, yet 2022 has seen a return to 2020 levels, with 12%
once again restricting the free transfer of shares.

Digitalisation of reporting has
accelerated and is here to stay
The final major change brought about by Covid-19
has been the accelerated digitalisation of reporting
processes. Many countries were forced to adjust theirdigitalisation trajectories, and this has yielded variedlevels of success. For example, in Turkey, the expeditingof digitalisation has led to divergent approaches
from different authorities, rather than the adoption ofcentralised processes, therefore causing confusion
and overcomplication for companies that are required
to use them. There is no evidence to suggest that thecentralisation of these platforms will happen soon.
In Greece, where digitalisation has been introduced,
business complexity has seemingly shifted into the

12%
95%

2021

88%

2020

– Shares can be freely transferredfrom one entity to anotherdigital sphere, rather than being reduced by it. For
instance, organisations can in theory incorporate abusiness online. However, this process must conformto an online template, and if any circumstances arisethat require deviation from this template, business
representatives will need to visit a notary in person.
Only an estimated 10% of businesses have been able
to incorporate using the online template with no changes.
So, even though the effort to reduce the complexity
is there in theory, in practice it’s not working for 9 out
of 10 users.
At the other end of the spectrum, Jersey’s digitalisation
journey has been a success, reducing the need for faceto-face interaction between businesses and government
bodies, making doing business significantly easier.

9





10

GLOBALTHEME#2

S I M P L I F I C AT I O N :DRIVERS ANDBARRIERSGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Political, economic, and social stability over the next 5 years(% agreeing their jurisdiction will be stable)

Politically stable
6% 8%

18%

Economically stable

30%

5% 6%

38%

18%

25%

10% 1%

45%

27%* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

43%

18%

NET likely 2022

68%

70%

70%

NET likely 2021

73%

73%

77%

NET likely 2020

71%

82%

77%

– Very likely– Likely– Neither likely or unlikely

By examining historic GBCI data and thatgathered in 2022 we have identified several
common characteristics, or drivers of simplicity,that tend to make a jurisdiction a more businessfriendly environment. Those lacking thesehallmarks are typically more complex places to
do business.
Drivers of simplicity:••••

Socially stable

political, social and economic stability
digital literacy
open and defined laws and legislationinternational alignment.

Political, economic and social stability
Over the past two years the global political, economic
and social environment has faced unprecedented
uncertainty. The Covid-19 pandemic has had an impactthat will last for many years. However, other factors,
including geopolitical tension between China and the US,
and the Russian invasion of Ukraine, have increased theclimate of uncertainty. This has led to more local experts
predicting instability over the next five years.

– Unlikely– Very unlikely

Political stability
This prediction has remained the most stable factor since2020. However, there have been some regional changes.
In 2020, 60% of TMF Group experts in South America
predicted that over the next five years their jurisdiction
would be politically stable. This has dropped to just 30%
in 2022. Jurisdictions driving this shift in the region
include Argentina, Bolivia, Peru, Honduras, Venezuela,
and Chile.
Our experts in Peru report that, following the electionof President Pedro Castillo in July 2021, Peru has been
experiencing uncertainty. Castillo’s term comes after
six years of political insecurity including temporary
and caretaker governments and widespread politicaldissatisfaction. Other jurisdictions in the region, such as
Colombia, have elections in 2022 that impact the politicalclimate. The Chilean government is also rewriting its
constitution, which increases business uncertainty.

Economic stability
Since 2020 this area has seen the biggest drop in
confidence among experts, with an increasing number
predicting economic instability. Covid-19 has been a clear

11





12

S I M P L I F I C AT I O N : D R I V E R S A N D B A R R I E R S

factor. As we emerge from the pandemic inflation crises
are to the fore in many jurisdictions.
In previous GBCI reports we have observed inflation
issues in many South American jurisdictions. However,following the pandemic, EMEA, APAC and North America
are also finding themselves facing inflationary pressures.
In New Zealand, during the Covid-19 pandemic thegovernment supported businesses and individuals,
offering generous packages. Although a great help tothose operating and living in the jurisdiction, this has
also added to the rate of inflation, as TMF Group expert
Vincent Gin explains:

Digital literacy
Globally the way businesses operate and incorporate
is becoming increasingly digitalised. In some places
this has been accelerated by the Covid-19 pandemic.
However, many jurisdictions are turning to technology tomake their jurisdiction less complex and more attractive
to foreign businesses and investors.
For instance, since 2020 the percentage of jurisdictions
where all relevant authorities are automaticallynotified following incorporation has risen by 10%. Thissignificantly reduces the administrational burden on
businesses.

“A consequence of this governmental support is that
inflation increases. We're pumping so much more money
into the economy that it's boosting and inflating prices aswell. There are other elements involved, of course, but it’sa major contributory factor.”

Over the past year, Jersey has become simpler in our
GBCI ranking, moving from 45th most complex in
2021 to 72nd in 2022. A key factor is the technologicaladvancements that have facilitated contact between
businesses and the relevant governing bodies.

Turkey has been experiencing hyperinflation following
the pandemic. This has created a need for businesses
operating in the jurisdiction to apply for hyperinflationaccounting which will come into place from next year,
adding to complexity. However such inflation does makethe jurisdiction more attractive for some investors as
Turkey is a more affordable market.

Since 2020 we have also observed a steady rise injurisdictions mandating the need to issue tax invoices inan electronic format.

Social stability
Regionally the predicted reduction in social stability
is driven by South America and EMEA. In EMEA there
have been widespread changes in mood. Since 2020,
the following jurisdictions have predicted that they willbe less socially stable than previously: Greece, Turkey,
Hungary, Poland, Italy, Czech Republic, Ukraine.
It should be noted, research for this report was
conducted before the Russian invasion of Ukraine took
place. So, the Ukrainian prediction of less social stability
is not necessarily linked to the crisis. However, it isimportant to consider how expert opinion on political,
social, and economic stability may change now we’reable to more clearly understand the crisis. It will be key toconsider the war currently being fought in Ukraine whenlooking at foreign business investment, incorporationand operation.

In 2022 more than half (51%) of jurisdictions have made it
compulsory for tax invoices to be issued in an electronic
format, compared to only 38% in 2020. Looking at
the jurisdictions we observe year on year to be thesimplest, we see that they tend to have a longstanding
commitment to digitalisation. These include Denmark,Curaçao and the BVI.
Although, over time, digitalisation can drive simplicity andbe a benefit for foreign businesses, many jurisdictions
report an initial ‘hump’ of complexity while governments,
bodies and businesses adapt to new digital processes.
For example, since 2020 India has become graduallysimpler in our index, falling from 18th most complex to25th in 2022. Its economy has become more digitalised
in recent years, and although this does make thejurisdiction more attractive to investors, businesses
need to get used to operating in this new way.
“We’ve seen a big digital push over the past five years.
We have more e-filings in place, which I think the world
started to bring in around a decade ago. Back then wewere lagging behind, but now we’re catching up. I still
remember a few years ago when I would go and line up
to file a payroll report. The next day I’d have to go backand queue up again to collect it. It’s very different now.”– TMF India expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Automatic notification of relevant authorities
following incorporation
48%

51%

36%

65%

14%

16%

2022

–

6%

35%

29%

2021

–

Yes – all relevant authorities
are notified automatically2020

Yes – some relevant authorities
are notified automatically–

No – relevant authorities
are not notified automaticallyCompulsory issuing of tax invoices in electronic format

2022
8%

42%

NET: Compulsory

2021
25%

12%

26%

47%

51%

– Compulsory 		
for all companies

2020
17%

24%

41%

– Compulsory 		* Total is not 100 because individual percentages
are rounded to the nearest whole number.

for some companies

16%

46%

20%

18%

38%

– Not compulsory– Not applicable

13





14

S I M P L I F I C AT I O N : D R I V E R S A N D B A R R I E R S

Types of guidance available from local authorities on how
to abide by local rules and regulations

 2022

Telephone helpline

Online guidance 2020

Advice on managing entity
82%
79%
83%

90%
87%
87%

Advance pricing
agreement (APA) 2021

Complianceassurance programmes
29%
30%
27%

30%
35%
30%

Other

29%
30%
27%

19%
13%
22%

None of these
5%
6%
4%

Open and defined laws and legislations
Jurisdictions where laws and legislation are clear and notopen to interpretation tend to be simpler, often because
government actively seeks to help businesses adhere to
the regulations they put in place.
Now 90% of jurisdictions offer online guidance to help
businesses abide by local rules and regulations. Only 5%
report that there is no on- or offline guidance in place tosupport organisations, demonstrating a more supportive
approach.
Some jurisdictions take this further. In Ireland, forinstance, the government works with key stakeholders,
including businesses, to shape rules and regulations sothat they work well for those impacted by them.
“The Irish government and regulators try to collaborate
with you to make something work. They'll say no if they
won’t help, but they will consult with companies to makethings happen.” – TMF Ireland expert
However, jurisdictions aren’t always helpful whendeveloping rules and regulations. Greece continues
to be complex, ranking 6th this year, driven in part byconstantly changing and unclear legislation. There arearound 150-200 new laws and 1,500-2,000 decisions
made related to tax each year.
In China, at the end of 2021, there was a U-turn on new
tax laws that would have impacted expatriates working
in the jurisdiction. This decision was announced at
a late stage, meaning many foreign businesses had

already changed processes and procedures to meetthe requirements of the tax. Such decisions create
administrative burdens for foreign businesses.
“On 31 December 2021, the government actually madea U-turn relating to regulation that had been announced
two years ago. If you see this kind of unexpected change,
you will make businesses quite nervous, what will be
next?”– TMF China expert
Governments put in place penalties in the case of
misdemeanours, such as for submitting inaccurate tax
calculations, with 97% of jurisdictions now opting forfines in the case of inaccurate tax filings.
India has recently taken a progressive approach by
removing penalties for directors to encourage them to
be more open and transparent, resulting in businesses
feeling supported.

International alignment
For businesses seeking to incorporate and operate
across borders alignment is key, allowing them tooperate in a similar manner across multiple jurisdictions.
Adoption of international standards such as CRS andFATCA has been growing in recent years, reflecting a
steady global move towards transparency.
Since its introduction in 2014, CRS has been adopted by
86% of jurisdictions globally. It mandates the exchange ofGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Penalties for inaccurate tax filing calculationsFine 2022

Imprisonment
17%
22%
24%

20%
25%
13%

Licence suspension

18%
18%
8%

 2020

Suspension of activity

97%
95%
93%

Prevention from doing
further business 2021

Other
14%
13%
16%

17%
14%
9%

None of these
3%
1%
3%

Committed to exchange of
information under CRS

Commitment to
FATCA Model 1

82% 83% 86%

76% 81% 82%

Committed
to CRSfinancial institution information between jurisdictions andincreases transparency. A standardised approach means
a foreign business operating in a CRS jurisdiction faces
limited complexity adhering to it in other jurisdictions.
The slight increase in adoption of CRS has largely been
driven by changes in South America. In 2020, 60% ofjurisdictions in the region adhered to CRS, jumping to
89% in 2022. Ecuador and Peru are among jurisdictions
to have adopted it since 2020.
Similarly, adoption of FATCA Model 1 has steadily
increased since 2020, while commitment to FATCA under
IRS has steadily decreased. FATCA, like CRS, encourages
the sharing of information between jurisdictions.
Increased commitment to FATCA demonstrates arise in transparency and global alignment.

 2021

69% 66% 65%

Local language
is mandated

Committed

 2022

Mandate to maintain accounts
in local language 2020

Another way that jurisdictions can be internationallyaligned is through local language requirements, or a lackthereof. Businesses seeking to incorporate and operate
in foreign jurisdictions can find it simpler if paperwork,
tax filings and interaction with bodies can be facilitated ina language they speak such as English or Spanish.
Despite this gradual shift towards delocalising language
requirements, jurisdictions such as Slovakia still
stipulate that business must operate and report in thelocal language. The government portal for electronic
communication is in Slovak and can be accessed only
via national ID or a special ID card that takes a relatively
long period of time to acquire. This creates complexity
through the need to enlist local support to overcome thelanguage barrier.

15





16

GLOBALTHEME#3

THE RISE OF
E N V I R O N M E N TA L ,SOCIAL AND
GOVERNANCE(E SG)GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Globally ESG is becoming more of a
focus for business. However, despite theincrease in interest, legal enforcement of
ESG practices is not yet in place for aroundhalf of jurisdictions. This is especially thecase outside the EU. ESG regulations havealready been handed down to EU member
states. For those that do not have legal
enforcement of ESG regulations, mostjurisdictions’ governments offer guidance tocorporations, especially large ones, which
they are expected to follow and use as
guidelines.
There is currently a lack of internationalalignment outside of the EU, meaning theapplication and impact of ESG is difficult
to measure and compare, particularly whenit comes to complexity. Although ESG
is on the rise globally, jurisdictions suchas France have been leading the way formany years, whereas in the Americas ESG
regulatory uptake has generally been slower
with jurisdictions such as Colombia only
recently introducing legislation.

Outside the EU, countries have taken similar steps
to define their own sustainable finance framework.
Canada and Australia have set up taskforces to deliver
proposals to define regulations at national level andare coordinating their work with the EU through theInternational Platform for Sustainable Finance. Australia
has made a sustainable finance taxonomy a priority
in 2022.
A major driver of ESG practices and sentiment is thedemand from companies, consumers andprivate investors for more ethical and sustainable waysof doing business, rather than an enforced legal driveby governments.
In jurisdictions where there is no legal enforcement of
ESG practices, stakeholders are driving expectation forcompanies to have these policies in place.
For China, the situation is more advanced as theirtaxonomy was already in use prior to the EU defining
their own. Towards the end of last year, the two
taxonomies were laid out for comparison to identify
commonalities and the main differences. The aim wasto develop a ‘common ground taxonomy’, increasing
interoperability of taxonomies around the world andaiding investors.
“ESG is increasingly on the radar of the state, with thefocus on state owned and public companies”– TMF China expert

EU ESG regulations
Sustainable Finance Disclosure Regulation (SFDR)
SFDR requires financial market participants (FMPs) tocategorise their investment funds managed or marketed in
the EU on a sustainability scale and was applied across the
EU in March 2021.

EU taxonomy
This recently applied directive aims to classify investmentsthat are sustainable, and direct investments towards
sustainable projects and activities. It provides companies,
investors, and policymakers with appropriate definitions
for economic activities to be considered environmentally
sustainable. It should help investors avoid greenwashing,allowing companies to become more climate friendly,
mitigate market fragmentation and shift investments
towards the fight against climate change.

Reporting in line with the
EU regulations and taxonomy being
implemented in national law fromspring 2022 applies to bigger
corporations and financial institutes,
such as banks and insurance companies.
We expect this to be a lasting change.
TMF Norway expert

EU law is being transposed locally,so ESG is definitely here to stayand is becoming more relevant.
TMF Cyprus expert

17





18

T H E R I S E O F E N V I R O N M E N TA L , S O C I A L A N D G O V E R N A N C E ( E S G )Changes in private wealth and family office clients looking to…

Invest in a moreenvironmentallyfriendly way
30%

NET: Increase– Significant increase

13%

Invest in a waythat improvessocial outcomes
57%

43%

70%

– Slight increase

5% 9% 43%

Invest in companies
or funds that aregoverned responsibly
30%

52%

– No changes

Environmental“What we see is that most of these [ESG] trends are
driven by suppliers, by investors, by the corporate world.
And less so by governments themselves.” – TMF Groupaccounting and tax expert“ESG is definitely a hot topic. How much of it gets
instituted is yet to be seen.” – TMF US expert
Typically, environmental legislation target large
corporations, and sectors that contribute negatively
to the environment, such the those exploiting natural
resources. However, more companies, regardless of
size or industry, are now expected to have sustainabilityon their agenda. Given the rise in environmental
consciousness, the expectation for companies to think‘green’ is firmly on the agenda.
As with broader ESG regulations, the adoption of green
legislation is not mandatory in all regions, though in the
EU is it compulsory for large companies and financial
market participants. At a jurisdictional or country level,some consider themselves a leader in the environmental
sustainability space, whereas others refer to legislationthat governments are only starting to adopt.

13%

57%

70%

– Slight decrease– Significant decrease

Guernsey and Jersey are two of the jurisdictions leadingon environmental sustainability in the funds space. The
Guernsey Green Fund Initiative sets out guidance forfund sponsors and limited partners (LPs) in structuring
a legitimate green fund. In Jersey, the authorities haveintroduced ESG-related legislation for funds and fundservice providers, to combat the risk of ‘greenwashing’.
Private wealth and family office services are
increasingly taking environmental practices into
consideration. Clients have been increasingly investingin environmentally friendly practices over the past year in
70% of jurisdictions.
In Indonesia, ESG legislation requires that all publicly
listed companies and those under the supervision of theIndonesian Financial Services (OJK) submit an annual
sustainability report. Such requirements can add tocomplexity for those starting out on their ESG journey.
Some governments are also at an early stage of their
engagement with ESG, with many only just adopting
environmental initiatives and guidelines. In December
2021, for example, Colombia introduced a law for
the creation of life areas and forests, while Turkey’s
government introduced a recycling packaging law as
recently as September 2021.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

At a global level, environmental legislation is being
enforced at a relatively slow rate. In the case ofaccounting and tax, governments are less keen to
enforce green and sustainability taxes, as they do nothave a large impact on government revenue, so will
choose to tackle other taxes as a priority.
“We see an increase in the introduction of green
sustainability taxes, but it's not something that advances
very fast. Probably because of all the other challenges
that we are talking about, such as Covid-19 and theneed to raise corporate income tax rates and VAT. With
green taxes or sustainability taxes, the impact upon thegovernment revenue is not that big. Therefore, since theauthorities need money to fund their government spend,
it's more likely that they are going to focus on the bigticket taxes.” – TMF Group accounting and tax expert
A lack of international alignment on environmental
legislation and reporting means additional layers ofsustainability reporting at a jurisdictional level can add
complexity and challenges for companies looking to dobusiness across borders.

SocialAs we’ve seen with sustainability initiatives, there is anincreasing global focus on socially minded regulations

that aim to support and protect employees.
Certain HR-related benefits that companies are legallyrequired to offer permanent employees have increased
compared to previous years. For example, healthinsurance (58%), childcare assistance (31%) and housing/social care contributions (27%) are all more likely to belegally required in 2022.
Companies are also required to submit reports andinformation related to equality, covering areas such as
gender pay gap and disabilities, in more jurisdictions –up to 26% in 2022 from 9% in 2020.
The requirement to submit employee demographic
reports to government authorities has also increased
year-on-year, from 28% in 2020 to 47% in 2022. In termsof the frequency of submissions, half of jurisdictions(51%) state that employee demographic reports are
submitted at least once every three months, while 36%
indicate the same cadence for gender pay gap reports.
The upward trend in employee statutory reporting anddata gathering was discussed by TMF Group payroll andHR experts Adele Ewing and Gary Wright:“On the HR side, people want more information about
people's circumstances, eg disability, hours they work,
gender pay gap reporting. All of this has really ramped up

Reports on employees that companies are required to provide togovernment authorities for all organisations

Employeedemographics

Equalities reporting(gender pay gap,
disabilities)

47%

41%

28%

26%

8%

9%

19





20

T H E R I S E O F E N V I R O N M E N TA L , S O C I A L A N D G O V E R N A N C E ( E S G )over the last five years or so. Also, a lot of countries also
want to understand the compound differences between
the salaries of the chief executive and the lowest paid
person in the organisation. So, we're having to produce a
lot more data.”
These reports are growing in importance and relevance,
but they add to the complexity of doing business in ajurisdiction.
As with ESG, some locations are considered ‘leading’jurisdictions in the social space. In France, for example,
there is mandatory reporting based on diversity, disability
and the gender pay gap. Disability reporting is requiredfor companies with as few as 20 employees, with gender
pay gap reporting obligatory for those with 50 or more
employees (50 is also the minimum in Portugal).
“For the gender balance, there's a yearly mandatory
report and if it's not filled, you're going to have fines. So,
it's pretty easy to track.” – TMF France expert
In Croatia quotas have been set for employing people
with disabilities. An employer that does not comply is
obliged to calculate and pay a monthly fee – 30% of theminimum wage for each person with disabilities they
were obliged to employ to meet the quota.
Other jurisdictions have recently adopted employment
legislation to address diversity and inclusion. In
Colombia, the government introduced the first law of
its kind in December 2021, with companies receiving
incentives to hire young people or women.

Governance
The final element of ESG covers corporate governance.
There has been a trend for greater corporate
responsibility and transparency, especially for larger
organisations, and even state-owned companies.

individuals holding private wealth there to disclose
their identity to relevant authorities. Transparency
for investors is a global trend, but for some investors
maintaining a level of privacy is important. For wealthy
individuals from South American jurisdictions, investingin jurisdictions such as Curaçao and the BVI can help
them to protect their assets and safety. Such individuals
could be at risk if criminals and gang members in theirown jurisdictions were made aware of and had potential
access to their wealth.
“Being close to South America, and with the constantpolitical unrest in certain jurisdictions, South Americans
want to make sure that their assets are safe. So, they
will put them in offshore entities. Not to avoid tax, butjust to make sure that they cannot be taken away by thegovernment. Also, they are putting their assets here sothat local banks cannot share information with criminals,
so it's really also about safety.” – TMF Curaçao expert
Three quarters of jurisdictions (76%) report that
directors of Special Purpose Vehicles (SPVs) can be held
personally liable for business obligations, linking to afocus on transparency and a focus on adherence to local
laws and legislation.
This year’s research highlights transparency
requirements for publicly listed companies are also
on the rise. For example, since 2020 in the Philippines
publicly listed companies are required to submit amanual on corporate governance. This focuses on
governance responsibilities, disclosure and transparency,
internal controls and risk management, relationships withshareholders and duties to stakeholders.
In Brazil companies are increasingly talking about theirfocus on good practice and transparency: “Brazil has arecent history coming from corruption and confrontation,
which has propelled a lot of positive reactions fromrelevant market players towards ESG. We see companies
publicising their good practices and we see goodresults.” – TMF Brazil expert

In the case of providing Ultimate Beneficial Owner (UBO)
and/or person with significant control (PSC) information
to a central register, there is an increasing requirement
to maintain this information at the company’s registeredaddress, rising from 48% in 2020 to 55% in 2022. The
requirement to make UBO/PSC information accessible
to the general public has also risen, from 24% in 2020 to
29% in 2022.

We have seen, and will continue to see, an increase in thekind of legislation currently being introduced in Europe,
covering areas such as whistleblowing, anti-corruption
and good governance. Not only is there an increase inthis type of legislation, but there is an upward trend of
this type of transparency to be expected by externalclients and investors.

Furthermore, three quarters (74%) of popular private
wealth and family office (PWFO) jurisdictions require“Firms are becoming much more interested in who
they're doing business with and making sure they'reGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Requirement for PWFO individuals to disclose their identity
to relevant authorities
74%

26%

 Required Not required

Directors of Special Purpose Vehicles (SPVs) held personallyliable by the authorities for business obligations
76%

18%

6%

 Directors are personally liable Directors are not personally liable Not applicableaffiliating themselves with firms that have similar values
and ethics, and ethos around how we treat people, how
we treat the environment, and making sure that wehave high standards for ourselves as part of the global
community. Our clients typically report straight to theboard on who they deal with, who they interact with, andthey want to make sure that who they're doing businesswith has similar values and expectations.” – TMF Group
global entity management expert

How will ESG impact complexity?
It may be too early to say how this increased focus on
ESG will impact businesses. However, ESG reporting
requirements will increase complexity. Companies will
have to implement ways of monitoring elements such as
their carbon footprint, employee demographics, and whothey invest in and with.
“I think ESG will make things more complex. If you're
looking at the bigger clients who will have to give ESG
reporting, it's new metrics that they haven't necessarily
gathered together before.” – TMF UK expert
However, if ESG practices align on a global level, as they
have done for EU jurisdictions, ESG reporting could bea uniform step forward for everyone, having a minimal
impact on complexity.
“I think the more that ESG becomes part of our standard
approach to business and building our business
relationships, the more we standardise it, the easier it will

become. So, in that sense, I would say it could actually
make things easier for us. The other side of the coin isthat the more we integrate ESG, it's another hoop to jump
through and another level of due diligence to add to ourprocesses. I think it could go both ways, but I do tend toerr on the side that it could actually help to simplify as westandardise.” – TMF Cayman Islands expert
With consumers, investors, and companies expecting
organisations to have ESG practices in place, a changeof culture is likely to take place globally. A step towards
international alignment on ESG could mean that the
impact on complexity is minimal, given all jurisdictions
will have a similar experience.
“What you see more is the sentiment. Big concerns
about big banks saying, 'We don't provide loans anymore
for companies that are investing in oil or gas.' They want
to start a new wave and invest in a new energy that ismore sustainable for the future. That's a very importantchange compared with last year. The more significant
companies are also investing in that, and they havepolicies in place. They're forced by the law, but they
are also really taking concrete actions to make sure weare compliant with those laws and regulations. I find it
really positive. What you are really seeing is a change inculture. I think that's a good step forward.”– TMF Netherlands expert

21							22THE GLOBAL
BUSINESSCOMPLEXITYINDEX
RANKINGS 2022

2022

PAGES

24–29

TEN MOST COMPLEX JURISDICTIONS



2021

2020

1 – Brazil		

(1)

(2)

2 – France		

(2)

(12)

3  Peru		

(24)

(23)

4  Mexico		

(3)

(13)

5  Colombia		

(4)

(8)

6  Greece		

(13)

(5)

7  Turkey		

(5)

(11)

8  Italy		

(15)

(36)

9  Bolivia		

(8)

(4)

10 – Poland		

(10)

(34)

11  Indonesia		

(6)

(1)

12  Argentina		

(7)

(3)

13  Sweden		

(52)

(38)

14  China		

(12)

(6)

15  Chile		

(40)

(64)

16  South Korea

(11)

(17)

17 – Belgium		

(17)

(19)

18  Nicaragua

(14)

(7)

19  Paraguay		

(58)

(33)

20  Germany		

(27)

(40)

21  Venezuela

(33)

(52)

22 – Malaysia		

(22)

(9)

23  Austria		

(38)

(41)

24  Kazakhstan

(16)

(25)

25  India		

(20)

(18)

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

2021

2020

2022

26  Slovenia		

(23)

(30)

52  Canada		

(57)

(54)

27  Uruguay		

(39)

(43)

53  Cyprus		

(54)

(28)

28  Dominican Republic (41)(67)

54  Republic of Ireland

(74)

(70)

29  Slovakia		

(46)

(21)

55  Qatar		

(66)

(49)

30  Philippines

(37)

(57)

56  The Netherlands

(70)

(72)

31  Ukraine		

(35)

(56)

57  Luxembourg

(65)

(50)

32  Russia		

(26)

(22)

58  Singapore

(50)

(60)

33  Romania 		

(29)

(35)

59  Jamaica		

(30)

(75)

34  Croatia		

(28)

(14)

60  Switzerland

(56)

(62)

35  Panama		

(25)

(15)

61 – United Arab Emirates(60)(53)

36 – Guatemala

(36)

(32)

62  Mauritius		

(68)

(68)

37  Portugal		

(19)

(31)

63  Czech Republic

(61)

(48)

38  Hungary		

(43)

(27)

64  Israel		

(63)

(63)

39  Spain		

(34)

(29)

65  Australia		

(62)

(58)

40  Ecuador		

(18)

(10)

66  Guernsey		

(55)

(45)

41  Serbia		

(48)

(20)

67  Malta		

(64)

(61)

42  Vietnam		

(21)

(24)

68  United Kingdom

(53)

(44)

43  Taiwan		

(32)

(16)

69  Norway		

(51)

(55)

44  El Salvador

(69)

(71)

70  New Zealand

(67)

(59)

45  Costa Rica

(9)

(26)

71 – United States

(71)

(76)

46  Finland		

(42)

(39)

72  Jersey		

(45)

(65)

47  Honduras		

(31)

(47)

73  British Virgin Islands (72)(73)

48  South Africa

(47)

(37)

74  Hong Kong

(76)

(66)

49  Thailand		

(44)

(42)

75  Denmark		

(77)

(74)

50  Bulgaria		

(49)

(51)

76  Curaçao		

(73)

(77)

51  Japan		

(59)

(46)

77  Cayman Islands

(75)

(69)

TEN LEAST COMPLEX JURISDICTIONS

2022

2021

23

2020

PAGES

46–51



24

TEN MOST COMPLEXJURISDICTIONS

PA

YR

O

LL

AN

D

M
HU
RU

L

AN

ES

S
RE

AN

D

R
OU

G
RE

CE

S

LA

U

DI

O
TI

NS

2
4

France

TA

LI

SA

TI

ON

10 Poland

Mexico57

Colombia

9

TurkeyBolivia6
3

GI

GreecePeru

1Brazil8Italy

A C C O U N T I N G A N D TA XGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

 1

Brazil2021 (1)2020 (2)Brazil once again tops the ranking as the most complex
jurisdiction after being at number one in 2021. The key driversof complexity in Brazil are the volume of regulatory changes
each year, as well as the three layers of tax regimes to comply
with – federal, state and municipality.
Last year Brazil’s complexity was driven by short-term changes
made in response to the Covid-19 pandemic. This included
temporary government incentives to help businesses reduce
their payroll costs, and tax reductions to help companies retain
their workforce. These adaptive changes came with a heavy
administrative burden. Now, in this year’s GBCI, the cessation ofthese incentives comes with a similar administrative workload
as businesses revert to normality.
On the plus side, Covid-19 accelerated Brazil’s already highlevels of digitalisation. For example, prior to the pandemic,
all notarial services required a physical presence, and theface-to-face signing of documents. This has been replaced bysolutions such as digital formatting and video calls, and thesechanges look set to stay.
One of the most complex processes in Brazil remains theincorporation of new companies, taking a very long 45 days as
businesses deal with three layers of regulation. At the federal
level, businesses must set up a tax ID, and select their tax code
based on the specific sector of their company. Companies pay
VAT and service tax at the state level, and revenue tax at themunicipal level. Revenue taxes vary from city to city. While thislengthy process is now mostly digital, companies must have an
appointed locally residing representative. Foreign shareholders
must appoint a resident legal representative and the local entity
must have a locally residing officer.
Our experts in Brazil anticipate the year ahead to be ‘businessas usual’. They predict that no major reforms will occur inadvance of the presidential elections in October 2022. From2023 onwards, tax reform and simplification will likely become
an active discussion on the political agenda.
While regulations in Brazil are complex, the jurisdiction
presents opportunity, with a large consumer market of 213
million inhabitants. Assets under administration in Brazil
are at an all-time high, with particular growth in the energy,
infrastructure, and services sectors.

The dynamic of doing business in Brazil
is one where you need to actively monitor
for regulatory updates. Brazil is one of thejurisdictions with the highest number oflegal or tax changes each year.
TMF Brazil expert



2 France

25

2021 (2)2020 (12)France remains in second place in our 2022 rankings.
Historically employee centric, the French government’s
approach during Covid-19 emphasised that approach witheconomic schemes to help absorb some of the impact ofthe pandemic, supporting companies and, in turn, their staff.
Although this support was attractive to businesses, benefittingfrom the schemes added administrative complexity.
Accounting and tax can be particularly complex in France due
to local language requirements and the number of taxes andtax reports that need to be filed. These factors are challenging
for foreign businesses which must adapt to local ways ofworking.
France is considered a leading jurisdiction for ESG, especiallyenvironmental and social legislation, and was an early
adopter of EU rules, developing ESG regulations before theEU. Examples include gender equality legislation and rules forthe employment of people with disabilities, which apply forcompanies with as few as 20 employees.
Although France is positioned as a complex jurisdiction,
the current French government is business-oriented andis attempting to make the jurisdiction a more attractive
destination. Therefore, complexity here lies in traditionaland structural barriers.

You have so many different taxes andtaxes for everything. You can havetaxes on jewellery, you can have taxes
on publicity, you can have taxes onwater. You have taxes on many things,
depending on your activity. A basic
subsidiary will have to pay and fill out
documents for around ten different
things, even for a small company. It
surprises foreign investors because
they are not used to having so manydifferent taxes to prepare.
TMF France expert





26



TEN MOST COMPLEX JURISDICTIONS

3 Peru2021 (24)2020 (23)Complexity increased significantly in Peru since 2021, moving
up from 24th to 3rd position in the ranking. This follows
political unrest over the past six years, with corruption leading
to caretaker governments. The inauguration of new president
Pedro Castillo is contributing to uncertainty due to a perceived
lack of political experience.
The process of incorporation is another key driver ofcomplexity for both foreign and local business. It takes around20 days, with the need for in-person signatures and meetings
with notaries contributing to this extended period.
Another complexity factor is the monthly tax reporting
requirements introduced in 2021. These require any businesswith monthly accounts of 10,000 soles (€2,540) or more to
submit tax reports, with a view to reducing tax evasion. While
this can be cumbersome for businesses, it does appear to
support the drive for transparency.
Peru remains a highly attractive jurisdiction thanks to its
rich natural resources such as zinc, copper, iron, and lead. Inorder to protect these resources and drive sustainability, Peru
has laws and legislation related to the treatment of land. For
example, the jurisdiction mandates public consultations that
can take up to a year to explore the environmental impact ofbusinesses seeking to profit from natural resources. Although
this does increase complexity, it boosts the jurisdiction’senvironmental credentials, making it more attractive toorganisations and individuals driven by sustainability.

I think one of the big things that needs
to change to make Peru simpler forbusinesses is the introduction ofe-signatures. At the moment, there isa need for in-person signatures, andvisits to notaries. This can slow things
down and make things more complex.
TMF Peru expert

4 Mexico2021 (3)2020 (13)

Unlike many other jurisdictions, Mexico did not implement any
incentives during the pandemic to ease the financial pressure
on businesses. This was in part due to the slow-moving natureof parliament, but also the impending 2022 political elections.
Incorporating a company remains one of the most complex
aspects of doing business in Mexico. All companies must havea tax ID in order to legally exist, but this can only be obtained
through a physical appointment, in order to collect biometricdata. Throughout the pandemic, the tax authorities reduced
their operating capacity to around 40%, adding significant
delays to incorporation times. Opening a bank account is also alengthy process, typically taking two to three months.
Operating in Mexico is complex but generally relatively
predictable. Yet a recent law was passed requiring allcompanies to pay permanent employees 10% of profits
generated each financial year. New businesses can be set
up with this in mind, but this change created complexity forexisting companies that had to manage and accommodate it. It
also led to many businesses that hired subcontractors moving
towards hiring permanent staff. Some companies that provide
outsourcing services are subject to heightened reporting
requirements.
From 1 January 2022, a new law came into action requiring
businesses to provide information on UBOs to tax authorities.
The exact requirements of the new law are not clear, with new
obligations lengthening the incorporation process by aroundthree weeks.
Another recent reform concerns payroll reporting. Tax
authorities must timestamp all documents, and newlegislation is coming into law which requires the postal code of
employees to be on the timestamp. This will create a large andidiosyncratic administrative burden. However, there is hope that
Mexico will become simpler as it moves beyond the pandemic.

I think the one thing that is going toease complexity is the pandemic
winding down. We expect the tax
authority bottleneck to ease. With that
aspect improving, all processes of
establishing a business in Mexico may
become simpler, a little bit less painful.
TMF Mexico expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022



5 Colombia

2021 (4)2020 (8)Colombia has experienced many legislative changes over thelast ten years. Taxes are very complex, having to be filed atnational, regional and local level. The presence of more than
1,200 municipalities is one of the key drivers of complexity forbusinesses in the jurisdiction.
During election years the country is at a standstill, apprehensive
until the outcome of the election is clear, and this has become
more severe over the last two elections in which a viable
centre-left candidate emerged.
Colombia has become a recent adopter of ESG legislation.
A new law in December 2021 aims to create and preserve
forests and other natural areas throughout Colombia, andthe government has set out an agenda in line with the Paris
Agreement to be carbon neutral by 2050. The government also
introduced a new kind of employment law, whereby companies
can receive incentives for hiring young people and/or women.

This is a very important year for
Colombia. Although the elections
are creating some uncertainty about
future government policies towards
companies and investments, thecountry has positively managed the
pandemic and, after fully recovering
its 2020 losses, is expected to growmore than 5% in 2022 according to theOECD.
TMF Colombia expert



6 Greece

27

2021 (13)2020 (5)Greece continues to be a complex place to do business. As
in previous years, a key driver of complexity are the constantchanges to legislation, with 150-200 new laws and 1,500-2,000
new decisions every year.
Although a changeable legislative climate is not new, thejurisdiction has become more complex in the last year, moving
up the rankings from 13th in 2021. This has been driven by a
new digital system introduced during Covid-19. Without thissystem, there would have been no other way for businesses toincorporate and operate due to a previous reliance on face-toface contact between organisations and government bodies.
The introduction of digital processes typically simplifies
incorporation and operations in the long term. However, it cancreate an initial period of increased complexity. We expect
doing business in Greece will become simpler in the coming
years thanks to this move, but it has produced pain points forthe time being. As an example, the government has createda template for online business incorporation. However, it is
only relevant for around 10% of businesses. For businesses
that cannot benefit from the template, a visit to a notary is stillrequired.
Accounting and tax digitalisation has also been problematic.
The government’s ‘MyData’ portal allows entities to upload
tax records (sales) in real time, including the reporting ofexpenses and assets. In the long run, this aims to reducecomplexity by giving the authorities a more complete andcurrent view. However, revenues and expenses for 2021 need
to be backdated. The Greek government has postponed thedeadline for the submission of documents related to backdated
revenues, due to the complexity of this process. MyData also
requires investment: a minimum of €20,000 for medium tolarge businesses.
Despite the increase in complexity in the jurisdiction, Greece
does remain attractive and there are hopes than in future years
it will reap the benefits of its focus on digitalisation.

During the Covid years, there was noother way because, in practice, we
didn't have electronic government
processes. Within six months, thegovernment tried to implement certain
things, but it turned out to be electronic
bureaucracy. So, we moved from thetypical bureaucracy to the digital.
TMF Greece expert





28



TEN MOST COMPLEX JURISDICTIONS

7 Turkey2021 (5)2020 (11)Turkey changes regulations regularly and continues its efforts
to digitalise public services. Challenges lie in the short time
period given to adapt to changes and lack of a collaborative
cross-government effort, making compliance difficult.
Regulatory changes are introduced with minimal informationand guidance. Although it is difficult to adapt these changes
within the required timeframes, they are intended to make
Turkey a major player in the global economy.
Economic difficulties have also caused problems for Turkey inthe past year. The Turkish lira has depreciated against foreign
currencies and the country has experienced hyperinflation. The
annual CPI for Turkey in 2021 was 40%, with the production
index around 86%. In the first quarter of 2022, production index
rates reached 100%, meaning there will be a significant impact
on the price of consumer goods in the months following.
Such uncertainty and flux can drive complexity for foreignbusinesses.
Despite the challenges, Turkey will be an affordable market forforeign investors and therefore considered attractive. However,the propensity for consumers to decrease may deter foreign
investment.

In an environment where we offer
services to multinationals and thedecision-makers are outside ofTurkey, you need to make all relevant
parties aware of frequent changes inregulation and ask them to act quickly
to adapt to the required changes as
the signing authority. That is the maindifficulty for all market stakeholders.
TMF Turkey expert



8 Italy2021 (15)2020 (36)

Italy has become increasingly complex over recent years,
moving from 15th position in 2021 to eighth in this year’s GBCI.
This hike in complexity is partly due to Italy being one of thefirst countries in Europe to introduce e-invoicing in 2020.
Cross-border invoices will be added to the existing digitalbusiness-to-business transaction requirements from July
2022. While the steps required to transition to e-invoicing arechallenging and time-intensive, in the long term, it should make
operations far simpler by reducing manual input of accounting
documentation. In the future, e-invoices could become thebasis of VAT returns.
Despite the shift to digital invoices, the entity activation processin Italy remains highly manual, usually taking between 30
and 90 days. During the incorporation phase of new Italiancompanies, a notary needs to be involved, requiring in personcompany proxy holders. Also, incorporation documents must
be notarised abroad, in person, and electronic signatures are
not accepted. A large backlog caused by Covid-19 increased
timeframes due to access restrictions at the Revenue Agency
and Trade Register public offices.
After incorporation, additional complications arise from therules around resolutions having to be passed by boards of
directors and shareholders, which usually only take place twicea year.
The process of opening a bank account in Italy is also
complex. Italy has aligned with the EU directive’s anti-money
laundering (AML) laws, but Italian regulators are applying
additional restrictions to identify UBOs. This leads to additional
documentation requirements, some of which must occur inperson.
Alongside EU AML and UBO register alignment, Italy follows
common accounting standards. Like Luxembourg, Italy’s
accounting standard is Local GAAP, but this has gradually
become more aligned with IFRS principles.
Italy has a highly regulated labour market which can cause
complications for businesses due to inflexibility. Any settlement
or termination agreements with employees must be carried out
in front of the labour office or trade unions. Additionally, labour
law regulations frequently change along with governments,
although Prime Minister Draghi looks set to lead a (rare) stable
period of government ahead.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

9 Bolivia

2021 (8)2020 (4)Local requirements are a key reason for Bolivia’s top 10
position, such as the need for a Bolivian national or locallyresident legal representative, and foreign workers must notexceed 15% of a company’s total employees. Furthermore,
the accounting system needs to be in Spanish and the local
currency, managed by a certified accountant within Bolivian
territory. These factors drive complexity for foreign businesses
that are used to a more globalised approach.
The onus on paper filings also makes things more complicated.
Companies have a legal obligation to keep paper records ofactivity for three to eight years, depending on the government
entity that supervises it. This ranges from its constitution
and meeting minutes to accounting records. Despite this ‘oldfashioned’ approach the jurisdiction is gradually becoming
more digitalised with declarations of management taxes,
pension funds and salary now being conducted via web portals.
Bolivia is progressive when it comes to sustainability
legislation. For instance, at the beginning of commercial
activity every company must obtain an environmental licenceto be able to operate and stay valid, with commitments
depending on their line of activity. This is attractive tobusinesses and investors seeking to operate in a moresustainable manner. However, failure to comply with thislicence can be subject to fines.
Although businesses can face complexity in Bolivia, it is still an
attractive jurisdiction thanks to its wealth of natural resources.
With a commitment to sustainable practices, there is hope that
this attractiveness will continue and complexity reduce.

The digital declaration throughweb portals of management taxes,
declarations before the Pension Fund
Administrators (AFPs) and salary lists
for the Ministry of Labour do help tomake things simpler for businesses in
Bolivia.
TMF Bolivia expert



10 Poland292021 (10)2020 (34)Over the past year the Polish government introduced multiple
pieces of legislation that were passed in a short timeframe andaccompanied with little public guidance. The main change was
the introduction of the ‘Polish Deal’, which was significant as
it overhauled taxation system. It did not just change tax laws
impacting corporations, entrepreneurs and employees, but also
the way that salaries are calculated. With a lack of guidancefrom the authorities, this has caused salary calculation
problems for companies.
Labour laws in Poland were already complex and the Polish
Deal implementation in January 2022 led to the resignation ofseveral government officials and two amendments to this newlaw with more to come later this year.
Before the Russian invasion of Ukraine, Poland was witnessinga hesitancy of foreign business activity. For example, the Polishgovernment and judicial system challenged some principles
of EU legislation, resulting in some funding being put on hold.
Although Poland wants and needs foreign investment, thePolish government has prioritised state investment.

The Polish government needs foreign
investment, but would like to ensurethat the dominant position remains
with the state. We already have thePolish real estate holding. There areplans to create further state-supported
groups to control assets and achieve
greater independence from foreignbusinesses, such as hotel holdings
or a national group of Polish foodproducers, which can make the Polishmarket difficult for others to operate in.
However, the geopolitical situation in
the CEE region changed dramaticallyand might result in Poland
strengthening its ties with the western
European and US economies.
TMF Poland expert





30

ACCOUNTINGA N D TA XGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Increased global alignment ofaccountancy and tax principles
A key factor that drives simplicity is the gradual globalalignment of principles in the accountancy and tax
worlds. In the long term, this has considerable benefits
for international businesses as they have the advantage
of being able to operate in a uniform manner acrossdifferent jurisdictions and regions, which brings
operational efficiencies. However, local nuances over
how principles are applied can make a huge difference tocomplexity in any one jurisdiction.
The adjustment period following the adoption of new
standards results in varying degrees of confusion anduncertainty. This can bring short-term complexity forbusinesses, as they adjust to meeting new globally
mandated regulations and practices in certain
jurisdictions, while in some locations the way in which
general principles are adopted may be localised, meaning
the changes affecting businesses can have a long-term
effect.

The most significant upcoming move to standardise
accounting and tax operations is the introduction of aminimum global corporation tax. Due to be introduced
in 2023, the tax rate will be set at 15%. Its introduction is
expected to be via a stepped approach, impacting large
companies first and then medium sized. At this stage,
it is still unclear how this will eventually be rolled out tosmaller organisations. It is still too early to say whether
some countries may choose to apply the changes to all
corporate taxpayers, large and small, though they may be
governed by OECD rules.
The complexity caused by the introduction of thisminimum global corporation tax rate will have the highest
impact on jurisdictions that currently boast a particularly
low or non-existent corporate income tax, such as theUAE. The significant tax advantages of setting up andoperating in this jurisdiction have been the primary
driver when it comes to attracting foreign businesses,
so a global corporation tax regime would reduce thejurisdiction’s attractiveness. The UAE government hasannounced that it will introduce corporate income tax forthe first time next year. This will be set at 10%, edging the
UAE towards the forthcoming minimum global rate.

Tax rates for foreign multinationals and domestic companies

Capital gains tax

Withholding tax

2022*
18%

2%

81%

30%

85%

17%

92%

13%

3%

67%

2021
13%

2%

1%

82%

2020
8%

Multinationals pay
a different tax ratedepending on theircountry of origin

All multinationals pay
a different tax rate todomestic companies

Tax rates are identicalfor foreign companies
and domestic
companies

87%* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

31





32

A C C O U N T I N G A N D TA X

Levels of government at which different tax is levied 2020 2021

 2022

Corporation/income tax
92% 92% 97%

National

15% 16% 16%

Regional(eg, state/municipality)

12% 14% 14%

Local(eg, city)

Sales tax

6%
4%
85% 88% 92%

National

20% 19% 18%

Regional(eg, state/municipality)

National insurance contributions
93% 91% 98%

National

9%
10%

17%

Local
(eg, city)

2%

4%

9%

7%

Regional(eg, state/municipality)

Local(eg, city)

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Accounting standards applied

IFRS
22%

66%

12%

US GAAP*
3%

16%* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

82%

Local GAAP*
58%

 All companies must
adhere to this standard

31%

 Companies may have toadhere to this standard,depending on certain criteria
Multinationals pay
a different tax ratedepending on theircountry of origin

Standardisation can be observed at a jurisdictional level
as well as globally. For instance, there is more alignment
now between domestic and multinational businesses
when it comes to paying capital gains and withholding
tax.
Vietnam is following a similar trend after introducing
social insurance contributions for expatriate employeeson the 1 January 2022. This means that foreign
workers and their employers will now be subject tothe same social insurance requirements as domestic
workers. While in the long term, such moves toward
standardisation will make processes simpler throughuniformity, in the short term, companies in Vietnam may
face complexity as they adjust internal systems andprocesses to accommodate changes to social insurance
contributions.
We see another shift towards standardisation whenlooking at the levels of government at which certain
types of tax are levied. There has been a gradual shift
to a more nationalised approach which, in turn, drives
simplicity for businesses.

10% This standard is not applied
within the jurisdiction

All multinationals pay
a different tax rate todomestic companies

Despite this move towards a more standardised
approach globally to paying tax at a jurisdictional level,countries such as the US, Brazil, and Colombia still
levy tax at multiple levels, including by state. In Brazil,
not only is there tax variation between different statesand municipalities an organisation operates in, but also
between business sectors. Brazil is also the jurisdictionthat makes the highest number of changes to tax rates
each year – a major factor in its position at the top of thisyear’s GBCI ranking.
Another factor is a focus on greater alignment withinternational standards such as IFRS. In recent years
there has been a global trend to better align with IFRS
and international practice. Overall, this is viewed as abeneficial move for businesses as it serves to make local
accounting practices easier to understand.
Local GAAP is still the most commonly applied
accounting standard. However, local doesn’t necessarilymean localised, as we see in cases such as Italy. Since
2015, the Italian government has made a concerted
effort to align with IFRS, despite having local GAAP inplace. Therefore, even with certain local standards andpractices remaining in place, an international approach toaccounting and tax and global standardisation is still verymuch on the rise.

33





34

A C C O U N T I N G A N D TA X

Ability to do business without being registered with any relevant tax authorities
2020
4%

13%

83%
* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

2021*
3%

12%

3%

9%

86%

2022
88%

 Yes

Yes, depending on certain criteria



No



Notice period given to companies before a tax audit
2020
27%

16%

25%

29%

33%

19%

3%

2021
22%

18%

8%

2022
19%

17%

33%

21%

 No notice period is required 1 month Up to a week

 2-3 months

 2-3 weeks

 More than 3 months

7%3%

Ability to voluntarily correct tax areas and avoid being fined

2020
39%

60%

1%

2021*
27%

71%

1%

29%

68%

3%

2022

 Yes, they can voluntarily correct their tax return/payment and will not receive a fine
 Yes, they can voluntarily correct their tax return/payment but will be fined anyway
 No, they cannot voluntarily correct their tax return/payment* Total is not 100 because
individual percentages
are rounded to thenearest whole number.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

Governments stricter but also more
supportive
Globally, governments are becoming stricter each year
when enforcing tax rules and regulations. Authorities
have focused on developing tax audit plans to identify
tax risks in the economy and are focusing on auditing
companies that operate in those areas.

Globally governments are
becoming stricter each year
when enforcing tax rules
and regulations

Since 2020, the number of jurisdictions that allow
businesses to operate without being registered with tax
authorities, either regardless of criteria or depending
on certain criteria, has gradually decreased. Only 3% ofjurisdictions now permit this, including the UAE and US,
demonstrating a move towards a stricter approach to
doing business.
Along with this move towards stricter tax governance,
tax authorities are becoming more inclined to spend
time with taxpayers to help them understand tax
regulations. This is particularly the case in Europe, where
tax authorities are running programmes for companies,
aiming to help taxpayers with their understanding of tax
regulations so that they remain compliant.
This move towards being more supportive is a driver ofsimplicity, owing to the improved direct communicationand collaboration with tax authorities. This aids
companies by reducing the time and money that they
could potentially end up spending on preventing or
dealing with tax controversies.
Another example of this move towards being more
supportive or lenient, is that more notice is generally
being given to businesses before a tax audit takes place.
In 2020, 27% of jurisdictions reported that no notice wasneeded before a tax audit, a figure which has dropped
to 19% in 2022. Giving more notice allows businesses tobetter prepare, so they are less likely to encounter issues
during an audit.
However, the percentage of jurisdictions that allow
companies to voluntarily correct their tax returns or
payments without receiving a fine has decreased since2020. In 2022, it is still the case that most organisations
will receive a fine even after voluntarily correcting theirtax return.

Authorities have worked on
developing tax audit plans to identify
tax risks in the economy and arefocusing on auditing companies that
operate in those areas

Tax authorities are becoming
more inclined to help and spend
time with the taxpayers to help themunderstand the tax regulations

The percentage of jurisdictions thatallow companies to voluntarily correct
their tax returns or payments without
receiving a fine has decreased since
2020

35





36

A C C O U N T I N G A N D TA X

Digital approach to accounting andtax still on the rise
As well as the trends and developments above, the movetowards digital solutions and reporting has continued.
This has been spurred on by Covid-19, which limited
the ability for face-to-face interaction and encouraged
greater dependency on technology.
One example of this move towards digitalisation is in
Poland, where electronic invoicing has been introduced.
While this is optional for now, it will become compulsory
in 2023. New digital reporting requirements can create
challenges for organisations as they work to update
existing processes or adopt new ones. Dataflows need
to be redesigned and the impact on technology needs
to be assessed and understood. Digital reporting anddetailed transactional reporting require a certain level oftechnological enablement and so adequate investment
and support is needed.
Another trend involves jurisdictions beginning to exploit
big data and artificial intelligence to conduct more data
matching. With this, it becomes simpler to identify
contradictions in tax data and address these throughan audit. This can reduce complexity for governments
themselves but can create additional burdens fororganisations tasked with satisfying higher levelsof scrutiny.

Mandatory to upload tax invoices on a tax
authority’s system/portal

Globally, the compulsory uploading of tax invoices
electronically via the authority’s system or portal isincreasing. In 2020, it was compulsory in only 24% ofjurisdictions for all companies to do this, but the figure
has now risen to 35%. Serbia, for example, will begin
transitioning to e-invoicing this year.
When we look at the mandatory electronic submission oftaxes, overall it has remained on a par or is lower than in
2020. For example, the mandatory electronic submissionof capital gains tax is less widespread in 2022 than it
was in previous years. Conversely, national insurance
contributions must be submitted electronically in morejurisdictions in 2022 than in 2020.
Our analysis has found that customising accounting
software is difficult in more jurisdictions in 2022 than
before Covid-19. In 2020, 65% of TMF Group experts
globally agreed that it was easy to customise accounting
software as per local accounting requirements, but thisfigure has dropped to 57% in 2022. In jurisdictions such as
Greece and France businesses can face difficulty adapting
their accounting software to local ways of working.

Is it easy to customise accounting software
to meet local accounting requirements?
65% 55% 57%

2020
24%

15%

61%

27%

12%

61%

2021
Yes

2022
35%

12%

53%

 Compulsory, for all companies
 Compulsory, depending on certain criteria
 Not compulsory

 2020 2021

 2022

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

 2020

Taxes where electronic submission is mandatory

69% 64% 68%

Corporation/
income tax

73% 63% 65%

66% 61% 64%

Payroll taxes

Excise tax

National insurance
contributions

64% 62% 59%

Capital gains tax

36% 37% 40%

59% 53% 53%

 2022

61% 62% 66%

Sales tax

Property tax on
business premises

 2021

61% 55% 60%

Withholding tax

72% 64% 71%

Value-added tax(VAT) / Goods andservice tax (GST)

66% 56% 62%

Insurance premiumtax (IPT)

37





38

GLOBAL ENTIT Y
MANAGE ME NTGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

In our entity management section, we willtake a chronological look at the challenges
companies face when setting up a legal entity,
operating within, and withdrawing from a foreign
jurisdiction.

Currently the major drivers of increased complexity
include the introduction of new legislation (principally
focused on regulation), enhanced reporting requirements
and increasing levels of stringency, such as thetightening of deadlines. We will also consider how
Covid-19 has impacted the practice, looking at examples
where the pandemic has halted incorporation, alongsidejurisdictions which have rapidly adapted throughdigitalisation and streamlined operating processes.
When Covid-19 first hit we saw an initial freeze
on business expansion and a slowdown in theestablishment of new entities. When businesses wereready to resume their expansion plans, they generally
found that the process of incorporating took a lot longer.
The pandemic has also had a negative impact on interestin new entity arrangements, as many want to see thedust settle on the ‘new normal’ before committing todecisions.

Today, at a global level, it takes on average arounda month for a private company to be incorporated.
Regionally, incorporation times are longest in SouthAmerican jurisdictions. For example, in Venezuela,
Guatemala, and the Dominican Republic, it typicallytakes more than three months to incorporate a privatecompany. In EMEA, the process is much faster, taking
less than a month on average.

Opening a bank account from abroad candelay operational readiness
For foreign companies, the procedure of opening abank account can add significant delays to operational
readiness. This can take longer in countries alignedwith the EU anti-money laundering directives, as thestringent regulations require additional documentation
which can take time to gather and verify. In countries like
Italy some of this documentation must be presented inperson, and the backlog caused by the pandemic means
appointment lead times are at an all-time high.

Percentage of jurisdictions where it takes morethan a month on average to open a bank accountfrom abroad

Overall length of time taken to incorporate a
private company, 2022
27%

Incorporation takes around a monthon average

Total
35%
43%
55%

17% 1%
North America

23%

27%

31%
43%
62%

4%

 2020South America
 Up to a week (0.1)

 2 to 3 months (2.5)

 2 to 3 weeks (0.6)

 4 to 6 months (5.0)

 Around a month (1.0)

 7 to 12 months (9.5)

20%
33%
40%

APAC

 Over a year (13.0)

38%
38%
50%

EMEA
* Total is not 100 because individual percentages
are rounded to the nearest whole number.

38%
47%
59%

 2021
 2022

39





40

GLOBAL ENTIT Y MANAGEMENT

The average time taken to open a bank account fromabroad is increasing. In 2020, this process took over amonth in just 35% of jurisdictions. This rose to 43% in
2021, and now stands at 55%. Waiting over a month toopen a business bank account adds a significant delay tostarting operations.
Regionally, opening a bank account from abroad takes
significantly longer in North America and EMEA, while it’s
still quickest in South America, despite a doubling in thepercentage of jurisdictions where this takes more than amonth, from 2020 to 2022.

New compliance requirements makeongoing operations more challenging
There has been a steady increase in new compliancerelated legislation, making ongoing operations
more challenging. In OECD countries, transparency
requirements continue to increase, with layers of anticorruption or anti-tax evasion legislation. Governing
bodies are also becoming more rigorous around how
quickly businesses must file documentation, or the depthof information that must be provided.
Stricter requirements include the need for qualified
individuals to prepare corporate changes or statutory
submissions to local authorities, on behalf of the legal
entity. This was required in 37% of jurisdictions in 2020,

rising to 45% in 2021, and 48% in 2022. In BVI, forexample, companies are required to appoint a registeredagent to handle legalities. With this increased stringency
comes higher accountability, with the use of qualified
individuals meaning authorities can impose fines orother punishments if submissions are then deemed to beincorrect or incomplete.

Personal liability of directors is on the rise
Directors of private companies are also being held
increasingly liable. Over the last three years, personal
liability has steadily increased from 86% of jurisdictionsin 2020, to 88% in 2021, and 92% this year.
Yet India has taken an alternative approach, waiving
personal director liability. It takes the view that removing
these punishments will promote higher transparency.

Approach to Covid-19 polarises jurisdictions
Covid-19 has been hugely disruptive to global entity
management processes since early 2020, andjurisdictions have tended to go in one of two directions.
On the one hand, some have moved to a more digitalised
and streamlined delivery model. Some old-fashioned
practices may have been removed, replaced, or relaxed.
In Canada, for example, requirements have been relaxed

Qualification required to prepare corporatechanges or statutory submissions on behalf of thelegal entity to local authorities

Jurisdictions where directors of privatecompanies can be held personally liable for legal
obligations and/or contractual commitments of
their company

2020

2020
37%

63%

2021*

14%

88%

12%

92%

8%

2021
45%

53%

2022

1%

2022
48%

 Yes

86%

 No



Not applicable* Total is not 100 because individual percentages
are rounded to the nearest whole number.

52%
 Yes

 No



Not applicableGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

around formalities such as wet signatures on legal
documents, either because people were in lockdown
or don’t have access to printers at home. In favour, wehave seen the growing acceptance of documents beingtransmitted electronically. So, in effect, the pandemic has
caused some processes to take less time, having been
simplified through the power of accelerated digitalisation.
On the other hand, some jurisdictions aren’t as well set
up to lean on digital processes, and/or are less open
to making this shift. As such, processes have beensignificantly delayed as physical offices were closed
for periods of time or were operating with a reduced
workforce. For example, in Mexico, the timeframes forappointments with registrars increased exponentiallyduring the height of the pandemic. Those jurisdictions
that fall into this camp are still suffering the ongoing
effects of delays.
The legal world is one of the last bastions to hold out
on of embracing digitalisation, being very attached topaper, wet signatures, chops and seals. It is likely thatthe pandemic will serve to highlight to governments andlegal bodies that business continued to be carried out
without these formal requirements. Digital practices
brought about through necessity during the pandemic
are likely to be here to stay, as they continue to makeprocesses easier.

Dissolution processes are also taking
longer
The time taken for the dissolution of a company has
continued to increase, taking more than seven months
on average in 2022, having increased year on year since2020. Breaking this down by region, average dissolution
times are longest in South America (9.3 months) and
APAC (8.8 months), while the process takes just over six
months in North America and EMEA.
In summary, the pandemic brought new incorporations
to a halt in many jurisdictions. When businesses wereready to resume expansion, the process of entity
establishment and opening bank accounts generally
took much longer. While some jurisdictions faced a hugebacklog and reduced capacity at the relevant authorities,
others embraced the process of digitalisation and, assuch, now have a new competitive advantage. Alongside
this polarisation, we have seen other factors at play,including new regulations and the increased stringencyof requirements. The pandemic is not yet over, and wewill continue to see the incorporation and operationallandscape evolve over the coming years.

Average dissolution times overall and by region

Total

APAC
6.6 months
6.9 months
7.2 months

North America

8.8 months
9.0 months
8.8 months

EMEA
5.1 months
5.8 months
6.1 months

6.7 months
6.5 months
6.4 months

South America
5.6 months
7.5 months
9.3 months

 2020 2021

 202241

42

PAY R O L L A N D
HUMAN RESOURCES

Covid-19 continues to be a driver of change, andpolicies persist in many jurisdictions relating tobenefits and ways of working, depending on theimpact on individual industries and employees.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

linked to greater emphasis being placed on social
responsibility (see the ESG section earlier in this report).
The requirement for companies to submit reports on
employees remains mandatory for most jurisdictions. As
we’ve seen, reporting on equalities (eg gender pay gap or
employees with disabilities) and employee demographics
have increased compared to previous years. Details on
foreign national employees are increasingly required
to be submitted by all organisations, from 54% ofjurisdictions in 2020, to 68% in 2021 and 73% in 2022.

Benefits
Paid time off and minimum wage remain the top
two legally mandated benefits globally, followed bypaid maternity leave and paid sick days. Over the last
three years, there has been a steady increase in thelegal requirement for compassionate leave, childcare
assistance, and housing/social care contributions, driven
primarily by changing requirements in South Americanand EMEA jurisdictions. It’s therefore unsurprising thatamong the ten most complex jurisdictions for payroll andhuman resources, six are in the EMEA region and two are
in South America. Overall, there is a trend of companies
being increasingly employee driven, which is perhaps

Equalities reporting has seen the biggest jump year on
year, with respondents in 26% of jurisdictions confirmingthat reports are required by their government authorities,
versus 8% of jurisdictions in 2021. This increase isevident across all regions, with jurisdictions of note
including Brazil, Argentina, Malaysia, Turkey, Slovakia,
Vietnam, Slovenia, Guatemala, South Africa, Thailand,
Chile and the Dominican Republic.

 2020

Reports on employees required to provide to government
authorities (all organisations)

79% 86% 83%

Payroll data

54% 68% 73%

Details on
foreign national
employees

74% 82% 78%

Individual's pay

28% 41% 47%

Employeedemographics

 2021

 2022

58% 75% 70%

Employee bonuses

9%8%

Equalities reporting(gender pay gap,
disabilities, other)

26%

43



44

PAY R O L L A N D H U M A N R E S O U R C E S				Companies legally required to allow employees to bemembers of labour unions or work councils
66%

20%

14%

 Yes – this is true for all companies
 Yes – this is true for some companies
 No

Work councils can demand regular pay increases
through collective work agreements

69%

15%

 Yes – work councils are allowed to demand
regular pay increases
16% No – work councils cannot demand regular
pay increases
 Not applicable – we do not have work councils

Additionally, this year’s research found that employee
rights channelled through work councils and labour
unions are common in jurisdictions, with 66% of allcompanies globally legally allowing employees to bemembers of labour unions or work councils. This is led
by South America, where this is true for all companies
in all jurisdictions. In 69% of jurisdictions globally, work
councils are allowed to demand regular pay increases for
employees, with this being led by EMEA (76%) and SouthAmerica (70%).

mobility. While this flexibility is broadly perceived as
being beneficial for employees, for employers it can be asource of complexity as there may be additional HR andpayroll obligations or considerations.

Impacts of global mobility“From a payroll perspective, you've got to consider
residencies and taxes. Global mobility is increasingly a
topic that companies need to address, and it isn't simple.
They will need to make sure they've got in-house global
mobility advisors, or that they're working with multiple
vendors. They will need to keep track of visas as part ofthat service as well.” – TMF Group payroll and humanresources expert“The global mobility of the workforce will generate aneed for more sophisticated payroll and HR services.”– TMF Romania expert

Our expert in Hong Kong pointed to the rise of global
mobility, not just within the workforce, but also amongsupply chains:

Covid-19 has had a significant impact on payroll andhuman resources, with many of those who weremandated to work from home continuing to work
remotely at least some of the time. With remote working,employees have had the opportunity to move away fromthe city, or even country, of their workplace, accelerating
the global mobility trend.

“We will likely see increased global mobility, asbusinesses seek to diversify both their markets andsupply chains. Following the initial China-US tradedisruption, and along with the ongoing impact from
Covid-19, many companies will investigate and devise
strategies to combat future disruption to their operations,and this will likely lead to engaging additional suppliersand vendors, as well as establishing manufacturingbases across a larger number of countries. International
companies will need to grapple with the nuances ofhiring, maintaining and in some instances laying off staff
in a greater number of jurisdictions.”

Before the pandemic, global mobility was primarily
a company-driven initiative, where employees weremoved to a certain location in order to do a specific job;
the balance has now shifted towards employee-driven

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

What does the future of
payroll and human resources look like?
On the payroll side, digitalisation is playing a significant
role, which has only been accelerated by the pandemic.
For example, electronic payslips are becoming the normin most regions, although some jurisdictions in SouthAmerica are behind on this trend. Another, perhaps morenovel, example is the introduction of chatbots to enable
employees to get answers to HR queries, reducing theneed to talk directly to HR professionals.
“There tends to be a lot more electronic filing that goeson in APAC. Europe and North America are probably joint
second. South America is an area that is wrought withcomplexity and a lot of manual processes. And it's thearea where you still have to produce physical, hard copy
payslips for employees as well.” – TMF Group payroll andhuman resources
Although digitalisation can simplify processes, suchas accessing information, organisations are now
increasingly leveraging data with payroll providers
and demanding more information than ever before.
Examples of this data include equalities reporting (eggender pay gap and disabilities). Although reporting thisinformation is often non-statutory, some jurisdictions
are encouraging the disclosure of pay differences ofboard-level employees and the lowest-paid employees,
providing an additional reporting burden for those incharge of payroll.

“There's going to be more statutory reporting, people
want more information and more data. I think any
organisation these days, whether you're in business, in
healthcare – a teacher – value data more, so the demandfor data and analytics will be greater each year.” – TMF
Group payroll and human resources expert
With increased digitalisation in payroll and therequirement for further data and analytics on employees,
this leads to the question of what data and information
can we provide? The traditional payslip, while necessaryfor employees to see their level of pay and taxes, is alegal requirement for companies’ reporting. However,TMF Group experts predict that payslips could be used
to provide more information to employees, such aspredicted tax changes, commission rates if working insales roles, or information related to equal opportunities.
In future, not only could there be an assessment ofwhat data we provide to employees, but also a potential
move towards demand payroll. It is commonplace that
employees are paid monthly, but employees could beoffered the opportunity of more flexibility in how they arepaid by drawing down part of their salary. Flexible payroll
is already quite prominent in the US, but it is unlikely tohappen in the short term on a global scale.

Looking ahead

An increase in digitalisation
with electronic payslips becoming
the norm in most regions

TMF Group experts predict that
payslips could be used to provide more
information to employees, such aspredicted tax changes, commission rates
if working in sales roles, or information
related to equal opportunities

Chatbots enable employees to get
answers to their HR queries, reducing theneed to talk direct to HR professionals

45



46

TEN LEAST COMPLEXJURISDICTIONS

DI

GI

TA

LI

SA

TI

ON

68 United Kingdom
71 United States
72 Jersey

74 Hong Kong

69 Norway
76

Denmark

73 British Virgin Islands
75 Curaçao

70 New Zealand

77 Cayman Islands

PA

YR

OL

L

AN

D

H

UM

AN

RE

RU
SO

UR

CE

S

AC

L

C

ES

N
OU

AN
TI

G
RE

D

N

G

AN

UL

D

I
AT

TA

X

ON

S



 68

United Kingdom(UK)

2021 (53)2020 (44)The UK has ranked in the ten least complex countries for the
first time. One of the key areas is the country’s exit from theEuropean Union (EU), or ‘Brexit’. Although at the time thiscreated uncertainty for businesses incorporating and operatingin the UK, in 2022 it seems that the dust is settling and theimpacts of the UK’s departure are becoming clearer.
Since Brexit, the UK government has been actively working
to become more relaxed and straightforward in its approachto business in order to remain attractive. For example, the UK
takes a simple approach to business incorporation. There is norequirement for resident directors and set up can be achievedin as little as a day, meaning that international businesses
can start full operations with ease. One aspect that can delay
operation is setting up a bank account. This is driven by banks
and financial institutions themselves and can create complexity
for startups from other jurisdictions, such as the US.
Following Covid-19 and Brexit, the UK has been experiencing
an inflation crisis and issues related to supply chains which has
impacted business operation.
Furthermore, recent events in Russia and Ukraine havecreated some uncertainty in the UK. The Government has
been imposing new legislation and sanctions to impact Russia
and support Ukraine. For example, the Economic Crime Bill,announced in February 2022, mandates the disclosure offoreign property ownership and aims to reduce the hiding of
Russian money and assets in the jurisdiction.
The UK is set to remain attractive in the future as theGovernment looks for more ways to compete with its European
neighbours following Brexit. One advantage to operating in thejurisdiction is a highly skilled talent base that is accustomed toworking internationally and for foreign businesses.

The UK government has signalledthat it is going to relax regulations,
it is going to take away some of theonerous EU rules. What the method isand how we stay in the market again
causes some uncertainty, but I thinkbusinesses can probably look forward
to things getting a bit easier.
TMF UK expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022



69 Norway

47

2021 (51)2020 (55)

Norway benefits from a high level of digitalisation andautomation. This includes anything from filing reports tocompleting tax returns, or registering a company.
Incorporating a company within Norway is relatively quick,typically taking a few days. For Norwegian citizens or residents,
the entire process can be done online, but foreign parties don’t
have the same upfront digital access. What can take the mosttime for foreign nationals is paying in share capital, which
requires the opening of a bank account. The process of opening
a bank account is not automated and as such, has a longer leadtime, sometimes taking up to two months. This is mainly due tothe internal KYC (Know Your Customer) and AML (Anti-Money
Laundering) processes of banks being quite fragmented andinvolving a lot of back-and-forth correspondence.
Looking at Norway in contrast to other Nordic countries, inFinland an entity can be established without paying in sharecapital. This means that a bank account isn’t required anddoesn’t pose an upfront obstacle.
Within the Nordic environment, agreements exist which allow
quick cross-border operations between local businesses, via a
Norwegian ID. However, outside of this environment it becomesa little more challenging for non-local parties.
Like most other European countries, Norway is due to
implement an Ultimate Beneficial Owner (UBO) register,
expected in 2022 or 2023, making it one of the last countries
to do so. This extra formality will add a small administrativecomplexity to companies operating in Norway, as they must
annually file the UBO or controlling person.
Larger corporations and those in the financial sector will soon
have to comply with ESG reporting. This will initially be a largechange for companies as they must report the environmental
impact of their assets.
During the height of the pandemic, the Norwegian Government
put incentive plans in place to support the parts of society
most affected. There was also a leniency regarding reporting,whether it was annual statements, tax reporting or prepayment of taxes. All these measures have either already been
reversed or soon will be. However, important changes predicted
to outlive the pandemic are flexible working arrangements andthe use of technology.

I'm not sure that all the companies arereally aware of ESG reporting yet, andhow to manage it. Years one and two
are a big change for many companies.”
TMF Norway expert



48

 70

TEN LE AST COMPLEX JURISDICTIONSNew Zealand2021 (67)2020 (59)New Zealand is a new entry in the ten simplest jurisdictions,but is often widely praised for its simplicity and attractivenessfor foreign businesses. A key driver is a straightforward
incorporation process, facilitated by a slick online set up. New
Zealand doesn’t mandate face-to-face requirements and thejurisdiction ‘went online’ seven years ago. Now more than 95%
of tasks for businesses can be done online. The jurisdiction is
also internally digitally aligned, meaning that one access code
can be used across different systems such as ID matters andPay As You Earn (PAYE) online.
Another driver of simplicity in the jurisdiction is the stability of
its laws and legislation. In the accounting and tax space, there
have been no big increases or significant changes year on year,
so businesses are better prepared than in other jurisdictions
where governments are more in flux when it comes tolawmaking.
Covid-19 did bring big changes in New Zealand and theGovernment’s progressive stance was globally praised. This
included generous business support to aid organisations andindividuals. Although this did ease the jurisdiction’s experienceof and emergence from the pandemic, it is now contributing to
inflation as more money has been brought into the economy.
Transparency is another area where the government has been
progressive, further driving a supportive business culture.
In 2018, AML legislation was introduced for all companies.
This, along with KYC legislation, can cause some complexity
when opening a bank account with certain resident director
requirements to satisfy. As observed elsewhere in the GBCI,
although the process of incorporation is straightforward
opening a bank account can stall entity activation.
While such transparency can create complexity, it does drive
attractiveness by offering businesses certainty. It also reflects
the supportive approach of the New Zealand Government,
which drives simplicity in the jurisdiction and looks set tocontinue to do so in future.

New Zealand has always been seen
as very simple when it comes to doing
business. The reason for this is that theincorporation process and compliance are
relatively straightforward. In terms of therequirements of appointing a director, they
are relatively less complex compared toother jurisdictions. Most of the things youneed to do, you could do online.
TMF New Zealand expert



71 United States (US)2021 (71)2020 (76)Given its progressive approach to business and focus on
driving simplicity, it’s unsurprising to see the US maintaining
its ranking among the simplest jurisdictions. A key driver ofsimplicity is that the government actively looks to make itcorporate friendly. For instance, in recent years corporate tax
rates were reduced in an effort to increase investment into thejurisdiction.
The state of Delaware serves as a key example of the US’s
progressive business stance. Revenue generated outside thestate is tax-free, making it particularly popular and attractive forforeign business incorporation. During Covid-19, like the rest of
the world, the US did witness some delays in the time it takes
to incorporate a business and also in the processing of certain
documentation, leading to a backlog in Delaware that is having
an impact even now. Despite delays, the US boasts a quick
online incorporation process that did help to ease complexity
during the pandemic.
Operating across states in the US can add an administrative
burden, with states having different tax rates, as we see in
Delaware, so ensuring that such tax rates are honoured acrossstate borders is a necessary aspect of business operation.
This can also create additional administration when setting up
as there can be a need to incorporate in multiple states whennexus is established. However, this is not typically complex
so when properly administered, foreign businesses can avoid
issues.
Thanks to its skilled workforce and global reach, the US is
set to remain one of the most attractive jurisdictions forforeign businesses. However, with recent developments in thejurisdiction related to the Russia-Ukraine crisis and inflation
issues following the pandemic, it will be interesting to see how
the business landscape changes.

I think that when you have investors
looking to expand abroad, consistency
and predictability from policymakers
is one of the main factors underconsideration. History has shown that
the US has a business-friendly culturethat embraces entrepreneurship. Thisis one of the pillars of this country andcontributed to is becoming one of thewealthier countries.
TMF US expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

 72

Jersey2021 (45)2020 (65)

Despite boasting only 100,000 residents, Jersey has
considerable international reach and influence. The jurisdiction
tends to be an early adopter, engaging with new and trending
areas of doing business such as FinTech and ESG legislation.
A key reason for the jurisdiction’s simplicity is the focus on
digital processes during Covid-19. It’s now easier to contact
relevant regulatory bodies and government organisations,Companies can incorporate in as little as two hours andthere was a move away from ‘wet-ink’ signatures during
the pandemic, as well as improvements to due diligencerequirements. Before the pandemic it was necessary to take aphotocopy of a passport to a lawyer or accountant to certify
the identity of owners and controller, which would then need
to be mailed to Jersey. New technologies allow this to be
performed remotely and digitally. The move towards digital
marries with a focus on the technology industry, with morethan 5,000 people employed in the digital sector.
Jersey has a well-established funds industry with great
infrastructure in place. It makes up a significant, thriving partof the local financial services market - attaining a 20% growthin 2021. The popular ‘Expert Fund’ and ‘Private Fund’ regimes
make it extremely easy to launch and run funds on the island.
Jersey has ESG disclosure rules in place and is a key
jurisdiction in this space. Led by the Jersey Financial Services
Commission, it’s also forged by investors and businesses
seeking a more sustainable and ethical manner of doing
business.
Despite all this there are still some complexities. For example,
travel to the islands can be time consuming, with direct flights
limited. Furthermore, due to low direct taxation, indirect duty
can make the cost of living quite expensive, with property
prices matching those of central London.
With its move towards digitalisation and ESG, Jersey is set
to remain one of the most simple and attractive jurisdictions
globally.

The jurisdiction has weathered thelast couple of years exceptionally well.
Significant investment by government,
the regulator and industry has seen
Jersey’s position on the global stage
increase notably. It provides families,
funds and corporates what they want:a safe, secure and responsive platform
through which to invest and operate.
TMF Jersey expert

73 British Virgin
Islands (BVI)

49

2021 (72)2020 (73)

BVI is consistently one of the simplest jurisdictions in our index,
steered by an ambition from government and legislative bodies
to be attractive to foreign investors and businesses.
Two key aspects are the simplicity of incorporating a businessand the lack of taxation. There is also an emphasis ontransparency that means businesses and investors know that
their money and assets will be safe and protected. Over the
past ten years, the jurisdiction has focused on internationalalignment with bodies such as the OECD. This has, in somecases, created slightly more complexity as there are certain
regulations and legislation that businesses and investors needto adhere to. However, the transparency and security has been
perceived as worthwhile. Also, adherence to such standards
is not hugely disruptive as these are commonplace in otherjurisdictions globally.
With such transparency standards, issues can arise. Failure
to meet economic substance requirements can result in heftyfines, so it’s important to ensure that these requirements aretaken seriously and acted upon.
Thanks to its lack of taxation and focus on transparency,
while preserving privacy, BVI attracts private wealth, family
office and fund investors as well as capital markets deals. It
acts as a neutral domicile for a large number of businesses
and individuals from most regions in the world that needan efficient set up for their companies in a well-structured
legal framework. The jurisdiction rebounded strongly fromthe pandemic at the end of 2021, proving to be resilient andoffering efficiency and flexibility in cross-border transactions
and management of assets, while complying with global
regulations.
BVI private wealth and family office clients from SouthAmerica and elsewhere in the world now frequently look for
ESG credentials, especially when it comes to operating in anenvironmentally and socially responsible manner. Although
the BVI does not have specific ESG legislation there is the
expectation that this may change.

In the BVI we have very solid legislation,
which is updated regularly. We also
have the Commercial High Court for the
Caribbean. We have a very well-functioning
international tax agency, and some people
might think, 'Okay, but isn't that scary?'. It's
not because it makes the country a very
well-regulated jurisdiction to do businessin.
TMF BVI expert





50

 74

TEN LE AST COMPLEX JURISDICTIONS

Hong Kong

2021 (76)2020 (66)Historically, Hong Kong as a part of China has operated a “onecountry, two systems” policy. However, China has taken more
control from a legal and economic perspective over the past
few years. The direct impact on foreign business enrolment
may be limited for now, as they are adopting the ‘wait and see’approach to what lies ahead. Despite this, Hong Kong remains
a simple jurisdiction for foreign companies.
The Hong Kong government has set its sights on developing
a leading funds industry, which has been running for 18-24
months. Hong Kong set up a new fund structure to replicate
the Cayman fund structure and provide tax exemption for asset
managers, meaning they will only need to provide one set ofcompliance reports to the authorities. This should help attract
more asset managers to domicile their Cayman funds inHong Kong.
Hong Kong policymakers have raised the bar and started
to introduce environmental, social and governance (ESG)
regulations, specifically for listed companies, whereby theymust report their ESG status to the authorities.

I think ESG is a global trend and Hong
Kong is responding to stakeholders’expectations by evolving and taking
some solid steps.
TMF Hong Kong expert



75 Denmark

2021 (77)2020 (74)

Denmark is in the top three simplest jurisdictions again in 2022,with digitalisation a key factor.
Towards the end of 2020 Denmark created a digital ‘onestop shop’, with paperless incorporation and operation. Thismeans that businesses now only require one login and portal
to access various services. The tax authority also updated
its homepage interface to make it more user friendly. With
Denmark positioning itself ahead of the curve when it comes todigitalisation, it is now adjusting to drive simplicity, while somejurisdictions are only just beginning their digital journey.
Complexity in the jurisdiction is limited, but snags such as
understanding rudimentary setup processes and Danish
language barriers can occur. However, the government isfocusing on adding more and more information in English, so
this may shift towards greater simplicity in future. Contractual
business operation that requires short-term set up can create
some complexity as this requires a considerable amount ofadministration, despite the short operation time.
During the pandemic the government put support packages inplace that included shorter time to qualify for reimbursements
for employees who became sick due to Covid-19, salarycompensation and compensation to help cover fixed costs
for companies. It was helpful but did place an administrative
burden on businesses to complete the necessary paperwork.
There were also fines for incorrect completion of forms.
Emerging from the pandemic, there has been discussion about
the possible postponement of annual reports. This would
lead to more flexibility as previously there has been a harddeadline. This mirrors steps taken during the pandemic, suchas postponing deadlines, loans and reimbursements.
Given this flexibility, Denmark has been able to make a strong
recovery following the pandemic and is set to remain one of thesimplest jurisdictions for years to come.

Where the government can, they will
digitalise. They started putting all theauthorities' access into one place,
so when you go in, you don't need tohave five different logins. On the tax
authority's homepage, the interface
has changed to make it more friendly.
They're also starting to have more andmore information in English. It's a slow
process but we can see the changes.
TMF Denmark expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

 76

Curaçao2021 (73)2020 (77)Curaçao has improved its ranking to be the second simplest
jurisdiction in 2022. This is unsurprising considering the focus
on simplicity that has been embedded into Curaçao’s laws andlegislation in recent years.
Accounting and tax are particularly straightforward. For
example, bookkeeping is less complex thanks to minimal
government interaction. All wage tax returns and filings are to
be submitted by the 15th of each month, and if businesses canstick to this deadline there is little complexity.
Payroll and human resources can be slightly more complex
here as there are increased ‘proof’ requirements to ensurebusinesses and individuals remain transparent. However, thishas become simpler thanks to the development of electronic
filing and online processes. Also, it doesn’t necessarily impact
the attractiveness of the jurisdiction because it’s seen as apositive to be transparent and open. For instance, businesses
and individuals from South America are attracted to Curaçao
as it offers protection of their assets and their own safety.
An additional attraction for organisations from South America
and elsewhere are language capabilities, with much of theworkforce speaking Papiamento, Dutch, English, Spanish andPortuguese. It is also part of the Kingdom of the Netherlands,
and a focus on international alignment drives attractivenessand simplicity.
During Covid-19 there were some delays in business operationand incorporation. However, solutions were found and delays
resolved within months. This included an increase in theability to sign documents electronically. However, during andemerging from the pandemic, the jurisdiction has observed
staff shortages, particularly within hospitality and leisure.
There is an expectation that UBO requirements may increase incoming years, which could impact doing business in Curaçao.
However, there is little doubt that it will remain a highly
attractive jurisdiction.

At the beginning of the pandemic
business slowed down a bit, because
nobody was used to working from homeand notary offices were not open. Somebusiness could not be done but, after
a couple of months, everybody founda way to work around those issues.
Governments, tax authorities are getting
more flexible in accepting electronic
signatures and electronic filings.
TMF Curaçao expert



77 Cayman Islands

512021 (75)2020 (69)

The Cayman Islands is ranked as the simplest jurisdiction in the
GBCI, driven by the jurisdiction’s very simple accounting andtax regulations. Incorporating a foreign entity is an extremely
straightforward and streamlined process. However, while the
Cayman Islands was removed from the Financial Action Task
Force (FATF) ‘grey list’, which flags jurisdictions in which money
laundering is not sufficiently legislated against, it was added to
the European Union’s own grey list.
During 2022, the government is expected to pass legislation
which will require limited partnerships (LPs), not justcompanies, to report their Ultimate Beneficial Owners (UBO).
Although it is not expected to impact on complexity, there will
be a remediation project for financial services providers to
obtain and report on their LPs.
The impacts of Covid-19 on how foreign businesses operate in
the Cayman Islands have largely been positive. Pre-pandemic,
wet signatures were expected, if not required, whereas now,
e-signatures are expected going forward. Reporting processes
have been digitally streamlined.

The Cayman Islands government
was quick to respond and adapt its
operations to increase efficiency,
better supporting the financial services
industry during the height of Covid-19.
These changes have now become
standard operating procedures for themost part. In stark contrast to just a
few years ago, all transactions with
the General Registry, such as entity
formation and submissions, such as
regulatory submissions to the Cayman
Islands Monetary Authority and theDepartment of International Tax
Cooperation are now solely conducted
via online platforms.
TMF Cayman Islands expert





52

COMPLEXITY AND
THE FLOW OF FDI

A final finding of this year’s report is around future
investment, with our experts increasingly predicting
simultaneous growth in both complexity and the flowof FDI. This presents an interesting challenge andopportunity to companies – it is more attractive to set
up global operations, while also potentially being harderto navigate.
One third (34%) of our experts think there will be asignificant increase in investment in their jurisdiction in
the next five years, up from just over a quarter (28%) lastyear. Three quarters (74%) agree that their jurisdiction
is making a concerted effort to attract foreign direct
investment.

At the same time, complexity is on the rise. In 2021, 52%of our experts believed their jurisdiction was easier todo business in than its direct neighbours. This year, that
number has fallen to 44%. The proportion reporting that theirjurisdiction is one in which technology is reducing complexity
has fallen year-on-year from 77% to 66% in 2022.

Predicted changes to complexity of managing
a business over the next five years
Rules, regulations, and penalties
8%

36%

38%

17% 1%% saying there will be a significant increase
in investment in the next five years
Accounting and tax

2020

28%

6%

38%

44%

12%

Payroll and human resources
32%

3%

2021

47%

17%

43%

24% 3%

28%
Entity/SPV management
1%

2022

26%

34%

* Total is not 100 because individual percentages
are rounded to the nearest whole number.

 Significantly more complex

 Slightly simpler

 Slightly more complex

 Significantly simpler

 Neither more nor lesscomplexGLOBAL BUSINES S COMPLE XIT Y INDE X 2022

CONCLUSIONThe Covid-19 pandemic is receding but war in Ukraine
has demonstrated that external events can develop andimpact global business in a matter of days. This year’s
GBCI shows that setting up and maintaining business
entities around the world is already a very complex
undertaking, without additional external pressures.

government agencies learn how best to use it, or wherea business is expected to adapt to multiple systems andreport to numerous agencies or levels of government.

Jurisdictions are enacting legislative changes to alignthemselves to international norms. Global industries areadjusting to the growing demands for ethical businesspractices from customers and stakeholders, especiallyaround environmental and wider societal impacts.

Being aware of wider geopolitical events and the local
factors driving complexity are fundamental to thesuccess of establishing a business in a jurisdiction. Withan increasing number of our local experts predicting asignificant FDI increase in their jurisdiction over the next
five years (34% vs 28% pre-pandemic), opportunities
for expanding into different territories and growing abusiness are undiminished.

At the same time, technology continues to play a role inboth increasing and curtailing complexity. It can simplify
the relationships between government and business,enabling the smooth upload of documentation and theswift conclusion of processes. Or, technology can leadto a sharp increase in complexity, as companies andHowever, companies and organisations must be agile
and prepared for sudden changes to the way they
do business. Staying on top of the changing rules,
regulations and investor trends will help you do businessacross borders, while also giving you the opportunity to
thrive in an unpredictable global landscape.

Technology continues
to play a role in bothincreasing and curtailingcomplexity

Companies andorganisations must be
agile and prepared forsudden changes to thebusiness landscape

53





54

ME THODOLOGYThe Global Business Complexity Index was created by
TMF Group, the experts on global and local businesscomplexity, and Savanta, a specialist market research
agency. Combining subject-specific knowledge with asolid grounding in data and analysis, the GBCI 2022 isbuilt on robust multi-method research.
The index is generated from an in-depth survey of TMF
Group’s in-market experts in 77 jurisdictions, and thedata is also compared to the survey results used in lastyear’s GBCI report. The survey covers three areas ofbusiness operations:• Accounting and tax• Global entity management• Payroll and human resources
The data for each jurisdiction was statistically weighted
and combined to produce an overall complexity score, as
well as a score in each of the above three areas. Visuals
are based on survey results across 2020, 2021 and 2022.
Those that answered ‘don’t know’ in the survey havebeen excluded from the analysis.
.

About Savanta
Savanta (www.savanta.com) is a fast-growing data,
research, and consultancy firm. We inform and inspirechange through cutting-edge data collection andanalysis across a wide range of sectors.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2022

55

GLOSSARY

AML

Anti-money laundering refers to a suite of laws
and regulations that aim to stop criminals
from claiming illicit funds as legitimate
income.

BEPS

Base erosion and profit shifting refers to tax
avoidance strategies used by multinationals,
and the OECD regulations used to combat
them.

CRS

The Common Reporting Standard is an OECDinitiative to combat tax evasion. Participating
jurisdictions have to require financial
institutions in their jurisdictions to disclose
information annually on financial accounts
held with them by foreign residents, and torequire the local assigned regulatory authority
to exchange relevant information with theaccount holder’s country of residence.

Economic
substance

FATCA

Economic substance is a principle ininternational tax that determines that areasonable level of local economic activity
must exist for an enterprise to claim tax
residence in a specific jurisdiction, and that theestablishment should exist in that jurisdiction
for a more significant purpose than only the
reduction of tax liability.
The Foreign Account Tax Compliance Act is
a US federal law requiring foreign financial
institutions to disclose the financial accountsof their customers who are US persons or
entities that are controlled by US persons,under penalty of substantial withholding tax on
all US source income.

GDPR

The General Data Protection Regulation is a
European Union law that sets out rules forprotecting the personal data of EU individuals.

Globalisation

Globalisation is a process of global
convergence whereby economies and cultures
become increasingly interconnected andaligned around the world.

IFRS

International Financial Reporting Standards
are a set of global standards issued by
the IFRS foundation and the International
Accounting Standards Board.

Incorporation

Incorporation refers to the process ofestablishing a new legal entity.

OECD

The Organisation for Economic Co-operation
and Development is an internationalorganisation that aims to promote global
trade.

PSC

A ‘person with significant control’ is a term
used in various global regulations to refer to aperson who has a significant level of control or
influence over the actions of a legal entity. The
exact definition varies according to the laws ofdifferent jurisdictions.

UBO

The ‘ultimate beneficial owner’ refers to anatural person who directly or indirectly owns
or controls a significant interest in an entity
or arrangement. The exact definition of UBO
and what constitutes significant interest varies
according to the laws of different jurisdictions.

While we have taken reasonable steps to provide accurate and up-to-date information in this publication, we do not give any warranties orrepresentations, whether express or implied, in this respect. The information is subject to change without notice. The information contained in thispublication is subject to changes in (tax) laws in different jurisdictions worldwide.
None of the information contained in this publication constitutes an offer or solicitation for business, a recommendation with respect to our services,a recommendation to engage in any transaction or to engage us as a legal, tax, financial, investment or accounting advisor. No action should be taken
based on this information without first seeking independent professional advice. We shall not be liable for any loss or damage whatsoever arising as aresult of your use of or reliance on the information contained herein.
This is a publication of TMF Group B.V., P.O. Box 23393, 1100 DW Amsterdam, The Netherlands (contact@tmf-group.com). TMF Group B.V. is part of TMF
Group, consisting of a number of companies worldwide. Any group company is not a registered agent of another group company. A full list of the names,
addresses and details of the regulatory status of the companies is available on our website: tmf-group.com© June 2022, TMF Group B.V.

ABOUT TMF GROUPWE MAKE A COMPLEXWORLD SIMPLE

One world of local service
TMF Group is a leading provider of critical administrative
services, helping clients invest and operate safely aroundthe world.
Our 9,100 experts and 120 offices in 85 jurisdictions
worldwide serve corporates, financial institutions, asset
managers, private clients and family offices, providing the
combination of accounting, tax, payroll, fund administration,compliance and entity management services essential to
global business success.
We know how to unlock access to the world’s most attractive
markets – no matter how complex – swiftly, safely andefficiently. That’s why more than 60% of the Fortune Global
500 and FTSE 100, and almost half the top 300 private equity
firms, work with us.
Our unique global delivery model, underpinned by ourinnovative digital platforms, means we can cover sectors
as diverse as capital markets, private equity, real estate,pharmaceuticals, energy and technology, with experts on
the ground providing local support.
With year-on-year growth averaging 8% since 2013,
TMF Group is a trusted and reliable partner. Whether
operating across one border or many, with a handful of staff
or several thousand, we have the business-critical support
you need to expand, operate and grow while remaining
compliant, everywhere.

www.tmf-group.com