ON

GLOBAL BUSINESS10C O M P L E X I T Y I N D E X GBCI
2023

CELEBRATING
10 YEARS
OF GBCIYEARSGEOPOLITICSENTIT YM A N AG E M E N T

COMPLIANCEI N F L AT I O N

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

ESG

Layers ofcomplexity:
the challengesof cross-borderbusiness
compliance

The tenth edition of the Global Business Complexity Index marks adecade of invaluable insight from TMF Group on the challenges of doing
business across borders.
Since the publication of the first report in 2013, the GBCI has increased
in size and scope, now ranking 78 jurisdictions for the complexity of theirbusiness environments.

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Our experts have combined their knowledge and analysis of more than
200,000 data points over the past ten years, to produce an authoritative
and trusted annual index and roundup of compliance trends, that helps
you to navigate business complexity around the world.

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CONTENTS
Foreword

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Core business areas

Introduction

2– Accounting and tax

28– Global entity management

34– Human resources and payroll

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Global trends– Geopolitical and economic turbulence4– Global compliance challenges

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Ten least complex jurisdictions

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Conclusion

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Methodology

54

Glossary

55– Environmental, social and governance(ESG) considerations
GBCI rankings 2023

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Ten most complex jurisdictions

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GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

FOREWORD

We at TMF Group are delighted to be able to bringyou our 2023 Global Business Complexity Index,
looking at differences in the rules and requirements
for doing business in 78 jurisdictions around theworld. This is the tenth anniversary of the report firstcoming out and we continue to look for ways to makeit increasingly useful to firms making investment
decisions around the world.
The 78 jurisdictions we cover capture the world’s
largest economies and investment hubs, representing
72% of world population, 92% of world GDP and 95%
of net FDI inflow. We look at nearly 300 factors ineach country. We made the decision last year to treat
the data as a public good that is accessible to all.
That continues to be the case and the data, along withother useful indices and sources for doing businessaround the world, are now available on our website:
tmf-group.com/dashboard
World trade is in recovery from the difficult years of
the Covid-19 pandemic. Challenges of course remain
including the ongoing war in Ukraine, associatedsanctions and geopolitical tensions. Rising interest
rates have also been the trigger for stresses in thefinancial markets that have so far been contained byprompt intervention by relevant authorities.
Against that backdrop, we want to do all we can tosimplify the path to investing and operating aroundthe world. Trade and investment stimulate economic
growth. Complex places to do business are often
among the most attractive, whether that involves
gaining access to natural resources, workers or
consumers.
Our message in comparing the complexity of thesejurisdictions isn’t to deter investment but simply tomake sure that firms investing are ready to copewith the rules and requirements in each location. At
the same time, we hope that the work and rankings
encourage governments to reform, simplifying
wherever possible – lower complexity is associatedwith higher wealth in a country, encouraging not justexternal investors but local entrepreneurship andbusiness activity.

Mark Weil
TMF Group CEO

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INTRODUCTION

The Global Business Complexity Index 2023 (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 across78 jurisdictions.
The GBCI 2023 is based on 292 indicators relating tobusiness complexity and provides in-depth analysisof global and local challenges impacting on the easeof doing business around the world. These data
points are used to compile a global ranking of the
78 jurisdictions, based on the complexity of theirbusiness environments and covering legislation,compliance, accounting procedures, tax regimes,
human resources (HR) rules and payroll processes.

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GLOBAL
THEMESGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

1
Geopolitical andeconomic turbulence
We explore the impact that
global economic factors suchas inflation, employee attrition
and the war in Ukraine are havingon business. We also examine
how geopolitical challenges areaffecting the expansion andgrowth plans of companies
around the world.

2

I N F L AT I O N

CONFLICT

MARKE T CONFIDENCE

R EG U L AT I O N

R E P O RT I N GGlobal compliancechallenges
L EG I S L AT I V E U -T U R N S

With global compliance legislation
expected to tighten in the future,what will this mean for businesscomplexity? We will explore howchanges in rules and regulations
have been exacerbated or
expedited by the geopoliticalsituation, and how increasing
compliance requirements aremaking some jurisdictions more
attractive than others.

3
Environmental, socialand governance (ESG)
considerations
We examine how the increasing
importance of ESG criteria
means that authorities are further
defining what is required ofbusinesses, in particular aroundthe environment, diversity andinclusion.

S U S TA I N A B I L I T Y

D I V E R S I T Y & I N C LU S I O N

T R A N S PA R E N C Y

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GLOBALTHEME

CONFLICTI N F L AT I O N#1GEOPOLITICAL AND
ECONOMIC TURBULENCE

MARKE T CONFIDENCESANCTIONSPOLITICSE C O N O M I C O U T LO O K

Despite political, geopoliticaland social expectations
remaining stable, there is asense that businesses may
be less open to
global expansion than inprevious years

S TA B I L I T YGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

LikelyAgreement that over the next five years, jurisdiction will…

Be politically and geopolitically stable 2020 2021

 2022

 2023Be socially stable
71%
73%
68%
70%

Be economically stable

77%
77%
70%
74%

Be more appealing to operate in that is right now
82%
73%
70%
71%

Confidence in future economic stability
has dropped since 2020
Since 2020, confidence in the economic stability ofjurisdictions over the next five years has been waning.
Political, geopolitical and social stability predictions have,
however, remained mostly stable. This is surprising given
recent global events, such as the Covid-19 pandemic, war
in Ukraine and unprecedented rates of inflation aroundthe world.

“Currently, Ukraine is one of the more
complex locations to do business forsafety reasons, as a result of military
action effective 24 February 2022.”
TMF Ukraine expert

Despite political, geopolitical and social expectations
remaining stable, there is a sense that businesses may
be less open to global expansion than in previous years.
In 2020, 74% of those jurisdictions surveyed reported thatbusinesses would find it more appealing to operate there
over the next five years. This has dropped to 65% in 2023,
suggesting that optimism has faded somewhat, andorganisations may be taking a more cautious approachover the coming years.

Inflation is having significant impact globally
Economic stability is where jurisdictions have observed
the greatest drop in confidence. In 2020, 82% of

74%
64%
61%
65%

jurisdictions were confident about their future economic
stability – this figure has dropped to 71% in 2023.
Inflation is widespread and is pointed to as a factor
causing significant issues. While it is impacting different
jurisdictions in distinct ways, there is no doubt that theeffects of the current inflationary pressures are likely to befelt for some time to come.
For example, in Vietnam where strong post-pandemic
economic recovery was recorded in 2022, with GDP at
8.02%; growth is currently forecasted at 6.5%, so lower
for 2023. This is due to an expected weakened global
demand in major export markets, likely resulting fromgeopolitical tensions. It’s the same story in other APAC
jurisdictions, such as Thailand, with global headwinds
slowing growth, despite faster than expected recovery
following Covid-19.
In South America, only 40% of jurisdictions haveconfidence in their economic future. Inflation has
been a longstanding problem in the region, so global
economic turbulence is resulting in even greater pressurein the region. For instance, in Venezuela has suffered
hyperinflation over a number of years, while inflation in
Argentina recently reached 95%.

“Venezuela has experienced hyperinflationin recent years. The devaluation of thecurrency has caused five or six zeros tobe taken off the currency.”
TMF Venezuela expert

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GEOPOLITICAL AND ECONOMIC TURBULENCE

Employees are placing pressure onorganisations“The great resignation could be felt by all
businesses in Italy. Most companies felt
the pressure and had to spend big money
to retain talent and compensate forincreased attrition.”With inflation creating huge price increases on essentials
like food, fuel and utilities, employees are seeking more
and more financial support from their employer to makeends meet. This has led to widespread salary demand
increases, and workers seeking better opportunities
elsewhere. 60% of jurisdictions report that inflation has
increased employee attrition. This is often combinedwith skills shortages to create recruitment and retention
challenges for businesses. The ‘great resignation’ isputting pressure on organisations to remain agile
and competitive.

TMF Italy expert

Has inflation impacted employee attrition?

Employees are asking for better financial packages
in 86% of jurisdictions. This is particularly the case in
EMEA where almost all (98%) of jurisdictions surveyed
are noting this trend. Changes to salaries can drive
administrative complexity for organisations. In Argentina,
for instance, inflationary pressure means that salaries
are sometimes being increased several times per year.
Every time this happens, businesses need to makerelevant changes, such as updating payroll and modifying
contracts, creating an ongoing administrative andcost burden.

60%

31%

5%

– Yes – inflation 		– Yes – inflation has– No – inflation has not– Not applicable – we

has increased attrition

noticeably affected
attrition

decreased attrition

haven’t experienced
significant inflation

Past 12 months, trend of employees asking for better financial packages

Overall

4%

EMEA

APAC

98%

93%

North America

South America

64%

56%

86%

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Businesses are taking action due to economic
factors in a majority of jurisdictions

War in Ukraine affecting expansion
and growth plans

As global inflation impacts economic growth worldwide
and causes employees to demand better financial
support, it’s unsurprising that businesses are taking
action to meet demands and recoup lost income.
Measures like hiring freezes, outsourcing, reducing
headcount and closing offices are being taken in
many jurisdictions. Although such actions can work to
support businesses that are struggling financially, theyalso create complexity for businesses to navigate. The
processes of redundancy and business dissolution canbe incredibly cumbersome and bureaucratic, particularly
in jurisdictions with strong commitments to employee
rights such as France, with its strict employment laws a
key factor in making it the most complex jurisdiction inthis year’s GCBI.

Since the start of the war in Ukraine, jurisdictions haveobserved disrupted supply chains and increased energy
prices, as well as barriers to international trade. Thisdrives complexity and makes doing business morechallenging, particularly across borders.

Actions clients are taking asa result of global instability

Such challenges hit harder for those in the shadow of theconflict. For instance, EMEA jurisdictions like Sweden
have experienced increased energy prices, which in turnhave caused longer lead time for some goods to bedelivered. This increases production times, meaning thatbusiness operation becomes slower, more cumbersome
and more costly.

Current impact of the war in Ukraine
Disruption of supply chains

71%

Hiring freeze

62%

Energy price increases

71%

Outsourcing

Trade barriers

57%
Reducing headcount42%
Increase in refugees

42%
53%
Closing offices

53%

Other

16%
None of these

12%

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GEOPOLITICAL AND ECONOMIC TURBULENCE

Long-term impacts of war in Ukraine

63%

63%

Disruptionof supply
chainsCompanies
rethinking
expansion

54%

33%

Companies
revising growthplans

Trade barriers

26%

17%

Long-term
refugeesettlements

Companies
feeling pressure
to take sides

7%

11%

Other

None of theseGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Many jurisdictions that were reliant on Russia and Ukraine
for exports like grain and oil are severely impacted. For
instance, in Germany, the fall in imported goods has
been a key driver of inflation. In Colombia, this was also
the case at the start of the conflict – grain imports wereaffected, which increased inflation, demonstrating thatthe impacts of the war are global, not limited to Europe.
Issues resulting from the war in Ukraine are anticipated
to continue, with the majority (63%) of jurisdictions
predicting ongoing supply chain disruptions. It is having
a clear impact on global business, with over half ofjurisdictions noting that organisations will rethink their
growth and expansion plans. Jurisdictions will need towork harder than ever to attract new investment andrebuild shaky economies.
However, some jurisdictions are finding opportunities
to attract foreign direct investment (FDI). In the USA, forexample, FDI has increased compared to pre-pandemic
levels. In a time of such uncertainty, jurisdictions that canoffer investors relative stability and security can be more
attractive than ever.

56%
44%

Increase in PWFO
clients due
to geopoliticalinstability

This is not only the case for businesses, but also for
private investors. Over half of jurisdictions (56%) that offer
private wealth and family office services, predict a trendof an increase in high net worth individuals seeking a safe
place to invest their wealth due to geopolitical instability.
While the global business environment may feel moreunstable than in recent years, times of hardship canoften serve to create new opportunities for investment
and expansion. For example, in Argentina the shortageof oil worldwide is encouraging greater self-sufficiency
and focus on future export plans. It is hoped this willbolster the economy and aid recovery from the effects ofunprecedentedly high inflation.
Although organisations may feel nervous about
expanding, some jurisdictions are using this time to find amore prominent space in the global market, opening newdoors for business. It’s also likely that governments will
work harder to drive attractiveness and entice investment,
meaning that businesses may find that processes andprocedures are simplified in the coming years.

– Yes

– No

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GLOBALTHEME#2

GLOBAL COMPLIANCE
CHALLENGES

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While the increased
scrutiny of global complianceframeworks can create complexity,
they also work to drive consistency
and predictability for businesses
entering new markets

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GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Global compliance requirements
remain in line with 2022
Compliance requirements, such as reporting on ultimate
beneficial owners (UBO) and persons of significant
control (PSC), are in place to ensure that businesses
and those who manage them remain transparent whenincorporating and operating in foreign jurisdictions.
They have been a core part of compliance processes inlocations around the world for a number of years. Yearon year, the requirement to provide UBO and/or PSC
information to a central register has remained stable ataround 7 in 10 (71%) jurisdictions.
Regulations such as know your customer (KYC) and antimoney laundering (AML) have been adopted by at least
some industries across all jurisdictions. This has been
the case over recent years, demonstrating that theseregulations have been an important and stable methodof holding businesses to account over operationaltransparency and safety.

These regulations have tended to become more stringent
over time. For instance, in Hong Kong the tightening due
diligence checks, KYC requirements and transaction
monitoring has significantly increased the burden on
client due diligence. This is alongside greater monitoringof Hong Kong-based corporate services providers’
activities for clients, especially around payments.
Global regulations such as these can create more
localised complexity. In Mexico, for example, UBO
reporting requirements were introduced in January2022 and the information gathering is extensive, adding
a significant reporting burden for clients. Additionally,
unclear requirements meant it was open to widespreadinterpretation. Public notaries could refuse to incorporate
organisations as a result.

“Local regulations in response to wider
international rules and directives haveincreased and are complex to handle.”
TMF Germany expert

UBO/PSC register statements
71%

Global regulatory burden expected to increase70%

Requirement to provide
UBO and/or PSC
information to acentral register

57%
55%

64%
63%

Information in
the UBO/PSC central
register accessible
to third parties(eg law enforcement)

Requirement tomaintain UBO and/or
PSC register at thecompany’s registeredaddress– Yes (2022)– Yes (2023)

Only 13% of jurisdictions do not expect to see atightening of global compliance regulation as a resultof current geopolitical environment, demonstrating thatthe global atmosphere is driving the need for greatertransparency and understanding of who exactly isinvesting into jurisdictions.

25%
29%

Information in
the UBO/PSC central
register accessible to
the general public

While the implementation of global complianceregulation remains stable, jurisdictions are observing atightening of global compliance regulation such as
KYC and UBO reporting. This is a trend that is set tocontinue in light of geopolitical tensions, such as thewar in Ukraine.

In Curaçao, sanctions introduced against Russian
businesses and individuals mean that KYC checks havebecome more in-depth and rigorous, creating complexity
for Russian organisations. The same can be said forjurisdictions like the UK, Hungary, Australia and Malaysia,
demonstrating that the impacts of the war are being felt
worldwide.
Interestingly, certain jurisdictions such as Serbia are notplacing any sanctions or increased global compliance

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12

GLOBAL COMPLIANCE CHALLENGES

requirements onto Russian businesses and individuals,
meaning they are able to better attract Russian
enterprise. This demonstrates the different approaches
jurisdictions can take during challenging times and how
this impacts both complexity and attractiveness.

Increased reporting requirements can impact
global expansion goals
43% of jurisdictions expect further regulatorycompliance reporting for businesses within the next year.
Organisations can struggle to understand and meet newreporting requirements. One in five (21%) of jurisdictions
expect that the required speed of reporting will increase
alongside the addition of new rules. This will mean thatbusinesses not only have to navigate greater reporting
demands, but they also may be expected to do so in amore rapid manner than previously.
Due to such changes, clients are feeling the pressure.
Only 24% of jurisdictions report that their clients are
generally prepared for increased reporting requirements
and are not feeling pressured. 31% of jurisdictions reportthat clients are generally unprepared, demonstrating thatthey may not yet realise the complexity of what is to come.

Regulation expected to tighten as a result of
the current geopolitical environment

Due to this pressure and increased complexity, we seethat almost half (48%) of jurisdictions report that at least
some companies will rethink their expansion goals. For
instance, pausing incorporation within a jurisdiction
with hefty global compliance reporting requirements, or
perhaps looking for another jurisdiction with more lenient
rules. This demonstrates the true impact that global
compliance legislation and reporting can have, andhow it can limit the attractiveness of a jurisdiction andencourage businesses to look elsewhere.

“We’ve observed an increase of global
regulatory propositions for all countries,
not just for Turkey. Adapting to these local
propositions is the main challenge
for both compliance service providers
and clients.”
TMF Turkey expert

Increased speed of further regulatorycompliance reporting
21%

UBO

79%

KYC
– Yes – Increased speed of reporting

77%

77%

AML legislation

None of these

75%

– No

Client’s preparedness/concern for
future compliance reporting obligations
31%

24%

13%
45%

–

Yes, clients are generally
prepared and not concerned–

Yes, clients are generally
prepared but feel the pressure–

No, clients are generally
unpreparedGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Clients rethinking expansion due toincreased regulatory obligations
Yes, most companies will rethink their expansion goals

10%
Yes, some companies will rethink their expansion goals

38%

No, companies will not rethink their expansion goals

52%

NET: At least some companies will rethink their expansion goals

48%

Global compliance requirements can offer
stability and security for high-net-worth
individuals
Global compliance requirements like UBO, KYC and AML cancreate complexity for businesses, and can cause concern
for clients looking to invest across borders. However, thisincreased focus on global compliance is seen as inevitable
and it is not going away. It’s also well established in certain
jurisdictions, particularly those in the EU, where directives
are handed down to be implemented locally across multiple
jurisdictions. This means that multinational businesses may
already have a better understanding of certain compliancerequirements when entering new jurisdictions. That being
said, there can be nuances that can cause complexity andtake time to be understood by businesses.
However, while global compliance incentives can increase
complexity, they can also drive the attractiveness ofjurisdictions, particularly for private wealth and family office(PWFO) individuals who are seeking safety and security.
For instance, in Singapore, a strong and stable regulatory
framework and political stability are the key factors that
attract foreign investments. Singapore also offers attractive
tax incentive schemes that appeal to high-net-worth
individuals.

Legislative U-turns are impacting nearly
15% of jurisdictions
Although there is an increased focus on stable,consistent compliance requirements globally, somejurisdictions have observed legislative U-turns over the
past 12 months.
More than 1 in 10 (14%) have observed such U-turns.
For example, in the UK, where 2022 was characterisedby unprecedented political turmoil, several pieces oflegislation were introduced and then reversed, typicallyrelated to tax.
In China, the government also backtracked on thepreferential tax rate on employee stock income, annual
bonuses and tax exempted benefits for expatriate
employees, which were due to terminate in January
2022. Although this change does benefit foreign workers
and their international businesses, changes can create
complexity for organisations who can struggle to keep
up with contradicting messages from governments.
Moving forward, we may continue to see legislative
U-turns as governments deal with geopolitical instability
and a changing global business environment. However,
the increased focus on global compliance and legislation
should work to offer stability in such challenging times.
While increased focus on global compliance cancreate complexity, it also works to drive consistency
and predictability for foreign businesses entering new
jurisdictions and pressing forward with global expansion.

Jurisdictions that have observed alegislative U-turn in the past 12 months
14%– Yes – there has been at least somelegislation that has been reversed

86%

– No

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CARBON EMIS SION REDUCTIONRESPONSIBLE INVESTMENTS U S TA I N A B I L I T Y

D I V E R S I T Y A N D I N C LU S I O N

C L I M AT E C H A N G E#3E N V I R O N M E N TA L ,SOCIAL AND GOVE RNANCE( E S G ) C O N S I D E R AT I O N SFR AME WORKSGLOBALTHEME

HUMAN RIGHTSAs the importanceof ESG continues to grow,companies will have tonavigate new requirements
beyond simple box-ticking
exercises and commit toreporting on their
ESG indicators

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GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

ESG requirements increasing in importance

Requirements on consumer protections and humanrights (eg modern slavery) are the most common forbusinesses to abide by, which is unsurprising giventhat these are embedded in the way the majority ofcompanies do business. Nearly half of jurisdictions
require companies to report on environmental factors:
44% on greenhouse gas emissions and 46% on
sustainability and reducing waste. These requirements
are higher among EMEA jurisdictions (54% for both) andlowest in North America (29% and 36%, respectively).

Environmental, social and governance criteria arebecoming increasingly prominent, with companies now
required to abide by at least one ESG requirement in the
majority of jurisdictions. In fact, only four jurisdictions(Curaçao, the BVI, Venezuela and Uruguay) don’t requirecompanies to abide by and/or report on any ESG
requirements related to their activities, demonstrating the
global reach of these criteria.

Requirement to abide and/or report on ESG legislation

Consumerprotection

53%

4% 10%

Human rights(eg modern slavery)

33%

55% 1% 19%

Greenhouse gas
emissions

25%

8%

31%

Sustainability andreducing waste

35% 25%

11% 29%35%

NET: Required to abide

86%

79%

61%

60%

NET: Required to report

37%

26%

44%

46%

Ensuring
investments
are responsible
1%

42%

23%

33%

Diversity of workforce(eg gender, ethnicity,
sexuality etc.)

Rules around payof senior executives

9%

7% 50%

39%

18%

34%

20% 23%

NET: Required to abide

57%

51%

43%

NET: Required to report

25%

27%

27%

– Companies required to– Companies not required– None: companies are– Companies required toboth abide by legislation
and report on theiractivities

abide by legislation,
but not report on theiractivities

to abide by legislation,
but are required to reporton their activities

not required to abide bylegislation or report on
their activities

25%

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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 ) C O N S I D E R AT I O N S

Employee demographics: Reports required to government authorities

All organisations

2020

2021

2022

2023

28%

41%

47%

49%

Global focus on environmental
sustainability and diversity and inclusion
In recent years, many governments and authorities
have made concerted efforts to lead the way in holding
businesses to account in reducing their carbon footprint.
In Malaysia, the government’s ambition to achievecarbon neutrality by 2050 is particularly progressive
relative to other ASEAN countries. Companies in
Malaysia are actively pursuing ESG programmes, andmultinational corporations have energy consumption asa key focus in ESG commitments.
Another ESG legislative area which is becoming
increasingly important is guaranteeing diversity in theworkforce. Half of jurisdictions (51%) require companies
to abide by laws relating to diversity of the workforce,with over one quarter (27%) requiring companies toreport on it.
Almost half (49%) of jurisdictions require all companies
to submit reports on employee demographics togovernment authorities, which has continued to
grow year on year (28% in 2020, 41% in 2021, 47% in2022). In South America, 80% of jurisdictions require
all companies to report on employee demographics,
followed by 64% of jurisdictions in APAC.
France mandates reporting based on diversity, including
disability and gender pay gap. Although EU legislation ismore demanding when looking at diversity and inclusion,
France was an early adopter of such legislation andleads the way for European jurisdictions. Similarly in New
Zealand, there is more onus in reporting diversity andinclusion metrics for listed companies when preparing
audited financial statements.

Burden of ESG reporting lies with listedcompanies, but private companies
increasingly reporting on ESG voluntarily
Currently the burden of reporting and abiding by ESG
legislation largely falls on public and listed companies.
To provide an example, as of January 2022, new rules in
Switzerland require companies of public interest, suchas listed companies or large companies regulated by the
Swiss Financial Market Supervisory Authority (FINMA),
to issue public annual ESG reports.

“Even if it's not mandatory, the biggest
companies are enabling and creating
programmes of ESG initiatives. The
directors of those companies arerecommending that others join thisinitiative. So even though it is notmandatory, it has a good reception within
the industry, because it's being promotedby the owners of the businesses.”
TMF Colombia expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Preparation for ESG legislation

Total
23%

10% 25%

8% 8%

42%

62%

34%

15%

NET: Prepared– Yes, clients areNorth
America

generally preparedand not concerned

25%– Yes, clients are

generally preparedbut feel the pressure

Interestingly, there is a trend for private companies toreport on their ESG activities voluntarily. This is partly
to be prepared for more widespread mandatory ESG
reporting in the coming years, but it is also driven by
consumer expectations for businesses to operate in amore sustainable, responsible and transparent way.
In certain jurisdictions, some private companies,
including small and medium sized enterprises, will
be required or already are required to report on ESG
indicators. The main reasoning behind this is that thesecompanies are part of the supply chain or are businesses
linked to larger entities, so need to be also transparent
on their main ESG risks and impacts, in order to allow thelarger entities to be able to use their data for their own
ESG-related reporting.

Fast rise of ESG reporting means clientsare unprepared for new requirements
Despite the rising importance and requirements for
ESG reporting, TMF Group experts say that clientsare generally unprepared for new and expected
ESG legislation. This is the case for 42% jurisdictions
globally, with this being highest in EMEA (51%) andSouth America (50%).
With reporting requirements for ESG likely to increase,and not just for public and listed companies, it is likelythat companies will continue to feel the pressure. Not
only will there be a pressure to navigate the new andSouthAmerica
30%

20%

APAC
15%

23%

11% 3%

31%

31%

51%

50%
20%

– No, clients are

EMEA

54%

generally unprepared

35%
38%

– Not applicable, there isno new and/or expected
ESG legislation

upcoming legislation, but there is also an administration
and resourcing cost implication which is affecting large
and listed companies in multiple locations (cited, forexample, by our experts in South Africa).
As the importance of ESG continues to grow, companies
will have to navigate new requirements beyond simple
box-ticking exercises and commit to reporting on their
ESG indicators. However, given that ESG requirements
are in their infancy in many jurisdictions, the impacts andfuture of ESG reporting remains unclear.

“Finding the right partner with the right
ESG reporting tools, technology andknowhow will be important. Proper
reporting in line with new requirementsthat could apply to the specific clients.
Understanding how to act and reportin order to be compliant, especially forforeign companies with limited knowledgeof local regulations.”
TMF Norway expert

17





18

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 ) C O N S I D E R AT I O N S

ESG of interest to private wealth, family
office, funds and capital markets clientsTMF Group experts from jurisdictions that offer PWFO
services note that these individuals are increasinglyinterested in investing in ways that incorporate ESG
considerations. Although there may currently be a more
limited impact of ESG on how PWFO clients do business,
new and expected ESG legislation will require clients toseek assistance with specialist providers.
In jurisdictions with significant capital markets activity,
green financing initiatives, such as bank-issued green
bonds and sustainable loans are becoming increasingly
common. For example, in Colombia, there is a law that
regulates green initiatives and sustainability-linked
bonds, and the government announced a plan toincentivise ESG-related investment.
Over the past year, TMF Group experts report that 77%
of jurisdictions with significant funds activity have seen
an increase in fund manager interest in sustainable andsocially beneficial funds, demonstrating the continuinginterest in ESG for funds clients. In India, our experts
report that priority players stress their ESG parameters,
as it makes the investments more lucrative for
global investors.

“As part of the EU, Ireland must comply
with all of the of the EU regulations
around ESG. This will make reporting
more difficult for large companies. It also
impacts the fund and capital markets
industries, as both will want to attract
investors by being ESG compliant.”
TMF Ireland expert

Two thirds (67%) of those jurisdictions with significant
funds activity have committed to the EU’S level 2
Sustainable Finance Disclosure Regulation (SFDR)
reporting implemented in 2022. It means asset
managers and fund providers need to provide
sustainability-related disclosure obligations, as wellas complete mandatory reporting with the aim ofboosting transparency.
Outside of the EU, we also see steps towards ensuringtransparency within the funds space. For example, inHong Kong, an amended circular came into effect inJanuary 2022 providing guidance to asset managers
on enhanced disclosure expectations for funds which
incorporate ESG factors as a key investment objective
or strategy.
In one third (31%) of funds jurisdictions, there islegislation that regulates the marketing of funds
claiming to have a positive ESG impact, which aims tolimit companies, especially large and listed ones, from‘greenwashing’. Although the act of greenwashing isincreasingly scrutinised, the challenge remains to provethat investments are truly focused on ESG.
Despite the growing importance of ESG, there is still work
to do in prioritising this over other business objectives.
For example, in the Cayman Islands, our experts point tothe challenge of convincing investment managers that
ESG should be a factor in decision making for their funds,
as their main objective is to maximise profits.
Although driving profit is key, ESG is increasingly partof the makeup of major corporations. The focus on
ESG is set to continue pushing towards greener andmore ethical ways of working, despite the associatedcomplexities.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Changes in private wealth and family clients in past year
Invest in a moreenvironmentallyfriendly way

Invest in a waythat improvessocial outcomes

29%

43%

14%

57%

4% 9%

Invest in companies
or funds that aregoverned responsibly

44%

30%

14%

NET: Increase

71%

54%

70%

NET: Decrease

0%

4%

0%

– Significant increase– Slight increase– No changes– Slight decrease55%– Significant decrease

Green financing initiatives

67%

70%
65%

61%

Bank-issued
green bonds

Sustainable loans

44%

11%
13%

52%

Transition bonds
issued by privatecompanies (to raisemoney forgreen transition)– 2022– 2023

None of these19							20THE GLOBAL
BUSINESSCOMPLEXITYINDEX
RANKINGS 2023

CELEBRATING
10 YEARS
OF GBCI

2023

PAGES

22 – 27

TEN MOST COMPLEX JURISDICTIONS



2022

2021

1  France		

(2)

(2)

2  Greece		

(6)

(13)

3  Brazil		

(1)

(1)

4 – Mexico		

(4)

(3)

5 – Colombia		

(5)

(4)

6  Turkey		

(7)

(5)

7  Peru		

(3)

(24)

8 – Italy		

(8)

(15)

9 – Bolivia		

(9)

(8)

10  Argentina		

(12)

(7)

11 – Indonesia		

(11)

(6)

12  Poland		

(10)

(10)

13  Belgium		

(17)

(17)

14  Chile		

(15)

(40)

15  China		

(14)

(12)

16 – South Korea

(16)

(11)

17  Ukraine		

(31)

(35)

18  Dominican Republic (28)(41)

19 – Paraguay		

(19)

(58)

20  Croatia		

(34)

(28)

21  Malaysia		

(22)

(22)

22  Venezuela

(21)

(33)

23  Kazakhstan

(24)

(16)

24  Romania		

(33)

(29)

25  Germany		

(20)

(27)

26  Nicaragua

(18)

(14)

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

2022

2021

2023

2022

2021

27  Panama		

(35)

(25)

53  United Arab Emirates (61)(60)

28  Hungary		

(38)

(43)

54  Taiwan		

(43)

(32)

29 – Slovakia		

(29)

(46)

55  Bulgaria		

(50)

(49)

30 – Egypt		

(New)

(New)

56  Cyprus		

(53)

(54)

31  Philippines

(30)

(37)

57  Republic of Ireland

(54)

(74)

32  Slovenia		

(26)

(23)

58  Qatar		

(55)

(66)

33  India 		

(25)

(20)

59  Singapore

(58)

(50)

34  Austria		

(23)

(38)

60  Australia		

(65)

(62)

35  Uruguay		

(27)

(39)

61  Guernsey		

(66)

(55)

36  Russia		

(32)

(26)

62  Switzerland

(60)

(56)

37  Guatemala

(36)

(36)

63  Israel		

(64)

(63)

38  Portugal		

(37)

(19)

64  Mauritius		

(62)

(68)

39  Sweden		

(13)

(52)

65  Czech Republic

(63)

(61)

40 – Ecuador		

(40)

(18)

66  Luxembourg

(57)

(65)

41  Spain		

(39)

(34)

67  Norway		

(69)

(51)

42  Serbia		

(41)

(48)

68  United States

(71)

(71)

43  Japan		

(51)

(59)

69  Malta		

(67)

(64)

44 – El Salvador

(44)

(69)

70  Jersey		

(72)

(45)

45 – Costa Rica

(45)

(9)

71  New Zealand

(70)

(67)

46  Vietnam		

(42)

(21)

72  United Kingdom

(68)

(53)

47 – Honduras		

(47)

(31)

73 – British Virgin Islands (73)(72)

48  Canada		

(52)

(57)

74 – Hong Kong

(74)

(76)

49  Jamaica		

(59)

(30)

75  The Netherlands

(56)

(70)

50  Finland		

(46)

(42)

76 – Curaçao		

(76)

(73)

51  South Africa

(48)

(47)

77  Denmark		

(75)

(77)

52  Thailand		

(49)

(44)

78  Cayman Islands

(77)

(75)

TEN LEAST COMPLEX JURISDICTIONS

2023

21

PAGES

46–51





22

TEN MOST COMPLEXJURISDICTIONS
2023

2022

1



France			(2)2Greece			

(6)

3



Brazil			

(1)

4

–

Mexico			

4)

5

–

Colombia			

(5)

6



Turkey			

(7)

7



Peru			(3)8–Italy			

(8)

9

–

Bolivia			

(9)

10 

Argentina			 (12)

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

 1

France2022 (2)2021 (2)France takes the top spot in this year’s GBCI, following two
years in second position. Factors making it the most complex
place to do business include the focus on maintaining
traditional ways of working, such as the use of the Frenchlanguage, and the continuation of historically stringent
employee protection laws.
France tends to be an early adopter of international legislation,
partly because of its role at the forefront of the EU. Complexity
can increase as a result of the country implementing changes
quickly, but in the long term it becomes more simplified andstable, with investors knowing where they stand comparedto jurisdictions that may be slower at implementing
global standards.
The commitment to standards in France also means thatthe business environment is safer, and organisations andworkers alike are offered greater protection by the Frenchgovernment. The French government has continued to provide
businesses with support during challenging times, fromthe Covid-19 pandemic to the high inflation rates France iscurrently witnessing. For example, as energy prices rocket
worldwide, the French government has been offering support
to cover expenses, particularly for smaller and more vulnerable
businesses, providing crucial assistance during tough times.



2 Greece

2022 (6)2021 (13)Greece moves up from sixth place in 2022, continuing to rankvery highly for the complexity of its business environment. A
key factor is the number of changes in legislation that occur
each year, particularly when it comes to accounting and tax.
The country is part way through a large scale digitalisation
programme, which is causing issues for businesses navigating
the new requirements. For instance, the implementation of
MyData for accounting requires all submissions for books
and balance sheets to be electronic. As is the case for wider
legislative changes observed in Greece, new digitalisation
requirements are demanding multiple deadlines with different
credentials on different platforms, meaning businesses needtime to understand and adapt to the new processes. These
new processes are also draining the Greek authorities’ own
resources, meaning it takes longer for them to respond toqueries and book necessary appointments.
Within the next couple of years, an electronic timecard system
will be implemented for employees in Greece, meaning
investment will be required by businesses to implement thisnew way of working. It is likely that, given its digital journey andhistoric complexity, Greece will continue to be a challenging
environment as it adapts to new requirements. However, it isexpected that, in the long term, digitalisation will make thingseasier for business.

Despite the legislative challenges, France is a highly attractive
jurisdiction in which to do business, and in certain areas thegovernment is making progress in developing more simplified
processes.

“While France is a business-friendly
country, it can also be challenging
for foreign businesses. Labour laws
are particularly complex with a highprotection of the employees, theregulatory environment is very strict,and the French language still remains
predominant in many areas, particularly
with administrations.”
TMF France expert

23“Greece remains a challenging
environment to do business in,especially for foreign investors. We haveofficially entered the realm of electronic
bureaucracy, with hundreds of platforms.”
TMF Greece expert





24

 3

TEN MOST COMPLEX JURISDICTIONS

Brazil2022 (1)2021 (1)Brazil drops down two places from its place at the top of the
ranking last year, but it continues to be a challenging place todo business. A key driver to its complexity lies in accounting
and tax processes in the jurisdiction. The Brazilian tax system
is made up of three layers – city, state and federal – and thesemake for a densely regulated environment. On top of this, there
are frequent tax regulation changes. For a business to enter
the Brazilian market, they need to understand the demanding
structure and seek expertise to navigate the market.
Despite this, steps have been taken in Brazil to make operation
simpler for businesses. Over the past 12 months, there has
been a simplification of foreign exchange control rules andother requirements that are specifically applicable to foreign
investors. Additionally, for funds services there has been arevision of the regulatory environment, which is expected tomake processes simpler in the future. With Brazil moving
towards the global regulatory framework for compliance,
consistent processes and legislation should make things easierfor businesses that are already familiar with global regulation.
Although the challenging geopolitical environment is causing
difficulties for businesses globally, some jurisdictions like Brazil
have become more attractive to investors. For example, manybusinesses that are now unable to operate in Russia have
moved to Brazil.

 4

Mexico2022 (4)2021 (3)Mexico’s high ranking is mainly due to the mandated processes
in place in the jurisdiction. For instance, there are still a lotof face-to-face requirements in place, which can present
challenges for international businesses with senior directors
residing elsewhere.
Furthermore, legislation can be unclear and open tointerpretation. For example, in 2022 Mexico introduced
UBO requirements. There was a lack of clarity when they
were launched around what documentation was needed forbusinesses to incorporate. Notaries who approve businesses
without the correct documentation are subject to hefty fines
and sanctions, so tend to take a risk-averse approach to signing
off required documents. This means that organisations canfind it difficult to incorporate in Mexico.
The Mexican government is also facing some controversy
due to its position on renewable energy, taking a clear stanceto block foreign investment into renewables in favour of
supporting more traditional fuel-based energy sources. Thisis a polarising decision because the negative environmental
impact is countered by the financial support it provides to themany Mexicans working in fossil fuel industries.

“Brazil is full of opportunities for longterm investments. Short-term initiatives
will be further impacted due to Brazilian
complexity and bureaucracy.”“Most of all, investors need to trust therule of law. It exists and it is observed.
They also need to be ready to go througha period of understanding processes andprocedures to stay compliant and theyneed to adapt to the way of doing
business in Mexico.”

TMF Brazil expert

TMF Mexico expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

 5

Colombia

2022 (5)2021 (4)When foreign businesses enter Colombia, there can be some
initial struggle to understand how certain laws and regulations
work. Colombia is a highly regulated jurisdiction, so adhering to
its many laws is an essential aspect of operation. For instance,
when transferring funds between jurisdictions, specificrequirements need to be met, such as filing an exchange
market form. Once businesses understand and are familiar
with this process it doesn’t create too much complexity, but it’s
an example of how adapting to doing business within Colombia
can initially prove challenging.
In the past 12 months, Gustavo Petro has been elected as
the new president of Colombia. Petro is left wing, which
has created some tension as, prior to his election, thegovernment was more right wing. Furthermore, tax reformthat was approved in December 2022 will bring complexity fororganisations operating within the jurisdiction, as they adapt tothe changes.
Colombia has also seen a devaluation of the Colombian peso,
related to wider issues linked to inflation. This meant someorganisations halted incorporation plans in 2022. In early
2023, the financial climate became more stable, so businesses
appear to be resuming plans to enter the jurisdiction.

“Colombia is a country open to investment.
Regulation and processes may be difficult
to understand at first, but after a coupleof months investors seems comfortablewith the complexity of the country and cannavigate it properly.”
TMF Colombia expert

 6Turkey25

2022 (7)2021 (5)Turkey remains one of the more complex jurisdictions forforeign businesses to operate in, in part driven by the large
number of legislative changes that occur each year and therelatively brief period allowed to adapt to these changes.
Over the past year, the Turkish economy has been sufferingfrom hyperinflation and currency fluctuations, which is worse
in Turkey relative to global indicators. Hyperinflation meansthat companies are having difficulties with price stability
and are having to set their prices in a stable and convertible
foreign currency. Currently there is a lack of structured fiscal
and monetary policies in place to help the economy fightthese challenges, making it challenging for businesses to haveconfidence in the market that they are operating in.
Turkey has observed an increase in global regulatory
propositions in recent years. Adapting to these changes iscausing complexity for businesses. Although this is causing
challenges in the short term, it is expected that once providers
and businesses are familiar with the new processes, it will
make the jurisdiction more attractive for foreign businesses
wishing to operate transparently.
Turkey will have a general election in the coming year, so somepolitical tension is anticipated. This means that some major
investments may be put on hold until there is a more stable
political environment.

“In an environment where Turkey offers
services to multinationals, and thedecision-makers are outside of Turkey,
they need to be aware of frequent changes
in regulation and act quickly in adapting to
the required changes as thesigning authority.”
TMF Turkey expert





26

 7

TEN MOST COMPLEX JURISDICTIONS

Peru2022 (3)2021 (24)Peru retains its place among the most complex jurisdictions in
the GBCI due to the bureaucracy of certain processes, such as
the need for face-to-face interactions and multiple registrations
with public notaries in order to incorporate. This cumbersome
process means that establishing an entity typically takes
around 20 days in Peru, whereas in jurisdictions at the otherend of our ranking, incorporation can happen in a matterof hours.
Political unrest in Peru, including widespread protests, hascaused uncertainty. Despite the great opportunities and natural
resources Peru boasts to drive its economy, confidence can be
shaky for organisations entering the country. More time may beneeded to rebuild a sense of stability to attract FDI.
Due to the abundant natural resources in Peru, sustainability
is a key topic and ESG is increasingly becoming a focus. For
instance, within the mining industry large mines employ stateof the art technology to drive green ways of doing business.
However, Peru has many illegal mines that do not follow green
ways of working and that also provide funding that drive
political unrest.
Peru, like many other South American jurisdictions, has faced
issues with inflation, compounded by the war in Ukraine. Peru
was unable to import as much urea as before the war, driving
up prices within the jurisdiction. This demonstrates the wide
reach of a war that impacts jurisdictions across continents.

“Peru is a country with a focus on
industries like farming, mining, fishing andinfrastructure services. You need to keep
in mind the political situation, but there aremany opportunities, the economy is strong
and business continues.”
TMF Peru expert

 8

Italy

2022 (8)2021 (15)

Italy continues to feature at the complex end of the GBCI
rankings, largely due to its complex regulatory system, which
frequently changes and is noted for the inefficiency of someprocesses. Due to the frequent changes in regulation there isoften room for interpretation, and a lack of understanding fromthe authorities’ perspective, creating challenges for businesses.
The areas of payroll and human resources are particularlycomplex in Italy. Employment law strongly favours employees,
and it is costly for businesses to terminate underperforming
staff. Businesses are guided to seek legal advice before
starting the process, as trade unions are increasingly involved.
Furthermore, Italian employers are particularly impacted by the‘great resignation’. Many companies are feeling the pressureand have had to invest in retaining employees to compensate
for increased attrition. The impact of this has been higher
in Italy than other jurisdictions due to its traditionally lower
salaries. In years to come, there is no expectation thatlabour laws will be simplified, so HR and payroll complexities
will persist.
Despite complexities for businesses operating in Italy, as
the third-largest economy in the EU, the country has many
advantages, such as its location as a major shipment hub andentry point to the European single market.

“Italy has a high degree of industrialisation,with only Germany producing morein Europe. R&D investments arecomparatively high and infrastructure
is very well developed. Due to the highdegree of innovation and the traditionallyhigh quality of Italian goods and services,many companies have been able toachieve excellent global market positions.”
TMF Italy expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

 9

Bolivia

2022 (9)2021 (8)Bolivia is considered a complex place to do business due tothe focus on localisation. The authorities mandate that certain
processes must be completed in Spanish, which can serve asa barrier for foreign businesses as they may need to find a local
partner or translator to support.
There are also residency requirements. A public limited
company operating in the country must have a Bolivian national
or a legal resident on the board of directors and as a legal
representative of the company. This increases complexity forforeign businesses seeking to enter the jurisdiction who do
not have local ties in place during the incorporation process,needing to appoint new senior team members to satisfy
this requirement.
Bolivian accounting standards also require businesses to keep
their records in the local currency – Bolivian bolíviano. It’s
not a currency that international businesses may have comeacross before, so this can cause issues. Financial statements
must also be signed by the same accountant who keeps theaccounts, which again localises the process.
This focus on localisation also extends to the workforce.
No business in Bolivia can have more than 15% of foreign
employees on its payroll. This prioritises Bolivian employment
over foreign employees, which is positive for Bolivian residents,
but can cause problems for foreign organisations who have amore international workforce.

“Bolivia is in the heart of South America.
Foreign companies can consider it asa strategic country to accumulate theirproducts and distribute them to therest of that region.”

10 Argentina

27

2022 (12)2021 (7)Doing business can be complex for foreign businesses inArgentina for a range of reasons. For instance, incorporation
can be quite cumbersome and slow due to a need for multiple
points of interaction with authorities.
Rules and regulations in Argentina also change regularly which
can drive complexity for businesses that need to adapt to new
ways of working. The jurisdiction takes a traditional approachto supporting workers, which although positively protects
employees, can create difficulty for businesses who need tomeet certain stringent requirements.
Further complexity has risen in recent years due to massive
inflation in Argentina. The jurisdiction historically has faced
hyperinflation, so the current global economic conditions havecompounded this driving inflation rate to a staggering 95%.
Consequently, businesses need to adjust salaries several times
each year. Businesses need to adjust and readjust payroll,
contracts and other employee documentation which can betimely and costly.
Despite the complexity that inflation brings, the war in Ukraine
has also created opportunity for Argentina. The jurisdiction is
working to become more self-sufficient for fuel and plans tobecome an exporter in future. Therefore, it’s likely Argentina’s
economy will be boosted moving forward as it works to fill the
global demand for fuel created by the conflict.

“Argentina is a very complex market but
it is full of great opportunities. A marketof 45 million people and great potential
in lithium, oil, mining, renewable energy
and agrobusiness. It has a large industry
market and the direct presence of many
multinational companies.”

TMF Bolivia expert
TMF Argentina expert

28

ACCOUNTINGA N D TA X

ELECTRONIC FILINGTA X A U T H O R I T I E S

D I G I TA L I S AT I O NCOMPLIANCE

E - I N VO I C I N G

Accounting and tax
digitalisation continues
to grow, and rules are
becoming more stringent– even in jurisdictions
where doing business istypically simpler

AUDITINGGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Complexity is on the rise

Rules are becoming more stringent

Accounting and tax are key pillars of business
operations worldwide. They can contribute to theoverall complexity of doing businesses, owing to theburden of their administration and the associatedreporting requirements. They can also carry the threatof consequences as serious as forced terminationof operations or even imprisonment, in the case of
misdemeanours or malpractice. Getting these areas rightis a crucial part of driving any global business forward.

Year on year, accounting and tax rules are becoming
more stringent. For example, it’s now less common to beable to do business without being registered with relevant
tax authorities: this is only possible in 13% of jurisdictions
globally in 2023. This includes those jurisdictions likethe Cayman Islands and the US where doing business istypically simpler and governments actively work to makeall stages of business incorporation and operation as
straightforward as possible.

However, these two areas are becoming more complex
year on year. In 2020, 40% of TMF Group accounting
and tax experts worldwide stated that they anticipatedcompliance would become more complex over the next
five years. This has steadily risen since to 45% in 2023,
demonstrating that many organisations are facing agreater operational burden than they were three years
ago – and one that may become more onerous in the
coming years.

“The audit requirement for some entities,
such as private funds which wasintroduced in the last few years, can be
an extra unforeseen complication forsome clients.”
TMF Group expert, Cayman Islands

Agreement that over the next five years
accounting and tax will be more complex

Ability to do business without being
registered with the relevant tax authorities
2020

2020

40%

4%
13%
17%

2021

2021

39%

3%
12%
14%

2022

2022

3%
9%
12%

2023
2023

44%

4%
9%
13%

45%


Yes



NET – yes (including depending on certain criteria)

Yes, depending on certain criteria

29





30

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

Requirement to obtain local businesslicence prior to becoming operational

Need for the tax/legal representativeof an entity to be a local citizen

2020
36%
39%
75%

2021
35%
40%
75%

2020

2021

21%

23%

2022

2023

35%

33%

2022
38%
42%
79%

2023
4%
9%
13%



Yes



NET – yes (including depending on certain criteria)

Yes, depending on certain criteria

No corporation tax is levied in the Cayman Islands,
for instance, so tax administration for businesses
established there is less complicated. This being said,
additional auditing requirements related to funds haverecently been introduced in the Cayman Islands, meaningthat there are other areas of business administration witha greater burden.

It is also now more common that jurisdictions mandate
the need to obtain a business licence prior to becoming
operational, and the need for tax audits. In 2023,
businesses will need to be audited in 95% of jurisdictions
worldwide, demonstrating that in the vast majority ofmarkets, adhering to accounting and tax standards is
unavoidable.

Some localised aspects of accounting
and tax are on the rise
Auditing of accounts

91%
94%
96%
95%

 2020 2021

 2022Compulsory to have accounts audited
for some / all companies

 2023Specific aspects of accounting and tax administration
are becoming more localised within jurisdictions,requiring those who hold certain positions or fulfil certain
functions within a business to be present in the country
in question, or be a local citizen. This can be complex
for multinational organisations who have sought to findefficiencies or cost savings through accounting andtax centralisation, or for whom directors and senioraccounting and tax advisors may be located elsewhere.
Since 2020, more jurisdictions mandate that the tax
or legal representative of an entity needs to be a local
citizen. This may leave organisations with an unexpectedGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Ability to maintain accounting records
aboard (ie, in a shared service centre)

Is it compulsory for tax invoices
to be issued in electronic format?

2020

2021

2020

2021

78%

66%

38%

41%

2022

2023

2022

2023

75%

74%

51%

53%

Compulsory for at least some companies
to issue their tax invoices in an electronic format

requirement to appoint an additional staff member
with the requisite knowledge or qualifications in thesejurisdictions, or consider the relocation of senior staff
which typically incurs cost.
It is also less common in 2023 for jurisdictions to allow
the maintenance of accounting records abroad, suchas in a shared service centre. This can drive complexity
for international businesses as they are unable to store
accounting records for multiple jurisdictions within
the same central location. For instance, in Bolivia,
accounting must be kept in country, under Bolivian
accounting standards and in local currency. Accountants
must be appointed based on the recommendations of
the National Tax Service. Therefore it’s not simple toadapt and replicate accounting or tax processes used
elsewhere. Localised complexity can create quirks thatcan be cumbersome for international businesses.

Digitalisation can make things simpler
or more difficult
In recent years, more and more jurisdictions haveadopted a digital-first approach for accounting and tax.

On the one hand, this can simplify processes or possibly
open doors to automation or improved scalability.
However, adopting new processes or adapting to new
software, portals or ways of working can also represent aform of complexity for businesses, as they seek to meetincreasingly technological needs.
Since 2020, it has become more and more common
for governments to mandate the issuing and uploadingof tax invoices digitally. For instance, in 2020 just 38%
of jurisdictions required at least some organisations to
issue tax invoices electronically, rising to 53% in 2023.
Similarly, in 2020, only 24% of jurisdictions mandated
that all organisations must upload tax invoices to agovernment platform, rising to 37% in 2023.
This move towards digitalisation is a trend that isincreasing each year and set to continue. Governments
worldwide see digital as the way forward, and most tend
to be turning away from paper-based ways of working.
However, certain jurisdictions do still implement thismore traditional approach to accounting and tax
processes, such as in Egypt where filing in hard copy is

31





32

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

Is it compulsory to upload tax invoices onto a government platform?
2020

2021

61%

24%

61%

15%
NET

39%

2022
27%

53%

12%
39%

2023
35%

53%

12%
47%

37%

10%
47%

Compulsory for at least SOME companies to
upload tax invoices onto a government platform– Yes – compulsory for all companies– Yes, depending on certain criteria it iscompulsory for companies to upload tax
invoices onto a government platform

to upload tax invoices onto a 		government platform“I would say that electronic billing is going
to be very difficult the first two years but inthe future, it will be so much better. It will
be easier - it’s a dream for accountants.
But implementation at the start will be anightmare, for sure.”
TMF France expert

Agreement that it’s easy to customise accounting
software as per local accounting requirements
2020
65%

35%

2021
55%

45%

57%

43%

57%

43%

2022

2023

 Yes it is easy

 No it is not easy

– No

still required. Therefore, physical visits are still needed
to the authorities to complete some processes, creatingcomplexity for international organisations as they needto have an in-person presence within jurisdictions inorder to operate.
On the other hand, digitalisation can also bring its own
complexity. For instance, it’s becoming more difficult tocustomise accounting software for local requirements,
with our experts in 43% of jurisdictions indicating thatit’s not easy, versus 35% in 2020. This demonstrates
that as digitalisation becomes more embedded globally,organisations can face challenges aligning theiraccounting and tax software locally.
Complexity can also stem from the transitional period
as jurisdictions move towards digital processes.
For instance, in Romania, new digital legislation andcompliance requirements such as SAF-T, e-invoicing
and e-transport have been introduced without adequate
planning and preparation. Businesses can struggle toadapt to new and sometimes unclear ways of working.
France, the most complex jurisdiction in the GBCI 2023,
introduced the ‘Guichet Unique’ in 2022 that aims tocreate a ‘one stop shop’ for businesses incorporating
and operating in France. Although in the long term thisonline service will work to simplify the process of doing
business in France, teething issues have been reported,demonstrating that progressive changes can result in
additional work. From 2024, the French government aims

33

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

to begin to introduce the process of electronic billing,which may also bring about some initial complexity.

Governments can offer support to ease
complexity
Due to the rise in accounting and tax complexity being
observed across numerous jurisdictions, governments
are taking a supportive stance to help organisations
meet demands, such as opening helplines and online
guidance so that business can remain compliant.
In 2023, only 5% of jurisdictions worldwide do not offer
guidance for businesses to remain compliant. For

instance, Greece, one of the most complex jurisdictionsin 2023 for accounting and tax, doesn’t offer suchsupport. Authorities can take months to respond toqueries, making compliance more challenging forbusinesses.
Despite some local challenges, the supportive approach
most governments are now taking worldwide works tocombat the rising complexity of the accounting and tax
space. With the continuing tightening of legislation, riseof digitalisation and ever-present tension of local andinternational approaches, it will be interesting to observe
how the sector develops in the coming years.

Guidance from local authorities

87%
90%

87%

79%

91%

82%

83%

30%

28%
30%

Consultative
Province/stateadvice on how
government
to manage anOver the phone
Province/state
helpline
government

Online guidance

35%

83%

entity

11%
30%

14%

29%

27%

25%

32%

Complianceassurance
programmes

Advance transfer
pricing agreement
(APA)

6% 5%
4% 5%

None ofthese 2020 2021

 2022

 2023

16%
16%

13%
22%
19%

Other



34

GLOBAL ENTIT Y
M A N AG E M E N T (G E M )

GI

TI

SA

TI

ON

Some jurisdictions
are becoming simpler
for entity management,
as governments makeefforts to attract
foreign businesses andinvestment

O P E R AT I O N A L R E A D I N E S SG OV E R N A N C E

DIR U L E S A N D R EG U L AT I O N S

D I S S O LU T I O NGLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Levels of government required for incorporation

68% 66% 69% 73%

National
government

39% 42% 38% 36%

City/local
government

Business incorporation and operation
has remained stable in 2022
Globally, the steps a foreign business needs to taketo incorporate in a jurisdiction has remained stablecompared to last year. This includes the length of timeto incorporate a business, the number of bodies needed
to register with, and the type of professional parties
required.
There have been slight increases in the number ofjurisdictions that require contact with the national
government during incorporation, increasing from 68%
in 2020 to 73% in 2023. This has remained stable yearon-year in North America, while both South America
and EMEA have seen increases. Interestingly, in APAC
the number of jurisdictions that require businesses
to contact the government during incorporation has
decreased from 86% in 2020 to 57% in 2023.

More governments look to attract businessthrough initiatives such as digitalisation
There is evidence that entity management is becoming
simpler in some places and ways, such as throughincreasing digitalisation, and more difficult in others,with more bureaucracy in some locations.

22% 27% 22% 21%

Province/state
Province/state
government
government

We see a continuing trend for jurisdictions to moveincorporation processes and other operational elements

Are official submissions to the authorities done
electronically/via the internet?

2020
16% 9%
14% 9%

71%

27%

77%

23%

2021

2022
69%
None of
these

2023
78%

 2020 2021

 2022

 2023

31%

 Yes

 No

22%

35





36

GLOBAL ENTIT Y MANAGEMENT

online, making things easier for foreign businesses.
Since 2020, there are more jurisdictions where official
submissions to the authorities are done electronically or
via the internet, increasing from 71% in 2020 to 78%
in 2023.
In Colombia, with all necessary documentation,
online registration for new entities in the Chamberof Commerce can be achieved in three days, whichbucks the trend historically among South American
jurisdictions. Likewise in Vietnam, most authorities haveestablished official online systems for uploading andupdating new regulations and best practice, as well as
conducting licensing procedures, which has created amore convenient and transparent process for foreignbusinesses.

Governments pushing initiatives to increase
FDI despite global economic slowdown
Another reason some jurisdictions are becoming
simpler for entity management is government focus on
attracting foreign businesses and investment. Even injurisdictions where operating is traditionally complex,
such as France, governments have undertaken initiatives
to attract foreign entities.
Our experts in Malaysia note that, given the possibilities
of a global slowdown in 2023, the new government
announced that restoring investors’ confidence andincreasing FDI are among its top priorities. These include
establishing a special investment scheme to attract
more high-value-added investment that will generatehigher paid employment opportunities.

“Generally speaking, corporate law inFrance has become more consumer- andcitizen-oriented, while still trying to improvethe country’s attractiveness to business.
In recent years, French corporate law
has been governed by two main trends:
modernisation and simplification on the
one hand, and the fight against corruption
and fraud on the other hand.”TMF France expert

case study
Ease of doing business in India
In 2020, India was ranked 18th in the GBCI – this year
it sits in 33rd place. The government in India has taken
steps in recent years to encourage foreign businesses
to invest and do business in the jurisdiction, such as
the ‘Make in India’ initiative, introduced in 2014. Since
then, the government has continued to strengthen theinitiative, such as reforming legislation and liberalisingguidelines and regulations to reduce the complianceburden.

“Burdensome compliance with rules
and regulations have been reduced
through simplification, rationalisation,
decriminalisation and digitisation, making
it easier to do business in India.”
TMF India expert

Recent amendments to legislation focused on easing
incorporation and operation in India are expected tocontinue to reduce complexity in the future. For example,
in less than a decade, around 1,500 redundant laws havebeen repealed and 250,000 compliance requirements
have been reduced by the government.
India has witnessed an increase in FDI flowing into thejurisdiction in recent years, which was made possible bymaking its compliance environment more conducive tobusiness. According to TMF Group’s experts, the Indianauthorities are “aiming for minimum government andmaximum governance”.

Increase in global regulatory requirements
can add complexity, especially when
opening a bank account
Although we see some jurisdictions moving towards a
simplified incorporation process for foreign businesses,
approximately half (49%) of TMF Group experts predictthat entity management will become more complex in
the next five years.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Rules, regulations and penalties – complexity over the next five years

2020– Significantly more complex– Slightly more complex

2021

12% 5%

12%

39%

47%

2022

1%
6%

2023

1%
17%

8%

38%

36%

10%

3%
5%

– Neither more nor less complex– Slightly simpler– Significantly simpler

44%

34%

38%

NET: More complex

49%

40%

43%

49%

NET: Simpler

12%

13%

18%

13%

44%

Is FATCA model 1/2 reporting and/or exchange of information under CRS mandatory for financial institutions?

8%

6%

89%

2020

2021

4%

95%

2022

– Yes

92%

Financial institutions mandate FATCA model 1/2
reporting AND/OR exchange of information under CRS

4%

2023

– No

96%

37





38

GLOBAL ENTIT Y MANAGEMENT

The largest regional year-on-year increases are seenin APAC, where this has increased from 14% in 2022 to
43% in 2023. In Australia, for example, the government’s
commitment to introducing a public UBO register islikely to increase the level of data required from foreignbusinesses operating in the country.
Increasing adoption of global compliance requirements
will make entity management more complex at a local
level, while simultaneously making jurisdictions more
attractive places to do business thanks to their increasedtransparency.
In Hong Kong, the trend of tightening due diligence
checks, KYC requirements and transaction monitoringhas significantly added the burden on client due
diligence, as well as the ongoing monitoring of activities
for corporate services providers. This translates into aneed for greater resources and effort for businesses toremain compliant.

Expectation that foreign investments injurisdictions will continue to increase
Although there is an expectation that entity management
will become more complex globally over the coming
years, 80% of TMF Group experts are still positive that
there will be an increase in investment in their jurisdictionin the next five years. This is a decrease compared tooverall FDI increase expectations from last year’s survey(87%), but still represents a healthy dose of optimism.
Regionally, this sentiment is felt most acutely in North
America (93%) and least in South America (56%).
This demonstrates that despite an increase in global
compliance and the complexities that come with it, they
can still be attractive places to do business.

The number of jurisdictions where companies are
required to submit reports for the Foreign Account Tax
Compliance Act (FATCA) and the OECD’s Common
Reporting Standard (CRS) has increased year on year tonearly all (96%) jurisdictions in 2023.
5

Opening a bank account is a key complexity factor in
an increasing number of jurisdictions. For example,
in Austria opening and operating bank accounts has
become more cumbersome due to enhanced KYC
requirements and monitoring by banks.
In recent years, the time it takes to open a bank accountfrom abroad has increased in many locations around theworld. In 2020, the average time was under one month in
65% of jurisdictions, with only 44% saying the samein 2023.

4

3

2

1
80% of
TMF group experts
are still positive there
will be an increase ininvestment in theirjurisdiction over the
next five years

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Average time to open a bank account from abroad

2020– Up to 1 week
– 2 to 3 weeks

1%– Around a month2021

7% 3% 9%

2022

2023

7% 8%

16%

8% 7%

1% 16%

28%

41%

41%

28%

9% 5% 1% 13%– 2 to 3 months– 4 to 6 months– Over 6 months
24%

53%

42%

NET: Under a month

65%

57%

45%

44%

NET: Over a month

35%

43%

55%

56%

30%

Next five years investment– There will be– There will be– There will bea slight 		increase ininvestment

a significant
increase ininvestment

Total
5% 1%

30%

– There will be

no changea slight decrease
in investment

North America

South America

APAC

7%

11% 11% 22%

15%

57%

36%

22%

33%

23%

– There will be asignificant decrease
in investment

EMEA
62%

13% 8%

13%

50%

60%

NET: Increase

80%

93%

56%

85%

80%

NET: Decrease

7%

0%

22%

0%

8%

20%

39



I N F L AT I O N A R Y P R E S S U R E S

M A N D ATO R Y B E N E F I T S

G LO B A L M O B I L I T Y

E M P LOY E E P R OT E C T I O N

WORKERS’ RIGHTSPAY R O L L D I G I TA L I S AT I O NS TA F F AT T R I T I O N40

PAY R O L L A N D
HUMAN RESOURCES

Increasing reporting
requirements, employee
protections and benefits
provision add tocomplexity forbusinesses

41

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Minor movements on progressive benefits
The top benefits legally required for all permanent
employees remain consistent around the world.
Minimum wage and paid vacation are mandated in over
90% of jurisdictions, while paid maternity leave and paid
sick days have stayed at a consistently high rate year
on year since 2020. As core benefits such as minimum
wage and paid time off are so universally accepted, they
don’t necessarily raise complexity in the same sense as
the other areas, however, they do require businesses tounderstand the differences in the policies and adapt toeach one.
Since 2020, severance/redundancy pay has seen asteady rise as a legal requirement, increasing from 84%
in 2020 to 88% in 2023. During recent challenges such as
Covid-19 and the global inflation crisis, jurisdictions have

Benefits legally required permanent employees

Minimum wage/minimum hourly rate

“An income agreement was signed
between the government, employer
confederations and trade unions, which
foresees the increase of compensation
for collective dismissal and individual
redundancy of permanent employees
from 12 to 14 days’ salary per year of
employment.”
TMF Portugal expert

 2020Overtime pay

91%
92%
94%
94%

Paid vacation/time off

been bringing in greater support for employees facing
redundancy. For instance, in Portugal, employees are
now eligible for greater redundancy compensation. This
increases security for workers but adds to employers’
financial commitment.

Paying a 13-month salary or bonus

Health insurance

34%
34%
32%
32%

Personal leave
57%
58%
58%
56%

Pension fund
84%
83%
86%
88%

45%
31%
29%
27%

Childcare assistance
58%
48%
57%
55%

Compassionate leave
84%
87%
83%
83%

48%
43%
43%
42%

64%
61%
62%
62%

87%
86%
86%
86%

Paid sick days

 2023

81%
78%
83%
82%

88%
94%
94%
92%

Severence/redundancy pay 2022

Shared maternity/paternity leave

Paid paternity leave

Paid maternity leave 2021

16%
30%
31%
29%

Housing/social care contributions
46%
51%
52%
51%

13%
25%
27%
28%





42

PAY R O L L A N D H U M A N R E S O U R C E S

Progressive benefits such as housing and social care
contributions are also becoming more common. In
2020, this was legally required in 13% of jurisdictions,increasing to 23% in 2023. It can be complex fororganisations having to meet these growing or morediverse demands.

Benefits legally required for permanent employeesChildcare contributions have also become anincreasingly common requirement, increasing from 16%
in 2020 to 29% this year. Newer and more progressive
benefits reflect an increasing focus on supportingand protecting employees. Cost and complexity for
employers, however, can be balanced by making thework environment more attractive and helping withtalent retention.

Paid vacation/time off

Minimum wage/minimum hourly rate
100%
100%
100%
88%

 South America
 North America APAC EMEA

100%
86%
100%
90%

Paid maternity leave
90%
79%
93%
85%

Severance/redundancy pay
100%
93%
86%
85%

“Social legislation is constantly evolving,with different joint committees by sector
applying different sets of rules, including
complex holiday pay, overtime, benefits
calculations and specific reporting
obligations.”

Paid sick days

TMF Belgium expert

Overtime pay

100%
71%
79%
85%

100%
86%
79%
78%

South America takes a more protective
stance for employees
Jurisdictions in South America are the most consistentfor mandating benefits for permanent employees.

“A good understanding, or good advice,must be obtained in order to comply withall employer requirements, before starting
business operations.”
TMF Guatemala expert

Certain benefits in South American jurisdictions are
baked into the working culture. For instance, 13th monthsalaries or bonuses are in place in 80% of jurisdictions.
While it may be more complex for foreign businesses toenter some jurisdictions due to such benefits, they areembedded into the business culture in those locations so
are generally stable and easier to plan.

Increased global focus and transparency
on reporting
In addition to an increase in benefits globally since 2020,
there has been a rise in reporting requirements that aim
to increase transparency and equality within businesses.
The biggest reporting requirement increase is in
employee demographics, growing from 28% in 2020
to 49% in 2023. Reporting requirements have also

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

increased for factors such as the gender pay gap or
people with disabilities. In 2020, this was mandated in 9%
of jurisdictions, rising to 23% in 2023. These increases
demonstrate a growing focus on diversity, equity andinclusion (DE&I), with governments increasingly trying
to ensure employers are accountable for creating aworkforce that is representative of society as a whole.
This focus on employee equality is positive for workers,
but it can be time consuming for businesses who are
faced with the extra reporting burden. However, it canoften be in the interest of business: more and moreorganisations are finding that requests for proposal(RFPs) ask for information on DE&I commitments,
so, although reporting can create some complexity, it
can also keep organisations ahead of the curve andcompetitive while striving for fairer societies.

Reports required by government authorities
 2020

Payroll data
79%
86%
83%
85%

 2021“Compared to many other jurisdictions
we are doing a very good job for equality
in the workplace. There are a lot of things
which are done for people with disabilities,
for women, for the environment andsocial responsibility. We are in a protective
environment, so ESG is obviously very
important.”
TMF France expert

Employee rights and support increasing
year on year
The increasing focus on workers’ rights is also reflected
when it comes to the end of employment. Since 2020,
governments have mandated greater protection whenemployees are facing redundancy or termination.

 2022
 2023

Individual pay
74%
82%
78%
79%

Employee bonuses
58%
75%
70%
71%

Details on foreign-national employees

Notice to fire underperforming employee(Net: Over a month)

2020

2021

39%

43%

2022

2023

47%

47%

54%
68%
73%
70%

Employee demographics
28%
41%
47%
49%

Personal circumstances (gender pay gap, disabilities, any other)
9%
8%
26%
23%

43





44

PAY R O L L A N D H U M A N R E S O U R C E S

Now, almost half (47%) of jurisdictions mandate thatorganisations must give underperforming employees
at least one month’s notice when terminating theiremployment, increasing from just 39% in 2020. There
are now also more factors when terminating an
underperforming employee. For instance, in 2020, forjust 38% of jurisdictions seniority was a factor in the
redundancy period of underperforming employees,
growing to 49% in 2023.
It's increasingly challenging to terminate an employee
without a reason. In 2020, 29% of jurisdictions allowed
the termination of employees without a reason,decreasing to 23% in 2023. This is particularly driven by
North America, where in 2020 it was possible in 64% ofNorth American jurisdictions to fire an employee without
reason, dropping to 36% in 2023.
This increased protection supports employees but
can be challenging for businesses, being both time
consuming and costly. However, it also serves toincrease worker satisfaction and therefore retention. Withbusinesses facing skills shortages worldwide, keeping
employees happy is more important than ever.

Factors influencing notice needed
Contract type (eg part-time, or temporary workers)
76%
73%
84%
85%

Length of service
59%
79%
79%
77%

Seniority
38%
35%
43%
49%

Industry that the company is operating within
27%
25%
33%
34%

Salary
14%
21%
29%
28%

Location (ie differences within jurisdiction)“South Africa’s labour laws emphasise
the protection of employee rights andadvancement of equitable representationin the workplace. This introduces
additional compliance requirements
through the Equity Employment Act andan increased risk of employee related
disputes.”TMF South Africa expert

0%
0%
8%
0%

 2020 2021
 2022
 2023For instance, in New Zealand it can be morechallenging to attract and retain international talent
due to immigration checks and procedures. This adds
complexity for employers as they need to submit
particular documents for migrant workers, but it enables
such workers to apply for permanent residency moreeasily, offering them greater protection and security. Thiscan make New Zealand attractive for foreign workers
overall.
Although employee support can create complexity,
improved benefits can help businesses to combat
resource shortages and talent retention challenges.
Adequately supporting and protecting employees cancreate a happier, healthier workforce, which can makeorganisations more efficient and successful.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Termination without citing a reason

Total

North America

29%

71%

2020

2022

2023

– Yes – employment can be terminated without citing a reason– No – employment cannot be terminated without citing a reason

2021

36%

64%

2022

23%

77%

2020

23%

77%

64%

36%

2021

25%

75%

20%

80%

36%

64%

2023

45





46

TEN LEAST COMPLEXJURISDICTIONS

2023

2022

69 

Malta			 (67)70 Jersey			 (72)71 

New Zealand		 (70)72 

United Kingdom		 (68)73 –British Virgin Islands		 (73)74 –Hong Kong			 (74)75 

The Netherlands		 (56)76 –Curaçao			 (76)77 Denmark			 (75)78 Cayman Islands		 (77)

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

 69

Malta

2022 (67)2021 (64)Malta is a new entry in the ten least complex jurisdictions for2023. It’s considered a simple jurisdiction due its businessfriendly environment and attractiveness for foreign investment.
A member of the EU, Malta follows EU AML regulations, as
practiced by all other member states. EU membership alsomeans that Malta has a lot to offer investment entities, SPVs
and trading companies. With a generous corporate tax rate
and refunding system, Malta is viewed as a highly attractive
destination for FDI.
However, for non-EU clients, DAC6 legislation can be an areaof compliance which businesses can struggle with, due to theirunfamiliarity with the regulation. Another aspect that createssome complexity in Malta is changing rules and regulations.
For example, there are stricter rules being introduced aroundcross-border information sharing, which could impact Malta’s
complexity in the future.
Recent geopolitical events have contributed to higher inflation
rates of 5-7%. Additionally, Malta is witnessing a shortageof skilled professionals within the jurisdiction, which has
driven salaries up. This has created an opportunity for foreign
workers to earn more, but these costs can be challenging forbusinesses entering Malta.

“As part of the EU, and assessing thecorporate tax rate and refund system,
Malta is viewed as one of the most
attractive jurisdictions of choice.”
TMF Malta expert

70 Jersey

472022 (72)2021 (45)

Jersey maintains its place in as one of the ten simplest
jurisdictions worldwide. This is driven by the small size of thejurisdiction – with a population of only 100,000 people – andthe commitment and communication from legislative andindustry bodies such as Jersey Finance, who take a supportiveand responsive stance to business operation and incorporation.
For instance, business incorporation can happen in as little as
two hours – a process which can take months elsewhere.
Within Jersey, funds and PWFO industries form a significant
portion of the economic environment. Investors have beenable to take advantage of the weak currency (GBP), driven by
the economic turmoil in the UK during 2022. Investors from
APAC and jurisdictions that use stronger currencies havebenefitted from the volatility. Although issues like inflation canhave significant global impact, they also present opportunities
for investors and businesses. Jersey is able to attract theseinvestors due to its stable business environment and strong
ecosystem of professionals.
Its status as a magnet for foreign investment has contributed
to Jersey being an early adopter of ESG principles andregulations. With the rise of younger investors, who have hopesof a more sustainable and equitable future, this is a trend that is
only set to continue within Jersey.

“Jersey continues to evolve and become ajurisdiction of true low complexity in whichto do business. With a proactive legislative,
regulatory and financial services industry
body, it is an easy jurisdiction throughwhich foreign capital can be safely andsecurely invested.”
TMF Jersey expert





48

 71

TEN LE AST COMPLEX JURISDICTIONSNew Zealand2022 (70)2021 (67)

While elections loom later this year, New Zealand isexperiencing a very stable period. The only key changes overthe past year have been those the government put in place tosupport the economy after Covid-19 and due to inflation. For
instance, the government continued to subsidise tax on fuelfor businesses and individuals. Some taxation changes are
expected to follow the elections, including the lowering of the
top tax bracket for individuals.
Despite the simplicity of the jurisdiction, the process of opening
a bank account can cause some issues for international
businesses incorporating and operating in New Zealand. KYC
legislation mandates the need for face-to-face interactions. Its
geographical location can be challenging for business leaders
who may need to take long flights for KYC procedures in orderto get their organisation’s finances up and running.
However, the New Zealand government has been making iteasier for international workers to gain permanent residency
in the jurisdiction and has offered greater protection for
employees entering the country. Although this can result in
upfront costs and complexity to complete necessary checks,
it means that the jurisdiction is becoming increasinglyinternationalised and open to foreign workers and more
attractive for FDI.

“It’s very simple to operate in New Zealand,
from start up to wind up. Things are all
online and government support isvery good.”
TMF New Zealand expert

72 United Kingdom

2022 (68)2021 (53)The UK has moved down the ranking this year its position in
the ten simplest places to do business. In the wake of Brexit,
there is a stable environment and favourable industry support
from advisors and industry groups, making the jurisdiction an
attractive place to do business. There are still regulations that
the UK needs to finalise in the post-Brexit world, one of which
relates to VAT.
Despite the simplicity, the UK’s stringent KYC checks add
to the length of time it takes to open a bank account whensetting up a business. The jurisdiction also introduced a newregister for overseas entities which was established at thestart of 2023, meaning anyone who owns real estate in the
UK from an overseas territory could face high penalties for
non-compliance. The war in Ukraine has been the catalyst ofthese changes as the UK tax authority has placed sanctions on
Russian businesses and investors.
The UK experienced great political turmoil in 2022, impacting
the economy alongside a high inflation rate. However, thepolitical environment has settled somewhat and over the next
12 months the UK is expected to remain a simple place to dobusiness. The authorities here are consistent at implementing
new funds and capital markets regulations and are also keeping
in line with ESG recommendations. This makes it attractive to
foreign investors.

“The UK remains a key international
financial market that services the world,with connections to all major markets
alongside a deep and broad knowledge
and talent pool. The advisor and financialbase of the UK is second to none forcompetitiveness and access.”
TMF UK expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

 73

British Virgin
Islands (BVI)

2022 (73)2021 (72)

The BVI is consistently one of the least complex to do business,with simplicity and global business needs deeply imbedded
into processes and principles within the jurisdiction. For
example, processes are highly automated and the jurisdiction
prioritises alignment with global standards, to enableinternational businesses to operate within familiar structuresand frameworks.
However, the BVI was added to the EU’s blacklist of noncooperative jurisdictions for tax purposes in February 2023
due to the late submission of necessary documentation.
The jurisdiction is in fact aligned with required international
standards and currently waiting for the EU to revoke thisblacklisting. Despite the challenges that may be expected withsuch categorisation, businesses operating within the BVI are
not overly concerned about this. They know that the jurisdiction
is transparent and aligned, so expect business to return tonormal in the coming months.
The transparency of the BVI and security this offers means thatit remains a particularly attractive jurisdiction for PWFO andfunds investors as they can protect assets that may be at risk
in more unstable jurisdictions. For instance, in South America,
climates can be unstable due to historic issues of corruption,
hyperinflation and political unrest.

“The BVI is a pivot in international FDI thatcreates independence from set countries
and their legislation and gives international
businesses and private individuals loads
of freedom to structure their activities
and wealth. There is a well organised,very smooth-running legal framework thataligns strictly with international standards
set by the OECD, among others.”
TMF BVI expert

74 Hong Kong

49

2022 (74)2021 (76)Hong Kong prioritises international alignment and a generalease of doing business, making it one of the simplest
jurisdictions in 2023. Accounting and tax processes are highly
simplified: salary tax, for example, operates on a tier systemand there are no VAT or social security measures in place.
Due to Hong Kong’s relationship with China, more advanced
KYC regulations have been introduced, aligning bothjurisdictions. Although this can cause initial complexity, it does
simplify entry into the Chinese market, which is highly desirable
for many international businesses.
Despite its simplicity, Hong Kong still relies on paper for certaintransactions and processes. While there are online platforms
available manual ways of working tend to be preferred, which
can slow down some aspects of business operation. However,digitalisation is expected to be embraced in future.
Another expected change is an increased focus on ESG. The
government in Hong Kong has recently started bringing the
topic into political discussions and there’s an expectation that
ESG legislation may be on the horizon. Increased legislation
around cryptocurrency is also expected which will impact
businesses in that industry.

“Hong Kong remains as a jurisdiction
with strengths which are favourable fordoing business. Its infrastructure enables
free flow of goods, capital, talent andinformation. Hong Kong is well known for
its simple tax regime with low tax rates.”
TMF Hong Kong expert

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 75

TEN LE AST COMPLEX JURISDICTIONSThe Netherlands

2022 (56)2021 (70)

The Netherlands has historically been a simple place todo business due to the flexibility ingrained in its businessculture, and it finds itself back in the bottom ten (most simple)
jurisdictions for 2023. Incorporation and making changes to an
existing structure or company is straightforward and lacking in
unnecessary formalities. For instance, companies do not needregulatory or government approvals to incorporate.
This business focus is set to continue in the Netherlands, withthe government discussing making more processes digital in
future, such as introducing an online portal for incorporation.
This would remove the need for a notary during theincorporation process, making it even quicker for organisations
to set up business.
Despite its simplicity, some businesses that previously
operated in the Netherlands have turned to other locations thatoffer more attractive tax incentives, such as the UK and Ireland.
For instance, both Shell and Unilever moved their headquarters
to the UK within the past three years.
While some organisations have looked elsewhere, it’s likely that
the Netherlands will remain a highly competitive jurisdiction for
FDI for years to come.

“When foreign businesses come to theNetherlands to start their operations,they come to a country that is very
internationally orientated. Even during
difficult and uncertain times with theglobal pandemic, high inflation and thewar in Ukraine, the Netherlands has
shown to be a stable and resilient country,
welcoming foreign investments.”
TMF Netherlands expert



76 Curaçao

2022 (76)2021 (73)Curaçao remains one of the simplest jurisdictions for business
operation and incorporation worldwide due to its stability,
despite the tumultuous geopolitical environment, and a focus
on driving simplicity year on year. For instance, Curaçao’s tax
authority has taken steps in the past year to speed up andsimplify processes, as well as clear backlogs from the Covid-19
pandemic. This has made investment into Curaçao more
attractive than it was in previous years and has brought newopportunities.
Opening a bank account is the most complex aspect ofincorporation, as banks tend to be risk averse, so need toensure that capital is legitimate. This is in line with the global
trend of an increased focus on transparency regulations
such as KYC. Investors and businesses alike anticipate suchchecks, so it doesn’t tend to present much of a surprise fororganisations and individuals entering Curaçao.
Due to its connections with the Netherlands and setup for
remote working, Curaçao has been attracting increasing
numbers of digital nomads in recent years. Youngentrepreneurs in particular are taking advantage of lower
property prices and other benefits that Curaçao offers. Coupledwith the flexibility that comes with remote working, Curaçao
is likely to continue to attract international workers foryears to come.

“Curaçao is a safe haven to invest into
South America. It’s not particularlycomplex provided you have the rightexpertise to help you set up. Only opening
a bank account can cause a bit of aburden.”TMF Curaçao expert

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

 77

Denmark2022 (75)2021 (77)

Up one place from third in 2022, Denmark is now the second
simplest place to do business. Its straightforward incorporation
process for businesses, coupled with political, social, andeconomic stability make it a very attractive jurisdiction.
Denmark not only continues to implement EU regulations but
is commonly the first EU country to embrace them, so new
requirements are integrated fairly quickly.
As we’ve seen globally, high inflation in Denmark has impacted
businesses operating here. Due to economic pressures, somebusinesses in Denmark have put activities such as expansion
on hold or left the jurisdiction altogether, though this is a trend
also seen in neighbouring jurisdictions such as Sweden and
Norway. Inflationary pressures are also impacting the labour
market, where some businesses are not able to find, or afford,
the right employees.
Denmark is keen to observe and promote ESG requirements.
In the coming year, a new regulation concerning genderequality for board directors is being introduced. Currently,
ESG requirements are focused on larger companies, however,smaller companies are also putting actions in place to makethem more compliant due to its importance in the country.

“Denmark is a very equal country withrelatively little difference between rich andpoor, and a large focus on gender mix andequal rights for women and men. I thinkcompanies and people in Denmark arevery conscious about ESG in general.”TMF Denmark expert

78 Cayman Islands

512022 (77)2021 (75)

The Cayman Islands remain the least complex jurisdiction in
the GBCI, boasting simple entity incorporation and accounting
and tax standards, which make setting up and operating abusiness here relatively easy. Regulators in the Cayman Islands
take a ‘light touch’ approach, and regulation itself is transparent
and clear. Compared to onshore jurisdictions where there is thecomplexity of taxes and more developed, professional bodies
and regulators, offshore jurisdictions can benefit from an easier
way of doing business.
Over recent years, there has been a fundamental shift towards
the adoption of global regulatory compliance requirements,
such as UBO, AML, FATCA and CRS. Businesses in the
Cayman Islands are now well aware of these requirements
and navigating these has become a familiar task for many
multinational outfits.
Despite its simplicity, there are some challenges for new clients
operating in the Cayman Islands who are not used offshore
jurisdictions. For example, businesses can be surprised by thelevel of detail required for KYC and AML purposes, thus making
the process of opening a bank account a more rigorous affair.
However, this level of regulation feeds into the stability of thejurisdiction and its standing as a global financial centre.

“Cayman is way ahead of the curve
compared to the rest of the world, whenit comes to regulatory and compliancelegislation.”
TMF Cayman Islands expert

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52

CONCLUSION

Geopolitical and economic turbulence can have asignificant impact on how businesses operate globally.
Since 2020, confidence in the future economic stabilityof jurisdictions has been waning, with events suchas the war in Ukraine and widespread global inflation
only exacerbating this dip in confidence. The current
environment is affecting businesses in multiple ways:
the disruption of supply chains, an increase in businesscosts and skill shortages, to name a few.
Businesses may be rethinking their global investment
and operational strategies as a result of the upheavalof the past twelve months. Local cost and inflationarypressures, along with the impact of other factors, suchas sanctions on Russia, mean there’s a lot more at playthan at the start of 2022, when business was generally
optimistic while emerging from Covid-19.
There is also an expectation that global compliancelegislation will continue to tighten as a result of
geopolitical tensions. Compliance regulation suchas KYC and UBO is more important than ever,demonstrating the need for greater transparency

and understanding of who exactly is investing into
jurisdictions. This is having an impact on businessexpansion, with half of jurisdictions (48%) predicting thatsome companies will rethink their goals due to increased
regulatory obligations.
Businesses not only have to be aware of more stringent
compliance regulations, but the likelihood that they
will have to comply with increasingly demanding ESG
rules. While driving profit is key, ESG is becoming an
increasingly influential part of the day-to-day for major
corporations. Although this focus on ESG may causesome complexity for businesses, it also leads the way formore sustainable and ethical ways of working.
It’s more important than ever for businesses to stay
on top of these increased reporting demands. Coupledwith a challenging economic climate, businesses needpartners and advisors that can help navigate rapidlychanging rules and regulations. Preparing for thechallenges ahead can help ensure success when doing
business across borders.

GLOBAL BUSINES S COMPLE XIT Y INDE X 2023

Looking ahead

M O R E S U S TA I N A B L E A N D
E T H I C A L WAY S O F W O R K I N G

INCRE ASED REPORTING DEMANDSR A P I D LY C H A N G I N G
R U L E S A N D R E G U L AT I O N S

TIGHTERL E G I S L AT I O N

53

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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 witha solid grounding in data and analysis, the GBCI 2023
is built on robust multi-method research. The index isgenerated from an in-depth survey of TMF Group’s
in-market experts in 78 jurisdictions, and the data isalso compared to the survey results used in last year’s
GBCI report.
The survey covers three areas of business operations:• Accounting and tax• Global entity management• Payroll and human resources

AC

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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, 2022 and2023. ‘Don’t know’ answers have been excluded from theanalysis and graphs.
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 2023

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.

ESG

Environmental, social and governance. A
framework aimed at understanding how anorganisation manages risks and opportunities
around sustainability issues.

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© May 2023, TMF Group B.V.


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