The challenge of doing business in a complex world
From a business perspective, the world might be getting smaller but it is not getting simpler.
Managing corporate compliance for numerous subsidiaries around the world is a time-consuming and difficult task, and in-house Secretariat and Legal teams are increasingly having to ‘do more with less’, from monitoring deadlines, interpreting legislation and preparing foreign documents. But which jurisdiction in the world is the most – or least – complicated?
Now in its third year, TMF Group provides insight and commentary on 95 jurisdictions and ranks them in order of business compliance complexity in the Global Benchmark Complexity Index.
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TMF Group, a leading global provider of high value business services to clients operating and investing internationally, has ranked 95 jurisdictions across Europe, the Middle East, Africa, Asia-Pacific and the Americas according to how complex they are to do business in from a regulatory and compliance perspective.
There are two broad factors driving the increased level of compliance activities. The first is that governments are creating additional layers of compliance as they continue to demand that organisations provide them with more information about their corporate structures and activities. The second factor is the increasing interconnectivity of the departments within governments, as they improve their internal effectiveness by actively sharing information.
In terms of trending compliance topics over the course of 2015, whistleblowing tops the list; as programs are increasingly being implemented by multinationals as they seek to raise their global corporate governance standards. Bribery and FCPA compliance have also risen in priority, replacing cyber security, as companies focus on managing business and reputational risk.
Matthew Eckford, Director – International Entity Management at TMF Group and author of the report, explained: “Multinationals have to deal with an ever increasing regulatory and compliance burden, as they manage their presence in multiple territories or expand into new regions. Boards of directors face mounting pressure from many governments; this can cause major headaches for in-house teams who do not have sufficient knowledge of local regimes and their potential pitfalls.
“We are seeing far greater international collaboration between governments as they look to share information to combat issues such as money laundering and close tax loopholes, therefore maintaining accurate and consistent information across a business’ international operations is a major priority for leadership teams.”