Sao Paulo, Brazil, 16 February 2016 – Brazil remains among the ten most-complex nations in the world for multinational companies to stay compliant with corporate regulation and legislation, although signs of improvement are showing, according to TMF Group’s Global Benchmark Complexity Index 2015.
The far-reaching annual study by TMF Group, a leading global provider of high value business services to clients operating and investing internationally, 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. View full report.
Alessandra Almeida, Chief Operations Officer for Americas and Integration leader for Brazil at TMF Group, explains: “Brazil has long been a complex place to do business given its labyrinth regulatory structure and onerous tax code. While political gridlock has stalled potential legislation aimed at simplifying corporate compliance, agencies have made strides towards greater integration with their international counterparts. Regulatory changes are being implemented; however, this does impact the process of creating, operating or winding down a company.”
According to TMF experts, corporate bureaucracy in Brazil has shown some signs of improvement. For instance, opening a foreign-funded business in Sao Paulo state, where most of the nation’s corporations are based, has become easier through the elimination of several arduous bureaucratic steps. The time required to obtain a working visa for foreigners has also been cut in half through electronic filing. For some local companies, new measures were implemented to unify requests for various operational permits into one single system, reducing the overall turnaround from 90 to 30 days.
Other advances include the recent prosecution of several high-profile executives and politicians for corruption, as well as the introduction of an anti-corruption law in 2015.
Further improvements to reduce bureaucratic hurdles are still needed. A heavy investment in manpower and time is often required to ensure compliance with local regulations, making Latin America’s largest economy a difficult and expensive place to do business.
Latin America as a whole remains the most complex region for multinationals to do business in from a regulatory and compliance perspective. While Argentina tops the table, Colombia (3rd), Mexico (6th) and Bolivia (7th) are the other countries from the region in the top 10.
Neighboring countries that have fared better in the rankings include Uruguay (55th), Ecuador (40th), Chile (37th) and Paraguay (29th). The next most complex region to do business in is Asia, with three countries in the top 10, including Indonesia (2nd), China (5th) and Thailand (9th).
Many of most complex jurisdictions share certain characteristics not linked to a specific region. With the exception of China and the UAE (4th in the rankings) all jurisdictions in the top ten have a civil rather than common law-based legal system. In general terms, the development of these systems have been plagued by limited investment and the lack of necessary legal infrastructure to support a robust corporate governance environment.
At the other end of the index, Ireland (95th) was ranked as the least complex place to do business jurisdictions in regards to regulation and compliance, largely due to its common law framework, stable political environment, strong regulatory framework and pro-business attitude.
For further information, please contact:
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About TMF Group:
TMF Group is a leading global provider of high value business services to clients operating and investing globally. It focuses on providing highly specialised and business-critical financial, legal and human resource administrative services that enable clients to operate their corporate structures, finance vehicles and investment funds in different geographical locations. TMF Group has operations in more than 80 countries across the Americas, Asia Pacific, Europe and the Middle East.