Mexico City, Mexico, 16 February 2016 – Mexico remains the world’s sixth-most complex country for multinational companies to stay compliant with corporate regulation and legislation, according to TMF Group’s Global Benchmark Complexity Index 2015, despite government efforts to overhaul major sectors of the economy and boost private investment.
The far-reaching annual study by 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. View full report.
Mexico’s economy is currently undergoing a series of reforms championed by President Enrique Peña Nieto, leading to changes in the petroleum, telecoms and financial sectors, among others. Boosting these sectors is critical in order to support the Mexican economy, which has seen a sharp drop in exports. While some progress has been made in streamlining compliance procedures, work still needs to be done.
Fernando Garrido, Managing Director for Mexico at TMF Group, explains: “Mexico has made various political and economic transformations to better align with other developed countries, but there are still limitations in business processes, which result in red tape and unnecessary time. However, the country is working towards implementing efficient methods and technology to reduce business complexity.”
The recent slate of reforms is aimed at opening up Mexico’s traditionally state-dominated industries to private investment from both home and abroad. But navigating the Mexican regulatory system can be a daunting task for multinational corporations operating in Latin America’s second-largest economy.
In addition, concerns over fair competition may keep some investors at bay. Mexican policymakers are currently debating new anti-corruption legislation in Congress, though negotiations have stalled.
“Successful multinational corporations have zero tolerance for unfair business practice, making the passage of anti-corruption laws critical in order to create a level playing field for every company operating in Mexico,” added Mr. Garrido.
Latin America as a whole remains the most complex region for multinationals to do business in regards to regulation and compliance. While Argentina tops the table, Colombia (3rd), Bolivia (7th) and Brazil (10th) are the other countries from the region in the top 10.
Latin American neighbors who 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).
According to experts at TMF Group, 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, largely due to its common law framework, stable political environment, strong regulatory framework and pro-business attitude.
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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.