South America is the most difficult region for companies to operate in from a regulatory and compliance perspective, with Argentina the country with the most complex local regime according to the inaugural Global Benchmark Complexity Index from TMF Group.
The study, which surveyed local compliance experts from across TMF Group’s global network, ranked 81 countries according to how difficult it was for a business’ corporate secretarial team to comply with all relevant local regulations.
Countries from the Americas were deemed the most difficult with Argentina (1st), Bolivia (2nd) and Peru (3rd) occupying the top three spots globally followed by the UAE (4th) and emerging Asian economies Indonesia (5th), Thailand (6th) and China (8th). Poland (7th) was the only European county to feature in the top ten with the United Kingdom (74th) ranked as one of the easiest jurisdictions for corporate compliance.
New Zealand (81st) was ranked as the easiest place for corporate secretarial compliance followed by Ireland (80th) and the British Virgin Isles (79th).
The research identified local legal systems as a key driver in the complexity of the regulatory environment. Those countries that operate a civil law framework, including many of the South American countries, were typically ranked higher and viewed as more complex than countries such as the United Kingdom and Hong Kong where common law is employed and the concept of corporate secretarial practice is better-established.
These findings build upon TMF Group’s recent report Avoiding the pitfalls of international expansion which surveyed a number of senior level decision makers at global organisations and found 86% of respondents were growing their footprint in order to expand sales operations. Crucially over a third (36%) identified complying with local rules, regulations and processes as the biggest challenge when entering a new market.
Commenting on the findings, Thorold Youngman-Sullivan, Global Head of Corporate Secretarial Services said: “It is clear that in an increasingly global marketplace, managing corporate compliance across a number of subsidiaries across the world is a time consuming and difficult task. Understanding how the regulatory landscape varies and the potential pressure points for local teams is crucial for Group Corporate Secretariats, who juggle a myriad of responsibilities and have to navigate the idiosyncrasies of numerous foreign jurisdictions.
“Emerging markets present the biggest challenge for businesses, offering significant growth opportunities but often at the price of a more complex local regulatory landscape. Organisations with a presence in these geographies need to ensure that adequate resource and expertise is available to reduce the potential for non-compliance.”
You can read the report here.