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Published
24 June 2024
Read time
12 minutes

The 10 most complex jurisdictions for doing business in 2024

TMF Group’s Global Business Complexity Index 2024 explores a range of indicators relating to business complexity, providing an in-depth analysis of the global and local challenges that organisations face when doing business in different jurisdictions around the world.

The GBCI 2024 report ranks jurisdictions according to the complexity of their business environment, with the top 10 being the most complex and the bottom 10 being the least complex.

In this article, we take a look at the 10 jurisdictions that rank at the top of this year’s index and explore the factors that contribute to their position.

While these markets have significant complexities, opportunities are available to those who can navigate them successfully.

Our aim is to provide a clear understanding of the challenges that organisations are likely to face in these jurisdictions, allowing businesses to mitigate the potential risks of investment through strategic thinking and informed operations.

With these insights from our GBCI 2024, we hope to help you enter even the most complex markets with confidence.

Find out more about the GBCI here or download the 2024 report in full here.

10 most complex jurisdictions

1. Greece

Greece ranks as this year’s most complex jurisdiction, climbing from 6th in 2022 and 2nd in 2023. While Greece has consistently been considered complex, particularly within accounting and taxation (A&T), its HR and payroll (HRP) functions have increased in complexity in 2024.

The complexity of today's business environment is driven by several key factors. In the first instance, there is the need to comply with numerous aspects of legislation. TMF Group experts in Greece identified up to 31 decisions and one new legislation per week that companies have to abide by.

And rather than simplifying processes, digitalisation has instead added an additional layer of complexity. One example is MyData, an accounting software necessitating digital submissions, that requires multiple new deadlines across platforms. Limited knowledge of these complexities can often compel foreign investors to seek third-party advisors for A&T and HRP, only increasing costs. Challenges are expected to persist in the short-term as businesses adapt to new requirements, but the long-term outlook anticipates that digitalisation will simplify operations over time.

I believe that 2024 is going to be the worst in terms of complexity and compliance. This is because the majority of the local small and medium-sized accounting firms never thought that data would progress, nor that authorities would introduce such mandatory changes. So now they are facing huge backlog.

TMF Greece expert
2. France

France ranks second in this year’s GBCI, dropping from first place in 2023. The nation’s unique accounting measures and French language requirements surprise many foreign finance directors, adding to its complexity as a place to do business. The country has seen a rise in new regulations in 2024, including UBO identification and tax changes, which has also increased compliance costs. In addition, stringent labour regulations designed to protect employees make workforce adjustments challenging, increasing hiring and retention costs.

Despite these complexities, France has a stable trading environment, largely driven by European regulations. As an EU member and OECD headquarters, France attracts talent from all over Europe. However, compliance with the European Union Non-Financial Reporting Directive (NFRD) and rising ESG regulations introduces additional reporting challenges − from disability and gender gaps to waste and other environmental concerns. While some of these challenges are offset by strides in digitalisation of reporting, implementation is slow and requires upfront adaptation.

France is often viewed as an attractive market to operate in, in the European Union, with a high number of senior executives of foreign companies operating here. However, it can also be challenging for foreign businesses. Factors that contribute to this complexity include the focus on maintaining traditional ways of working, such as the use of the French language, particularly with administrations. The regulatory environment is very heavy and labour laws are particularly complex, with high protection for employees. Despite these challenges, the French government is making progress in developing more simplified processes in certain areas.

TMF France expert
3. Colombia

Colombia’s high ranking is driven by its complex accounting and tax systems. As a jurisdiction, its business environment is characterised by frequent tax reforms, with as many as 19 reforms introduced in the past seven years.

Whilst Colombia boasts over 100 international treaties to boost trade and investment, it faces political and social instability which has in turn discouraged investors. It is expected that this trend will reverse in the next three to six months, presenting more opportunities for investment in the jurisdiction. For example, following recent regional elections, there has been a shift towards the political centre right, encouraging more investors to consider Colombia as a viable investment destination.

Colombia has been ahead of the curve in implementing ESG reporting processes, as businesses have been adapting to this standard for around five to six years. As such, while additional reporting adds an element of complexity, it is not expected to significantly impact the overall business environment. Instead, it places Colombia in a good position, as ESG principles become increasingly more common worldwide.

Colombia is a very complex country in which to do business. The complexity includes not only regulatory issues but also the cultural aspects of its regions. It is essential that investors always have a local ally who knows how to guide them through the subtleties that each complexity may present.

TMF Colombia expert
4. Mexico

Mexico ranks 4th in the 2024 GBCI, with complex rules and regulations making a major contribution to its overall complexity. The time it takes to set up a bank account and varying requirements for obtaining a working visa are examples of this complexity. Despite these, Mexico has made strides in digitalisation, with systems like e-invoicing and electronic signatures simplifying bookkeeping. Efforts to improve AML requirements are underway to boost investor confidence, though this also means increased audits for companies.

Mexico benefits from nearshoring with the US due to its geographical location, infrastructure, land availability and lower costs, contributing to 4% of its growth. Participation in the T-MEC treaty with the US and Canada has enabled this and has created one of the world’s largest free trade zones. Efforts to improve automation, particularly within HR & Payroll (HRP), are ongoing, with OECD alignment providing confidence and security for investors, despite additional complexities.

Mexico is the door to all of Latam and at the same time, the window to the US. So, I think that, even though we have experienced challenges − changes in our processes and government − we're still ready.

TMF Mexico expert
5. Bolivia

Bolivia remains a complex jurisdiction, ranking 5th in overall rankings and up from 9th in 2023.

Its complexity is driven by an old-fashioned taxation system, requiring physical presence and knowledge of the local language. Both to set up a business and report on an ongoing basis, in-person submissions are often required. Not only does this slow a process down, but it requires a regular physical presence in the region. This is further complicated by the fact that there are high sanctions should your company not abide by taxation and payroll requirements.

Currently, its main opportunity for growth comes from agricultural exports, trading with other South American countries. However, the political situation in South America poses a threat to this set-up. With changing governments across the region, the jurisdiction is unsure of how long positive relations will maintain.

It can be difficult to operate in Bolivia because of the taxation system. You have to make tax submissions using physical or paper submissions. In addition, you have to maintain these physical papers for 8 years, in the case of auditing. This can make it hard for international business.

TMF Bolivia expert
6. Turkey

Ranking 6th in the GBCI, Turkey maintains its position as a highly complex jurisdiction. The frequent changes to tax laws, including procedural tax, VAT and income tax, primarily drive this complexity. For example, the recent introduction of a recycling contribution fee as a new customs tax on imports has further complicated tax reporting.

Hyperinflation has led to new capital requirements for specific sectors, increasing the risk of non-compliance and complexity. Despite the government implementing VAT exemptions to reduce complexity for the production sector, the resulting bureaucratic process and additional paperwork often deter companies from taking advantage of these incentives.

The requirement for Turkish language proficiency in this bureaucratic environment presents another layer of complexity. All documents must be in Turkish, posing a challenge for companies without Turkish-speaking employees. Therefore, the combination of staying abreast of changing laws and ensuring linguistic adequacy in document submission contributes to a challenging business environment.

Unfortunately, the Turkish government does not have a specific economic plan to address hyperinflation, nor the devaluation of Turkish lira. This economic instability affects all the people and for sure, clients.

TMF Turkey expert
7. Brazil

In this year's GBCI, Brazil's ranking fell from 3rd to 7th. This change is attributed more to other jurisdictions becoming more complex than any internal changes in Brazil. The prime complexity drivers in Brazil are tax legislation and varied legislation at different administrative levels.

Brazil's tax legislation, characterised by local variations, makes operations planning complex. Choosing an optimal tax regime will depend on the industry and the part of Brazil you want to operate in. Additionally, labour regimes and union strength also majorly differ across the country, with the South having more available talent. This necessitates strong local knowledge of the country.

There are some internal concerns over proposed tax reforms, which is a key topic on the government's agenda. The proposed reform is not expected to be radical, but it has raised concerns among companies about a potential increase in taxes. Specifically for services and IT, discussions around an incentive designed to reduce labour taxes and encourage hiring are being reconsidered.

Despite these complexities and uncertainties, Brazil seeks to expand its global trade reach, particularly within agro-exports. Efforts are ongoing to join the OECD, boost international trading relations and promote regional integration through Mercosur.

When inflation started to skyrocket, Brazil's Central Bank put measures in place to control inflation and was one step ahead of the trend. So, with both the cost of capital and inflation rates coming down, there's probably more predictability.

TMF Brazil expert
8. Italy

Italy, ranking 8th in complexity, has shown significant improvement in its HRP services, while A&T and GEM remain complex. Italy's tax complexity is due to numerous decrees, laws and resolutions issued on an annual basis. Despite efforts to reduce tax complexity, such as replacing the Dividend Exemption with a preferential tax rate for foreign shareholders, frequent changes remain.

Digitalisation efforts, like e-invoicing, have made bookkeeping simpler, though each new entry adds to the tax treatment complexity. Companies often rely on specialists to interpret and understand the impact of these changes.

Incorporating a company in Italy is not overly complicated, but complying with numerous monthly obligations across accounting, tax, invoicing and HR is challenging. The online UBO registry has introduced another layer of compliance, particularly due to its slight difference in requirements from other countries.

Geopolitically, Italy's status as a production hub makes it vulnerable to supply chain disruptions, such as sourcing grain from Ukraine and the blockage of the Red Sea oil route, causing delays and forcing the exploration of potentially less competitive alternatives.

Despite the regulatory challenges, Italy remains a reliable place to do business. However, businesses often require the services of lawyers, tax specialists and labour consultants to navigate the business environment.

TMF Italy expert
9. Peru

Ranking 9th overall, Peru is least complex within its HRP service line, but ranks as highly complex across A&T and GEM.

Peru offers good natural resources, but due to complicated licensing processes for international companies, it can be a challenging place in which to set up a business. This is amplified by the political situation, which has been uncertain since 2016. There have been considerable public grievances, driven by distrust of political leaders, economic inequality and extreme polarisation, for multiple years. This both makes it an unstable place to invest in and offers a limited talent pool for companies due to limited investment in education. Whilst there are hubs of skilled workforce, this is not consistent across the country.

The complexity of regulation, particularly around labour laws, also poses difficulties for international investors. The labour market is highly regulated and tilts the balance towards the worker, with limitations on dismissal for payment of compensation. This can slow down hiring. With regards to tax, there are regular changes to laws around submissions which can be difficult to follow. However, this varies across industries. There are sectors such as pharmaceuticals that are complex due to the difficulty of obtaining records for products, but mining is more attractive. This is predicted to be an area of economic growth.

Mining will be the engine of economic growth in Peru. Whilst there are complexities to our labour laws and changing taxation regulation, this is no different to other countries. Investors are just not confident in the stability of the country due to a polarisation of the political landscape.

TMF Peru expert
10. Kazakhstan

Kazakhstan's complexity is mostly driven by its complex HRP processes. Increased scrutiny on currency control and international taxation pose additional challenges, especially when applying for working visas and permits.

Despite these complexities, Kazakhstan's government is keen to attract investments and continuously reviews legislation. Notably, a shift in tax regulation was marked by replacing the Dividend Exemption with a preferential tax rate for foreign shareholders. However, global corporations often struggle to keep internal reporting up to date with the frequently changing legislation.

In line with global digitalisation trends, Kazakhstan is transforming its processes for transparency and accountability, with a focus on data privacy and security.

Unsurprisingly, Kazakhstan has also been largely impacted by the conflict in Ukraine. Regulatory measures have been implemented to manage parallel imports and reduce disruptions, but these have not completely reduced the risk. Nonetheless, the economy has witnessed a positive trend with Russian businesses relocating to Kazakhstan. Efforts are also being made to attract talent from other regions, particularly within expertise-specific industries like the nuclear sector.

The intent of our government is to behave in a diplomatic way within the market, with both our near and far neighbours and partisan country partners. So, it's balancing that intent while still attracting investments to help the economy grow.

TMF Kazakhstan expert

The Global Business Complexity Index 2024

This article is an extract from TMF Group’s latest report: The Global Business Complexity Index 2024.

Explore the GBCI rankings, complexity indicators and global trends to help you cut through the layers of compliance complexity in over 70 jurisdictions – download the report in full here.

To find out more about the drivers of business complexity in the jurisdictions that matter to you, explore our Complexity Insights Dashboard where you can analyse up to three markets at one time.

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