Press Release

Macri inherits more challenges: Argentina world’s most complex country for businesses to stay compliant

18 February 2016

Annual index by TMF Group ranks 95 countries according to regulatory and compliance regimes

  • For the third year running, Argentina is ranked the most complex country for multinational companies to stay compliant with corporate regulation and legislation, ahead of Indonesia, Colombia, Bolivia and China
  • Argentina heads four other Latin American countries in the top 10, making the region the most complex to do business in from a regulatory and compliance perspective, followed by Asia

Recently-elected President Mauricio Macri faces the challenge of addressing past regime’s decisions while implementing reforms and boosting growthBuenos Aires, Argentina, 16 February 2016 – Argentina is ranked as the most complex for multinational companies to stay compliant with corporate regulation and legislation, for the third year running, 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, 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.

Commenting on Argentina’s ranking, Roberto Scrimieri, Managing Director at TMF Argentina, said: “With the recent inauguration of President Mauricio Macri, there is a renewed sense of optimism and hope that this marks a change for Argentina, and its attractiveness to foreign direct investment.”

Entrepreneurs looking to invest in Argentina face significant delays due to a range of administrative, bureaucratic and legal hurdles that worsened over the administration of former President Cristina Kirchner. The delays are particularly prevalent when registering and incorporating companies, or when seeking modifications to bylaws, with TMF stating that it could take over 100 days to start a business in Argentina if the process is not managed properly.

“Only time will tell if President Macri addresses the serious reforms needed to improve the ease with which businesses can set up and flourish in the country, and establish Argentina as a sustainable, go-to destination for multinationals,” added Mr. Scrimieri.

According to the index, Latin America remains the most complex region for multinationals to do business in from a regulatory and compliance perspective. Whilst Argentina tops the table, Colombia has climbed 18 places to 3rd, behind Indonesia. Brazil, the second most complex country in 2014 has fallen eight places to 10th in the 2015 rankings. Mexico (6th) and Bolivia (7th) are the other countries from the region in the top 10.

Argentina and its neighbours are facing a challenging time in global financial markets. Further economic woes face Argentina unless President Macri can bolster growth and reign in the country’s fiscal deficit.

Argentina has many strong characteristics which make it an attractive investment destination. It is the third largest economy in Latin America, has abundant natural resources, a well-educated population and a strong agricultural sector. However, high levels of bureaucracy and a challenging legal and regulatory environment means the complexity of doing business increases, particularly for companies without critical local knowledge and expertise,” commented Mr. Scrimieri.

Latin American neighbours 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 in regards to regulation and compliance 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 to its common law framework, stable political environment, strong regulatory framework and pro-business attitude.

Results summary:

  • Argentina (1st), Indonesia (2nd) and Colombia (3rd) are ranked as the most complex
  • Ireland (95th), British Virgin Islands (94th) and Latvia (93rd) are the least complex
  • Three European countries fall into the top 20 most complex destinations for doing business in, namely Hungary (13th), Poland (17th) and Switzerland (19th)
  • Also in the top 10 were the United Arab Emirates (4th) Mexico (6th), Bolivia (7th), Lebanon (8th) and Brazil (10th)

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