China ranked the world’s fifth most complex country for business compliance

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

  • Asia is the second most complex region to do business, from a regulatory and compliance perspective, with three countries in the top 10, namely Indonesia, China and Thailand 
  • Argentina tops the table in global rankings as the most complex country for business compliance, for the third year running
  • Ireland has been ranked as the least complex place for multinational companies to stay compliant with corporate regulation and legislation

Ireland has been ranked as the least complex place for multinational companies to stay compliant with corporate regulation and legislation16 February 2016China has been ranked the fifth most complex country for multinationals to stay compliant with corporate regulation and legislation, and the second most complex in Asia, 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.

According to the Index, China has risen seven places to fifth position, and ranks behind its Asian neighbour, Indonesia, which is the second most complex country to do business with regard to regulation and compliance. Together with Thailand in ninth place, Asia is the second most complex region in the world behind Latin America, which has five countries in the top 10, including Argentina, which has topped the rankings as the most complex for the third year running.

Wandy Chan, Head of East China at TMF Group, said: Despite being ‘open for business’ China continues to be a challenging jurisdiction for a multinational company to establish itself. Steps to address this are being taken. Last year, China simplified the procedure for company registrations, expatriate work visas and annual compliance to encourage investment and commercial businesses. As these rule changes take effect, we expect to see an improvement in the number of foreign investors looking to set up operations in the country.”

China’s ranking as one of the most challenging jurisdictions highlights the country’s complex structure with numerous provinces, each with separate regulatory regimes and a range of dialects.

Over the last year, Chinese authorities have simplified the rules requiring companies looking to operate in the country to obtain licences, with the need to obtain a Business Licence, Organisation Code Certificate and Tax registration Certificate being rolled into a single licence. These new rules mean the process up setting up a company is much faster, and easier.

In addition, more expatriates are now applying for a five-year residence permit, rather than the previous 1-2 years, or a Green Card. Foreigners from certain nationalities can also apply for a ‘Z visa’ (Z landing visa) upon approval at Pudong Airport, as opposed to in their home country. In addition, resident permits have been cancelled for Hong Kong and Taiwan expatriates.

At the other end of the spectrum, Ireland (95th) has been ranked as the least complex place to do business from a regulatory and compliance perspective, largely due to its common law framework, stable political environment, strong legal framework and pro-business attitude. A landmark Companies Act introduced during 2015 has been credited with simplifying Ireland’s corporate environment even further.

Ireland was followed at the bottom of the complexity rankings by the British Virgin Islands (94th), new entrants Latvia (93rd) and Trinidad & Tobago (92nd) and regular high performer New Zealand (91st).

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)
  • Uruguay (55th), Ecuador (40th) and Chile (37th) amongst the least complex in the region
  • Asia is ranked as the second most complex region behind Latin America with three countries in the top 10 - Indonesia, China (5th) and Thailand (9th)

For further information, please contact:

Justin Griffiths, Mazar Masud or Harriet O’Reilly
Powerscourt
Tel: +44 (0) 20 7250 1446
tmf@powerscourt-group.com

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.

www.tmf-group.com

 
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