Regulatory changes affect Singapore’s business compliance ranking

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

  • Singapore’s ranking worsens but it remains amongst the least complex countries in Asia
  • Asia is the second most complex region to do business in from a regulatory and compliance perspective, with three countries in the top 10, behind Latin America with five countries
  • Argentina tops the table in global rankings as the most complex country for business compliance for the third year running

Singapore, 16 February 2016 Singapore remains among the least complex countries in Asia for business compliance, despite a decline in its ranking compared to 2014, according to TMF Group’s Global Benchmark Complexity Index 2015. Though recent regulatory amendments have pushed the country up the complexity ranking by 17 places to 42nd position, in the long-term these changes are expected to attract more businesses to the jurisdiction as the legal and regulatory environment becomes more favourable for foreign investment.

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 (from 1 to 95 with 1 being the most complex) 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.

The recent implementation of the Companies Act Amendments, enforced by the Accounting and Corporate Regulatory Authority (ACRA), places Singapore at the forefront of regulatory governance reform. These legislative changes are aimed at reducing the regulatory burden on companies, promoting greater business flexibility and ensuring accountability and transparency. The maximum age restriction for directors has been removed; senior management no longer have to publicly disclose their residential addresses; and, the accounting and corporate regulatory authority will be responsible for maintaining the legal register of members of every private company.

Jean-Paul Binot, TMF Singapore MD, said: Singapore has long offered an attractive commercial environment for foreign businesses seeking to invest in the Asian region and we advise any businesses looking at this year’s index not to take it at face value. While in the short-term, the recent adoption of the Companies Act Amendments has created more complexity and uncertainty, these business-friendly changes will significantly reduce regulatory and administrative hurdles in the longer-term, further cementing Singapore’s position as an attractive location for foreign companies to enter into.”

All annual corporate secretarial submissions to the ACRA are submitted through an electronic portal. This centralised approach to administration, while highly efficient, can add a degree of complexity and is discouraging to foreign entities, as the ability to access and submit documents remains restricted to Singapore residents. This ensures that the authorities are able to adequately trace those people who create legal entities, providing additional safeguards for the Singaporean economy and those who operate in it.

The creation of the Asean Economic Community (AEC) on 31 December 2015 is a major milestone for the Southeast Asian region which could bring significant trade and economic benefits to member countries. The ten member states are: Singapore, Malaysia, Indonesia, Thailand, Vietnam, Philippines, Cambodia, Brunei, Myanmar and Laos.

“Singapore plays a pivotal role in the newly formed economic community, the AEC. Due to its strong connections with countries across the globe, it is the natural gateway for corporates doing business with other Southeast Asian countries. As such, the simplification of business regulations in the country will have a very positive impact for companies looking to invest in the region,” added Mr. Binot.

According to findings, Asia’s representation amongst the most complex jurisdictions with regard to regulation and compliance has increased since 2014, with three Asian countries in the top 10. Indonesia has risen seven places to rank as the second most complex country for business compliance, retaining its place in the top 10 most challenging countries for three years running. Two other Asian countries feature in the top 10, namely China and Thailand in fifth and ninth places respectively. Other countries from the region in the top 20 are Japan (12th), South Korea (14th) and Malaysia (15th).

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