Jersey has been ranked as the least complex country for multinational enterprises to do business in for the second year running, according to TMF Group’s 2014 Global Benchmark Complexity Index.
The far-reaching annual study has ranked 81 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.
According to the findings, which rank from the most to the least complex jurisdictions, Jersey (81), Ireland (79), Guernsey (75) and the UK (74) are ranked amongst the least complex places to do business, alongside Hong Kong (80), Australia (76) and New Zealand (72).
South America was found to be the most complex region to operate in, making up half of the index's top 20 and accounting for the top three places, with Argentina found most complex, and Brazil and Bolivia taking second and third places respectively.
The research identified local legal systems as a key driver in the complexity of regulatory environments. Those countries that operated a civil law framework, including many South American countries, were typically ranked higher than those where common law is employed.
Other drivers include economic and political turbulence, significant changes in the global business environment and the increase in compliance requirements, including FATCA, anti-bribery and corruption, the OECD Base Erosion and Profit Shifting (BEPS) Project and changes in international company law.
Commenting on the findings, Thorold Youngman-Sullivan, Global Head of Corporate Secretarial Services at TMF Group, said: “The burden of managing various international entities continues to be a major headache for multinational companies and their boards of directors. Growing internal and external stakeholder pressure, changing regulation and the continued expansion by multinationals into new territories have all added to the compliance responsibilities shouldered by their in-house teams. As part of this, certain jurisdictions have changed significantly their complexity ranking from the previous year as new rules come into force, meaning that there are an increasing number of potential pitfalls waiting for those firms expanding into new territories without sufficient knowledge of the local landscapes.”