Today, TMF Group, a global professional services company, launched its eighth annual Global Business Complexity Index (GBCI).
The full report examines rules, regulations, tax rates, penalties, and compliance issues in 77 jurisdictions, representing 92% of global GDP and 95% of net FDI inflows globally. Each year, 292 indicators are tracked, providing data on key aspects of business activity, including when to join, payroll and benefits, and maintaining compliance.
The report indicates that the UK has risen to 58I In 77 jurisdictions, which means it’s easier to do business. The conclusion of Brexit, along with new international trade agreements, brings greater clarity and stability. Familiarity with digital tax processes has increased and the legislative environment has stabilized; Legislative changes that lead to stricter economic core requirements are unlikely to pass in the next five years.
Brazil overtakes Indonesia as the most complex place to do business in 2021 The United States and the United Kingdom are among the simplest
Brazil is the most complex jurisdiction this year, with six Latin American countries in the top ten, followed by Mexico, Colombia, Argentina, Bolivia and Costa Rica. Brazil’s classification is due to bureaucracy: companies register in three different levels of authority (federal, state, and municipal) when they join. Also, tax rates vary from city to city and state to state.
France and Poland lead the European ranking in second placeDakota del Sur and 10I The most complex. Indonesia, number six, is the only jurisdiction for the Asia Pacific region in the top ten.
Denmark and Hong Kong are the simplest jurisdictions, followed by the Cayman Islands, Ireland, and Curaçao. Denmark’s success depends on a simple setup process, acceptance of documentation in English and digitization.
The UK rate rose to 58IWhich means it’s easier to do business. The conclusion of Brexit, along with new international trade agreements, brings greater clarity and stability. Familiarity with digital tax processes has increased and the legislative environment has stabilized; Legislative changes that lead to stricter economic core requirements are unlikely to pass in the next five years.
The United States remains an attractive destination, ranking seventhI less complicated. Factors that enhance the ease of doing business include a three-week delay in setting up a company through a single agency, the ability to pay taxes from a foreign bank account, and the fact that company directors do not have to pay taxes. Resident in the United States.
Mark Weil, CEO of TMF Group, said: “Our 2021 report is written against the backdrop of the Covid-19 virus and the disruption to travel, business and healthcare it has created. In this challenging environment, attracting and promoting business investment remains a key driver of the global economy and domestic prosperity, and we at TMF Group are happy to help drive simplification through regulators and governments.
“It has been a constant observation, from eight years of our sophisticated reporting, that some of the most attractive markets to trade are the most complex and the most punishing for mistakes. Companies usually have a small number of large bases, often in locations that are relatively easy to operate. Then they have a long line of small offices scale in more complex sites. This exposure caused by its “complex tail” is where the risks are concentrated.”
In addition to analyzing 77 sites, the report identifies key issues shaping the global business landscape and regulatory environment.
There was a general increase in penalties for non-compliance. Fines are the most common punishment for accounting and tax offenses, levied for doing business without registering taxes in 93% of jurisdictions in 2021 compared to 84% last year.
Penalties are more severe in complex jurisdictions. While 45% of jurisdictions worldwide can suspend a business license to do business without registering for tax purposes, this figure rises to 70% in more complex jurisdictions. Since 2020, penalties for tax reporting and payment errors have also increased.
Increase responsible governance
A renewed focus is being placed on companies that act responsibly in all business activities, from hiring workers to paying taxes and ensuring transparent structures.
Requirements such as UBO and PSC have been stable since 2020, as has the percentage of jurisdictions that adopt property registries, showing that transparency processes are consistent from year to year. The report shows that requirements for submitting UBO and/or PSC information to a central registry are higher in the EMEA region in 82% of jurisdictions, compared to 43% in the Asia Pacific region.
The mandatory participation of third parties in business operations has increased. In 2020, 17% of jurisdictions required an entity to hire and register a public accountant, up from 27% in 2021.
The impact of Covid-19 on digitalization, human resources and salaries
Covid-19 has accelerated trends in the digitization of operations and the simplification of interactions between businesses and government authorities. In 2021, automatic notification from all relevant government authorities when incorporating a company increased to 14% of jurisdictions worldwide, compared to 6% in 2020.
Some jurisdictions are temporarily allowing digital signatures, a move our experts believe will turn into a long-term change. In contrast, there have been significant delays in jurisdictions such as Colombia and Argentina where personal designations are required to process incorporation documents.
The report highlights how the pandemic has changed the way companies manage their employees. In 2021 20% of companies allowed layoffs for no reason, up from 29% in 2020, 14 North American jurisdictions contributed the most to this decline, with 64% allowing such layoffs in 2020 versus 23% in 2021.
Telecommuting and a globalized workforce pose recruitment and payroll challenges within and within jurisdictions. In the US, Covid-19 has prompted companies to hire remote workers in various states, adding to payroll issues as income taxes are set and reported at the state level.
- Costa Rica
the last ten
- United State
- British Virgin Islands
- Cayman Islands
- Hong Kong