The Philippines is the 20th most complex place to do business in the world, according to a new report by TMF Group, a provider of international administrative services.
The Global Business Complexity Index, which compares key administrative and compliance demands across 76 jurisdictions worldwide, ranked the Philippines 20th for business complexity.
In the top 10 of the world’s most complex places to do business are, in order, Greece, Indonesia, Brazil, United Arab Emirates, Bolivia, Slovakia, Germany, Turkey, China, and Peru.
“Rapidly changing legislation combined with complex labour laws puts Greece at the top of the Global Business Complexity Index… sometimes, multiple laws conflict and it can be hard for businesses to know which one to comply with,” the report said.
The Cayman Islands ranked as the least complex country for business complexity in the world, followed by Curaçao, Jersey, Thailand, Paraguay, Israel, Switzerland, Denmark, and British Virgin Islands.
“Authorities have worked hard to ensure the Cayman Islands is a transparent and pro-business jurisdiction. This has helped it to achieve the lowest complexity score on our index. With its healthy economy, this is an easy place for foreicng companies to operate,” the TMP Group report said.
The report ranks worldwide jurisdictions by how simple or complicated they are to do business. It measures factors such as rules regulations and penalties, the difficulty of accounting and tax, and the difficulty of hiring, firing and paying staff.
The report noted that globalisation is creating a more uniform regulatory landscape across jurisdictions as they adopt international standards. However, significant variation between countries and continents remains. In some instances, global and domestic legislation combine to amplify complexity.
Four key themes about the cause of complexity emerged from the research. It found that local rules, regulations, and penalty systems can be hard to navigate, with companies in over a third of jurisdictions find this very or extremely complex.
Many jurisdictions also change their legislation frequently, either to bolster the economy or make their market more attractive for investment. In the US, for instance, tax reform is making it easier for foreign businesses to repatriate profits, which encourages foreign investment.
Another key theme is that managing accounting and tax is very or extremely complex for 17 per cent of jurisdictions, often because local authorities prescribe their own reporting formats for accounting.
Also, setting up processes to manage hiring, firing, and paying employees is very or extremely complex in 42 per cent of jurisdictions because of complex local labour laws, specific reporting requirements, and the difficulty of hiring staff before a business has been incorporated as legal entity.
The Global Business Complexity Index was compiled using research conducted among TMF Group’s specialists in 76 jurisdictions.
“We measure complexity in terms of how complicated and unpredictable a business environment is and how difficult it is to understand and operate in,” TMF Group said.
The Global Business Complexity Index – the full rankings:
04 United Arab Emirates
11 El Salvador
30 South Africa
31 Costa Rica
43 United Kingdom
48 Czech Republic
56 Hong Kong
63 Dominican Republic
64 New Zealand
66 United States
68 British Virgin Islands
76 Cayman Islands