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TMF Group, a prominent provider of compliance and administrative services, has recently released the tenth edition of its Global Business Complexity Index (GBCI).

This extensive report examines 78 jurisdictions (77 in 2022), encompassing 92% of the world’s total GDP and 95% of net global FDI flows. The analysis covers nearly 300 annually tracked indicators, offering insights into critical business aspects such as legislation, compliance, accounting procedures, tax regulations, human resources (HR), and payroll processes.

Within the APAC region, Indonesia leads as the most complex jurisdiction (11th globally, compared to 6th in 2022), followed by mainland China (15th), South Korea (16th), Malaysia (21st), and the Philippines (31st). Remarkably, this marks only the second instance in the past decade when no APAC countries feature among the ten most complex jurisdictions.

In contrast, India (33rd) has made significant strides in this year’s rankings, mainly due to legislative reforms and the liberalization of guidelines, effectively reducing the compliance burden. Similarly, Vietnam (46th) has embraced official online systems for updating new regulations, contributing to enhanced efficiency.

On the flip side, Hong Kong (74th) has consistently maintained a position among the ten least complex jurisdictions for three consecutive years. The city’s commitment to international alignment and streamlined business procedures has borne fruit. Despite its straightforwardness, conducting business in Hong Kong involves rigorous due diligence checks and “know your customer” (KYC) requirements.

Shagun Kumar, Head of APAC at TMF Group, remarked, “The tenth edition of our Global Business Complexity Index highlights diverse levels of complexity across the APAC region. Hong Kong and Australia manage to maintain their positions among the least complex jurisdictions this year. While challenges are still very present in countries like Indonesia and mainland China, opportunities for international businesses are still up for grabs.”

Furthermore, the report identifies three key themes shaping the global business landscape and regulatory environment:

Geopolitical and Economic Turbulence: Geopolitical challenges and global economic factors are impacting companies’ expansion plans and operations. In APAC, 93% of surveyed jurisdictions note the trend of employees seeking better financial packages due to inflation.
Global Compliance Challenges: Compliance procedures, such as “know your customer” (KYC) checks, have become more rigorous due to sanctions and regulations against certain businesses and individuals. However, this can also enhance the attractiveness of certain jurisdictions, especially for private wealth and family office individuals seeking stability.
Environmental, Social, and Governance (ESG) Considerations: ESG reporting requirements are gaining prominence, prompting governments to hold businesses accountable for reducing their carbon footprint. Initiatives in Malaysia and India highlight the growing emphasis on ESG commitments and reporting.

The report also provides a list of the top and bottom ten jurisdictions in terms of complexity.

Top and bottom ten (1= most complex, 78= least complex)

1 France

2 Greece

3 Brazil

4 Mexico

5 Colombia

6 Turkey

7 Peru

8 Italy

9 Bolivia

10 Argentina