2024 GBCI rankings announced: Netherlands and UK among the 10 easiest countries to do business in…

LONDON, May 29, 2024 (GLOBE NEWSWIRE) — TMF Group, a leading provider of compliance and administration services, today published the 11th edition of its annual report. Global Business Complexity Index (GBCI).

This comprehensive report analyzes 79 jurisdictions, accounting for 93% of the world’s GDP and 88% of the world’s net FDI inflows. The report compares 292 indicators tracked annually and provides data on key aspects of doing business, including incorporation timelines, payroll and benefits, rules, regulations, tax rates and more.

These indicators are important for companies investing in a country, as well as for local businesses and entrepreneurs looking to set up shop in the country. Regardless of the country, there is a correlation between low business complexity and wealth per capita. This is shaped by many factors, but the bureaucratic burden imposed on businesses is a major one.

The Netherlands, Denmark, the UK, Hong Kong and the Cayman Islands maintain their status among the 10 jurisdictions with the least complexity in doing business, due to factors such as simple and stable tax systems, adherence to international financial standards and a stable regulatory environment.

As for the UK, it is still considered a relatively easy jurisdiction to do business in. The country has low complexity in accounting, tax and corporate control systems due to a simple and stable tax system and adherence to international financial standards. The regulatory environment is also stable, enhancing predictability for businesses. However, the challenges posed by Brexit and Covid-19 are becoming tougher, especially in terms of HR and staff retention. Workers expect competitive benefits packages and a better work-life balance. Moreover, post-Brexit, some companies have relocated their headquarters outside the UK due to high costs and complex recruitment requirements, adding to the complexity.

The United States has fallen outside the top 10 least complex jurisdictions for the second consecutive year. This is due to the introduction of a corporate transparency law with ambiguous application and unclear liability of service providers, and the United States currently has no substantive UBO law. In addition, the upcoming presidential election and the recent introduction of foreign tariffs are sources of uncertainty for foreign investors worried about the country’s economic outlook. However, in a globalized economy, the skilled workforce and clear global reach make the United States an attractive jurisdiction for foreign investors.

In terms of complex jurisdictions, Greece takes the top spot in this year’s report, moving up from sixth place in 2022 and second place in 2023. Greece has consistently been considered complex, particularly in accounting and tax, but its Human Resources and Payroll (HRP) rules are also set to become more complex in 2024. Additionally, digitalization poses an additional challenge to consider.

Mark Weil, CEO of TMF Group, said: “There is several research pointing to the more complex pathways that companies are now establishing to de-risk their supply chains and routes to market. Some of these pathways involve conducting business through complex countries. This leaves our clients dealing with twice the complexity as they need to be present in more countries, many of which are more challenging to do business in. TMF Group solves this problem by helping our clients invest and operate safely anywhere, as a single trusted partner.”

GBCI 2024 also identifies key themes that will shape the global business and regulatory environment.

How global regulatory compliance impacts foreign investment

This year’s GBCI shows that most jurisdictions express confidence in the stability of the law over the next five years, continuing an upward trend from previous years. For example, in 2020, only 35% of jurisdictions predicted that there was likely to be no significant change to the law. With each passing year, the perception that no significant change will occur increased, reaching 58% of jurisdictions by 2024.

The report suggests that it is not the volume or complexity of the legislation that is at issue, but rather the speed at which regulatory change is being introduced that is the real difficulty.

Geopolitical factors and bridging economies

Geopolitical instability is clearly impacting trade flows and investment choices globally. Supply chain disruptions and trade barriers, coupled with persistently high energy prices, are also creating significant challenges for global businesses. As a result, many companies are reassessing their long-term growth plans and expansion objectives.

But while geopolitical issues are disrupting supply chains and creating trade barriers in some jurisdictions, others are finding themselves benefiting from the global changes. Countries known as “bridge countries” have the ability to benefit from their departure from established blocs of power due to their neutrality on global issues. For these “bridge countries,” their newfound status in global supply chains has become an important lever for multinational companies seeking to manage risk during times of international uncertainty.

Uncertain times and strategies for success – technology and staff retention

Jurisdictions cited a range of factors influencing growth, with IT and technology topping the rankings as the most influential. Technology brings about growth in multiple ways as it can provide growth opportunities if a country has the technical manufacturing expertise and can increase market share through production. Using technology to improve productivity was identified in relation to workforce rationalization. Several jurisdictions, including New Zealand and Hong Kong SAR, saw companies automating back-office, entry-level and part-time jobs using generative AI to reduce workforce numbers and focus on higher value tasks.

At the same time, the majority of jurisdictions are finding it difficult to attract and retain top talent (78%), with this figure even higher in the EMEA (90%) and APAC (79%) regions.
The ability to respond effectively to demand depends primarily on two dynamics: local labor laws and local talent. Jurisdictions with strict labor laws and a strong union presence, or where talent is scarce, have much less ability to adjust staffing levels quickly.

Top 10 and bottom 10 (1=most complex, 79=least complex)

Media Contact:

TMF Group:
Giampaolo Argitto
[email protected]