TMF Group's Global Business Complexity Index 2024 explores 292 different indicators relating to business complexity, to provide in-depth analysis of the global and local challenges that impact on the ease of doing business across the world.
In this article, we take a closer look at the jurisdictions at the lower end of this year's index, exploring the reasons behind their rankings as the markets where doing business is the easiest. Levels of complexity are low in these locations, which is usually synonymous with quick incorporation times, a stable regulatory environment, straightforward reporting processes and high levels of digitalisation - all elements that typically pave the way to growth.
We hope that the insights from the GBCI will help investors pick and manage their target markets with greater confidence. Our message isn't to gravitate towards simpler jurisdictions and avoid investing in those that are more complex, as these are often among the most attractive for talent and customer opportunities. Rather, it is to invest with eyes open, and be ready to manage the rules that might otherwise put your operations at risk.
70. Jamaica
Jamaica has witnessed a significant drop in complexity, with GEM identified as the key driver of this change.
The main shift surrounds UBO registry. In 2024, all organisations are now required to adhere to the UBO registry, boosting Jamaica's international image by facilitating due diligence processes and enhancing investor confidence.
Setting up a company in Jamaica is generally straightforward due to clear rules and regulations. Challenges typically arise around KYC demands and physical requirements for signing documents. However, these challenges mainly occur during company establishment as taxation submissions have predominantly moved online, easing the process and improving compliance.
The positive trend is expected to continue with a stable political situation and potential tax reductions in the annual budget, possibly across value-added tax and payroll taxes, making Jamaica attractive for international clients seeking lower business costs and investment opportunities.
When clients are able to submit taxation documents online - from their offices or homes - instead of having to go into the tax office to submit a sales stats report, annual income tax report or a payroll reduction report, it will be even easier.
TMF Jamaica expert
Dive into the data for Jamaica, using our Complexity Insights dashboard.
71. British Virgin Islands (BVI)
BVI consistently ranks among the least complex jurisdictions in GBCI thanks to its commitment to regulatory alignment with international standards, providing a familiar framework for multinational entities to operate within. Despite occasional legislative challenges, the BVI continues to foster a favourable business environment, helping the jurisdiction maintain its global market allure.
Recent changes in the BVI's legislation, however, have added a level of complexity for businesses, particularly affecting companies with simple operations. With a more stringent need for reporting and compliance, businesses are now compelled to fulfil more robust legal requirements, such as filing annual returns through a registered agent.
Earlier concerns about the BVI being blacklisted by the EU have not significantly affected multinational organisations. The blacklist placement resulted from legislative changes that were not effectively implemented in time but are now positively resolved.
The BVI Business Companies Act has further streamlined operations by incorporating multinational clients into local legislation. Improved connectivity and digitalisation have simplified business operations, enabling easy transfer and transmission of information across the BVI.
BVI is a well-regulated jurisdiction with constant updates in legislation. This can sometimes be hard and costly to keep up to date with. However, as a politically stable jurisdiction based on English common law, we remain an attractive option to businesses operating globally.
TMF BVI expert
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72. Jersey
Jersey remains one of the simplest jurisdictions in the GBCI, dropping from 70th to 72nd in 2024. The stability is mainly due to its highly regulated environment, providing assurance to foreign businesses and investors.
Geographically, Jersey's proximity and similar time zone to the UK make it favourable for business operations. A wealth of tax and legal experts in the area can also help ensure seamless regulatory compliance for those navigating the operational challenges of complying with multiple jurisdictions.
Whilst enhancements in AML legislation have resulted in wider scrutiny from the Jersey Financial Services Commission (JFSC) and, therefore, initial delays for newly incorporating businesses, these processes are now running smoothly.
Like many jurisdictions, Jersey faces talent acquisition and management challenges. To address these, technology and AI are being harnessed to improve efficiencies and manage workload, aiming to increase output, ensure job satisfaction and improve staff retention.
Investors might be turned off by the level of due diligence involved and the time it takes to onboard - but we now fine-tune that process where I think as administrators, we understand what the regulators are looking for. You've got Jersey Finance, the JFSC and the government of Jersey all working closely and who are quite nimble in how they react together and adapt to the change in regulatory framework at any point in time.
TMF Jersey expert
Dive into the data for Jersey, using our Complexity Insights dashboard.
73. United Kingdom
The UK consistently ranks among the least complex jurisdictions in which to do business. This year it stands at 73rd, a slight decrease from 72nd last year. The UK exhibits low complexity in A&T and GEM due to its simple, stable tax system and adherence to international financial standards. The regulatory environment is stable, adding to predictability for businesses.
However, the UK faces challenges in HRP. Anticipated changes in payroll regulations, potential legislative changes around pensions, holiday pay and absence payments, and potential reductions in the auto-enrolment age for pensions could impact payroll operations.
There are also cultural changes in UK talent, with workers expecting competitive benefits packages and better work-life balance. Post-Brexit, some businesses have re-located their headquarters out of the UK due to high costs and complex hiring requirements. These are unique post-COVID challenges that businesses must stay informed of to ensure success.
We should no longer be viewing the UK as one of the simplest places to set up payroll. Its simplicity is more driven by the fact that it's an English-speaking country so that may make it easier for those operating internationally. But the reality is that the complexities behind that now are becoming more demanding.
TMF UK expert
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74. The Netherlands
Thanks to its client-friendly approach to laws, regulations and process, the Netherlands regularly ranks as one of the simplest jurisdictions for business operations. Notably, the country's regulatory stability, support for new ventures, and strong ecosystems for fintech and AI-driven businesses attracts foreign investors.
The Netherlands' centrality within the EU makes it a hub for cross-border business activities. Similarly, the UK's departure from the EU has further encouraged businesses to set up operations in the Netherlands to benefit from specific EU advantages.
However, attracting and retaining talent is a challenge due to the country's low unemployment rate. To address this, companies often hire international personnel, facilitated by the ease of relocation to the Netherlands. Over the years, the Netherlands has become more flexible in employment structures, with the growth of remote working practices and flexibility in work arrangements, even allowing employees to work from abroad for extended periods. This makes the Netherlands an attractive jurisdiction for global businesses.
Stability and certainty are important, which is something that the Netherlands can offer. So, whether it's companies that are investing into targets or whether it's indeed the fintech world or a start-up and scale-up type of businesses that are being set up in the Netherlands, the country is an attractive option for foreign investment.
TMF Netherlands expert
Dive into the data for The Netherlands, using our Complexity Insights dashboard.
75. New Zealand
New Zealand continues to be an easy place for businesses to set up and operate, with a low barrier of entry and clear online laws and regulations. However, although the requirement of having a resident director could be a hurdle for some businesses, this is quite a common stipulation across the region and therefore does not put New Zealand at a disadvantage.
Over the next 12-24 months, there are expected changes in the way earnings are calculated, impacting tax and benefits for pay-as-you-earn individuals. Whilst this will affect the complexities of payroll calculations, it will not affect the hiring or firing. Ensuring labour legislation does not limit attraction of talent is key - New Zealand has recently faced a "brain drain" due to improved access to citizenship in Australia. Combined with high wage demands due to inflation, some organisations operating in New Zealand may find it difficult to retain talent.
However, from a market opportunities perspective, New Zealand faces opportunity due to legislation change in Australia. When compared to Australia, New Zealand has more lenient regulations on e-cigarettes and scooters - this can create regional competitiveness and could lead to market share growth.
It's very easy to start a company, hire people and then comply with laws and regulations. I think it's quite simple. All online in black and white.
TMF New Zealand expert
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76. Hong Kong, SAR
A key challenge for businesses setting up in Hong Kong, SAR is its banking methods. The in-depth KYC requirements and the need for in-person banking setup can make the process lengthy. However, once established, Hong Kong, SAR's low and straightforward tax system remains attractive to businesses.
Another challenge is a shrinking talent pool due to people seeking opportunities outside Hong Kong, leading to increased salary demands. Some companies are addressing this by improving efficiencies with AI or outsourcing, especially given the high office space costs across the country.
There are discussions around taxing foreign source income and while the extent is unclear, it could potentially deter international companies. Despite these challenges, Hong Kong, SAR maintains its position as a key hub in East Asia, offering strong competition to Singapore and serving as a unique gateway to the Chinese market, which can be advantageous for businesses.
Accounting and tax drive our simplicity. Although following the international financial standard is quite common for other jurisdictions, we also follow very simple tax schemes for both the corporate and the individual. With no VAT, it's a very simple model.
TMF Hong Kong expert
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77. Denmark
Denmark, maintaining its position at 77th in the GBCI, is committed to a simple business environment with stable laws, regulations and economic conditions. The country's efforts to streamline business activities, notably through digitising taxation processes, have significantly eased business setup and reporting, making it faster and less complex. Denmark's advancements in technology and science create further opportunities for growth.
Like many jurisdictions, Denmark struggles with attracting and retaining talent due to low unemployment rates. However, a recent shift towards more flexible employment, with companies embracing hybrid working, has created a more nuanced approach to working arrangements, enhancing Denmark's appeal to highly skilled talent.
Progressive in its approach and with no imminent changes that might add complexity, Denmark continues to uphold its reputation as a hub of operational simplicity.
Denmark is becoming easier and easier because everything is digital. You don't need to wait for months, and you don't need to do paperwork.
TMF Denmark expert
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78. Curacao
Curacao's position as one of the simplest jurisdictions for global business operations is attributed to its stable business environment and minimal regulatory changes. Digitalisation of processes, particularly tax returns, has further simplified business operations.
A potential challenge for international clients setting up operations in Curacao has shifted from regulatory complexities to business viability. While the island used to be an attractive spot for setting up companies for tax benefits, changes in regulations and global transparency norms have caused a slowdown in the setup of new corporate structures.
Incoming legislation requiring businesses to record daily working hours and provide additional information to the regulator will add a layer of regulatory compliance. However, these changes do align with broader EU regulations.
Economic shifts - the closure of refineries and slower growth in the financial sector - have redirected government focus to expanding the tourism and leisure industries. This has led to real estate opportunities as more people invest in second homes, serving tourism needs.
Despite potential challenges, Curacao's stable environment, minimal regulatory changes and growing opportunities in the tourism and leisure sectors continue to make it one of the simplest jurisdictions for global business operations.
Basically, nothing much has changed. On the A&T side, it's similar - it's not that there's any up-keeping requirements or specific requirements for how the balance sheet should look. On the HRP side, there haven't been changes in taxes, so it's all pretty stable.
TMF Curacao expert
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79. Cayman Islands
The Cayman Islands ranks as the least complex jurisdiction, consistent across service lines and over recent years. Its straightforward taxation system and high level of digitalisation simplify operations for international businesses. Government and regulatory interactions are also mainly through online platforms, enabling remote operations.
The Cayman Islands' tax-neutral status presents unique opportunities for businesses, with an increasing number of private funds being set up in the area. In addition, the recent removal of the Cayman Islands from the EU's grey list has increased its international appeal.
Challenges are twofold. Difficulties can stem from a lack of understanding of local regulations by international clients. While these regulations are not complex, they can seem overwhelming to newcomers. The jurisdiction also faces a skills gap, particularly in regulatory and compliance knowledge, making local talent hard to find.
Limited legislative change is predicted for the next 12 months, with laws like the Exempted Limited Partnership Amendment Bill and the Virtual Asset Service Providers Amendment Bill currently under public consultation. However, these are not expected to entail major changes for international clients.
Because we are a tax neutral country, HRP is very
simple. This also helps with the perception of our accountancy
services. Taxes are not levied on capital gains or income, which
simplifies the account services that we would provide to our
clients. So, we end up at the bottom of the scale when compared to
onshoring jurisdictions who have to abide by
complicated
tax rules.
TMF Cayman Islands expert
Dive into the data for Cayman Islands, using our Complexity Insights dashboard.
The Global Business Complexity Index 2024
This article is an extract from TMF Group's latest report: The Global Business Complexity Index 2024.
Explore the GBCI rankings, analysis and global trends, to help you cut through the layers of corporate compliance complexity – download the report in full here.
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