Top 10 Most Complex Jurisdictions 2024

Greece ranks as this year's most complex jurisdiction, climbing from 6th in 2022 and 2nd in 2023. While Greece has consistently been considered complex, particularly within accounting and taxation (A&T), its HR and payroll (HRP) functions have increased in complexity in 2024.

The complexity of today's business environment is driven by several key factors. In the first instance, there is the need to comply with numerous aspects of legislation. TMF Group experts in Greece identified up to 31 decisions and one new legislation per week that companies have to abide by.

And rather than simplifying processes, digitalisation has instead added an additional layer of complexity. One example is MyData, an accounting software necessitating digital submissions, that requires multiple new deadlines across platforms. Limited knowledge of these complexities can often compel foreign investors to seek third-party advisors for A&T and HRP, only increasing costs. Challenges are expected to persist in the short-term as businesses adapt to new requirements, but the long-term outlooks anticipates that digitalisation will simplify operations over time.

France ranks second in this year's index, falling from first place in 2023. The complexity in France primarily stems from its unique accounting standards, French language requirements for documentation, and new regulations implemented in 2024.

New rules around Ultimate Beneficial Owners (UBO) reporting and tax regulations have added layers of complexity. Additionally, stringent labor laws increase operational costs for businesses operating in the country.

Despite these challenges, France offers a stable business environment within the EU and continues to attract European talent. However, additional reporting requirements from EU Non-Financial Reporting Directive (NFRD) and ESG regulations have created additional compliance burdens. Digitalization efforts have been slow compared to other European countries, which contributes to its high complexity ranking.

Colombia ranks third in this year's complexity index due to its frequently reformed tax and accounting systems. The country's political and social instability has historically deterred investors, though recent political shifts may lead to improvements.

Despite these challenges, Colombia boasts numerous trade treaties and is relatively advanced in ESG reporting adoption compared to its regional peers. The country has made strides in improving its business environment but navigating its regulatory landscape remains challenging.

Foreign businesses often find that local expertise is essential for successfully operating in Colombia, as there are many cultural and regulatory nuances that can be difficult to navigate without specialized knowledge of the local context.

Mexico ranks fourth in the complexity index, characterized by complex rules for banking setup and visa processes. However, the country has made significant improvements in digitalization, particularly with e-invoicing systems.

Mexico benefits substantially from US nearshoring initiatives and the T-MEC trade agreement (USMCA), positioning it as an attractive destination for businesses looking to serve the North American market. Efforts to improve anti-money laundering measures and align with OECD standards have added complexity in the form of additional audits.

Despite the increased compliance burden, these measures have also boosted investor confidence in the Mexican business environment. The country continues to balance regulatory improvements with the need to maintain its competitive position in global supply chains.

Bolivia has moved up to fifth place from ninth in the previous ranking. The country's complexity stems primarily from its outdated tax system, which still requires physical presence for many procedures and paper submissions that must be kept for up to 8 years.

Knowledge of the local language is essential, as documentation in other languages is typically not accepted. The regulatory environment carries high sanctions for non-compliance, making it particularly challenging for foreign businesses to operate without expert local support.

Bolivia's growth potential lies in agricultural exports, but regional political instability poses an ongoing threat to business continuity and investment planning. The slow pace of digitalization and modernization in government processes contributes significantly to its high complexity ranking.

Turkey ranks sixth in this year's complexity index. Its position is driven by frequent tax law changes, hyperinflation leading to new capital requirements, and a strict requirement for all documents to be in the Turkish language.

Economic instability continues to be a major challenge, with hyperinflation and the devaluation of the Turkish lira creating unpredictable business conditions. Despite government incentives for foreign investment, bureaucratic hurdles remain significant.

The strategic geographic position between Europe and Asia provides Turkey with unique trade advantages, but the highly volatile economic and regulatory environment requires businesses to be extremely adaptable and well-supported by local expertise to navigate successfully.

Brazil has dropped from third to seventh place, not because it has become less complex, but because other jurisdictions have increased in complexity more rapidly. The country's main complexity factors include varied tax legislation across different administrative levels (federal, state, municipal) and differing labor regimes.

Union strength varies significantly by region, with some areas having much more powerful labor organizations than others. These variations require deep local knowledge to navigate effectively, making it challenging for foreign businesses to operate without specialized support.

While concerns exist about potential tax reforms, Brazil is actively working to join the OECD and expand its trade relationships. The central bank's proactive measures to control inflation may bring more economic predictability, potentially reducing some aspects of business complexity in the future.

Italy ranks eighth in the complexity index, with frequent tax law changes and numerous monthly compliance obligations in both taxation and HR functions being the primary drivers of complexity.

While HR and payroll services have improved in recent years, and digitalization has helped streamline some bookkeeping processes, the overall regulatory environment remains challenging. Incorporating a business in Italy isn't particularly difficult, but ongoing operations often require specialist support.

Geopolitical factors affecting supply chains represent a vulnerability for Italian businesses. Despite being a major European economy, Italy continues to struggle with bureaucratic inefficiencies that contribute to its high complexity ranking.

Peru ranks ninth in the complexity index, characterized by complex licensing requirements and persistent political instability since 2016. This political uncertainty has deterred investment and limited the availability of talent in the country.

Highly regulated labor laws and frequently changing tax rules create additional challenges for businesses operating in Peru. While rich in natural resources with significant potential in the mining sector, political uncertainty remains the primary deterrent for investors.

Companies already established in Peru often find that maintaining compliant operations requires specialized local expertise and constant vigilance regarding regulatory changes. The lack of political continuity makes long-term planning particularly difficult.

Kazakhstan rounds out the top 10 of the complexity index, primarily due to complex HR processes, strict currency control scrutiny, and international tax issues involving visas and work permits. Frequent legislation changes are particularly difficult for global firms to track.

On the positive side, the government is actively seeking foreign investment and has made progress in digitalizing administrative processes. Kazakhstan has also benefited from the relocation of Russian businesses following the Ukraine conflict.

While managing the economic impacts of the conflict with Ukraine, Kazakhstan continues to position itself as a Central Asian hub for business. Its strategic location between China and Europe provides trade advantages, but navigating its complex regulatory environment requires specialized expertise.