Our analysis spans the areas of regulatory compliance that apply to businesses looking to expand overseas. While globalisation is driving many jurisdictions to align with international regulatory standards, most also maintain their own local requirements. These two sets of rules determine the overall level of complexity faced by businesses. Our specialists report that most jurisdictions aim to develop local standards that exceed international norms, enabling international legislation to be pre-empted.
In Switzerland, for example, banking secrecy legislation laid the groundwork for data protection a decade before GDPR, making compliance a simpler process. Companies are responsible for their own compliance with international regulations and that of suppliers and partners. This can add complexity but steers all parties towards operational alignment.
of jurisdictions said opening a corporate bank account abroad is time-consuming
of jurisdictions agree that technology is reducing complexity in their market
of jurisdictions said dissolving a private company takes more than six months on average
of jurisdictions require official documents for submission to local government authorities to be in local languages
% of jurisdictions requiring directors of a private company to be native or resident:
Technical and regulatory developments are simplifying processes for companies that expand overseas.
Reporting requirements frequently add to compliance complexity.
The accounting and tax component of our research explores what is legally required of businesses in the financial sphere. Complexity increases when legislation changes frequently and when new requirements move the goalposts.
However, in many jurisdictions, modernisation is starting to make life easier for foreign firms. For example, 63% of jurisdictions allow accounting records to be maintained abroad and 52% accept tax payments from an overseas bank account. Authorities in many jurisdictions are providing businesses with useful advice. Two thirds of the jurisdictions we surveyed provide written guidance on how to apply local rules and regulations.
of jurisdictions require tax invoices to be issued in an electronic format
of jurisdictions say that the accounting software used to maintain local books of accounts must comply with local authorities’ requirements
of jurisdictions must submit accounting records to state authorities in electronic format
of jurisdictions have a separate tax registration and entity incorporation process
The digital revolution — Digitisation is transforming reporting in many jurisdictions. Electronic submissions boost transparency, efficiency, accuracy and processing speeds.
Our research reveals that companies need to submit accounting records to state authorities electronically in 51% of jurisdictions, while 39% require tax invoices to be issued in an electronic format. In Brazil, for example, digitisation of these processes began in 2000 with the development of SPED, which includes digital signature technology.
New technology frequently suffers from teething pains and it takes time for businesses to learn how to comply with new processes. In the long term, however, as platforms are refined and developed, the shift to online should benefit businesses by reducing complexity.
of jurisdictions, a tax audit cannot be postponed
of jurisdictions, deadlines for tax/statutory filings cannot be extended
of jurisdictions say country-by-country reporting requirements are implemented in their jurisdiction
of jurisdictions require a local license to be obtained prior to becoming operational
We have investigated the human resources and payroll challenges facing businesses. Around half our specialists report that labour laws are difficult to understand and comply with in their jurisdictions. It gets even harder if payroll legislation continually changes – sometimes retrospectively – especially if the local government does not provide useful compliance guidance.
There are multiple sources of complexity in this area:
(1-10 scale, 10 = the most complex)
A Setting up newemployee contracts B Understanding local labour laws C Complying with local labour laws D Managing union relationships E Setting uppayroll F Complying withhealth and safety legislation G Managing employee complaints H Managing disciplinaryprocesses
I Firing an under-performing employee J Managing redundancies K Complying with bullying and harassment legislation L Complying with equal opportunities legislation M Complying with modern ANTI-slavery legislation N Managing employeeprobation periods
A Flexible working hours B Option for remote working C Paid maternity leave D Paid paternity leave E Shared maternity/paternity leave F Compassionate leave G Overtime pay H Health insurance I Dental insurance J Paid vacation/time off K Paid sick days
L Childcare assistance M Free/subsidised eye tests N Life insurance O Personal leave P Pension fund Q Severance/redundancy pay R Minimum wage/minimum hourly rate S Housing/social care contributions T Transportation allowance U Grocery bonus V Paying a 13-month salary or bonus