The difficulty or ease of corporate compliance for businesses in Latin America varies greatly depending on what country you are operating a business in.
Central America is among the least complex while countries in South America are some of the most complex. The Compliance Complexity Index 2018 ranked 84 countries around the world according to the difficulty of adhering to compliance requirements. These included the type and amount of information that companies must report to local authorities as well as complying with national regulations.
Countries in South America ranked among the top ten in the index meaning that they are some of the most complex nations for corporate compliance. These included Argentina coming in at number 4 globally but number 1 in the Americas, Brazil at number 7 and number 2 in the Americas and Uruguay in the tenth spot globally and number 3 in the Americas.
Central American countries fell on the other side of the spectrum with two countries among the ten least complex. Nicaragua ranked at number 80 globally with Honduras at 81.
South America -the most complex
It is not surprising that Argentina is the most complex jurisdiction in the Americas since last year the government adopted new measures aimed at simplifying corporate governance. While the goals of these new systems are to make things easier in the long term, it is only making it harder for businesses to adapt to the changes. Implementing the new and confusing regulations of filing paperwork and reporting makes it the most complex country for compliance in Latin America.
Brazil's political situation and upcoming elections as well as procedural changes in registering companies add to the complexity of the country. Brazil's large bureaucracy may be trying to make things easier by implementing new regulations but it brings new challenges during the initial start of the processes.
Uruguay has implemented global regulatory initiatives such as UBO and CRS which has significantly increased the complexity of doing business in the country. The country has also put anti-money laundering regulations on the book. Companies must provide and report information to the correct regulatory bodies under these new laws. Uruguay's proactive approach to adopting global initiatives is the reason for the country's high position in this year's ranking but it should not put companies off from exploring Uruguay. "Recent compliance measures may generate complexity in the near-term, but over time, they will enhance confidence and transparency in the market," explains TMF Uruguay Managing Director Pablo Gonzalez Coló.
"As one of the freest economies in Latin America, Uruguay remains a great place to do business. Investors and international companies will find here a wealth of opportunities."
Central America- least complex
Honduras ranks as the least complex jurisdiction in the Americas and one of the least complex global because of the lack of requirements when it comes to corporate secretarial work. Businesses do not have to do much reporting. The country has been working to put in new policies to try to stop illicit activities so in the future this will increase the complexity of the financial processes.
With no recent changes in legislations or any new regulatory processes in Nicaragua, this country is one of the least complex when it comes to corporate compliance.
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Compliance complexity varies so much around Latin America and business people and legal teams need to take this into account when operating in these jurisdictions. Using in-country corporate secretarial experts, such as TMF Group in any of these countries, allows companies to reach new heights and focus on their core business.
Download the Compliance Complexity Index 2018.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
