The UAE has landed in at fourth worldwide for business complexity according to a study by international professional services firm TMF Group.
With nearly 8,000 in-house experts operating in 80-plus jurisdictions worldwide, the TMF Group provides localised on-the-ground compliance and administration services in areas such as fiduciary, company secretarial, accounting, tax and payroll to clients operating and investing internationally. Well placed then to assess such matters, a recent TMF report has ranked the UAE as the fourth-most complex for business out of 76 jurisdictions worldwide.
Measuring ‘complexity’ in terms of how “complicated and unpredictable a business environment is – and how difficult it is to understand and operate in”, the Global Business Complexity Index takes into account specialist interviews and an in-depth business survey examining local rules, regulations and penalties, the accounting and tax landscape, and human resource issues around the hiring, firing and paying of employees – before arriving at a statistically weighted ranking.
According to the analysis, Greece was considered the most complex current business landscape worldwide – thanks to rapidly changing legislation and complex labour laws – followed by Indonesia and Brazil. Adjudged 4th, the UAE, due in part to the suite of recently introduced reforms aimed at reducing complexity. Over the long term, TMF says, the new legislation should make it operationally easier for businesses in the UAE – but add complexity in the short-term.
“In over a third of countries analysed, local rules, regulations and penalty systems present major challenges for companies. In many of cases, frequent and significant changes, often designed to attract investors, actually add to complexity,” said TMF Group CEO Mark Weil, who added; “Complexity is no reason to avoid investing. It is a dimension which must be managed. With the right local knowledge and preparation, good companies can thrive anywhere.”
The Emirates, of course, also includes multiple jurisdictions – “each with its own set of regulations and requirements governing company establishment, compliance and filing.” The report notes that while the UAE’s relatively business-friendly jurisdictions are moving ahead with process automation and digitisation, in-depth local knowledge is required when operating in other jurisdictions – including, potentially, the translation of official documents into Arabic.