India is the third most complex jurisdiction in Asia Pacific for accounting and tax compliance – but is no longer among the 10 most complex countries in the world, according to TMF Group’s Financial Complexity Index 2018.

We ranked 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific and the Americas; 1 being most complex through to 94 the least complex. India came in at 13th, indicating a decrease in complexity since its 2017 inaugural ranking of 10. China is at number 1, while Cayman Islands at 94 is once again the least complex jurisdiction for financial compliance. To determine the rankings with its in-country experts, TMF Group used a 74-question survey with weighted complexity parameters, namely; regulatory compliance, tax, statutory reporting and bookkeeping.

The 10 most complex jurisdictions for financial compliance

Global ranking Jurisdiction Region 1 China APAC 2 Brazil Americas 3 Turkey EMEA 4 Italy EMEA 5 Argentina Americas 6 France EMEA 7 Bolivia Americas 8 Colombia Americas 9 Mexico Americas 10 Russia EMEA

The 10 least complex jurisdictions for financial compliance

Global ranking Jurisdiction Region 94 Cayman Islands Americas 93 BVI Americas 92 Jersey EMEA 91 Hong Kong APAC 90 Curacao Americas 89 Afghanistan APAC 88 Guyana Americas 87 Norway EMEA 86 Bangladesh APAC 85 Singapore APAC

Commenting on India’s ranking, TMF Group’s Head of India Shagun Kumar said: “This year India falls out of the notorious top 10 in the Financial Complexity Index – moving up three spots to 13. India’s drop in complexity is partly driven by the success of the Goods and Services Tax (GST) introduction in mid-2017, the Insolvency and Bankruptcy Code, and the Real Estate (Regulation and Development) Act."

Along with this legislation, the push for digital filing has unlocked productivity and enabled tighter implementation of laws with more severe penalties for offenders. The digital push helps simplify processes and encourages businesses to tap into India’s vast economic opportunity, but the pace of implementation continues to be slow due to the democratic and diverse structure of India.

While the GST implementation hasn’t removed all complexity in India, it is undoubtedly a significant step forward and has had a far-reaching impact on all aspects of business operations. It replaces a complex ecosystem of local, regional and national taxes that often artificially inflated the cost of goods and services in the country.

As for the Insolvency and Bankruptcy Code, it provides a simplified and more efficient process for companies to either wind up, set themselves on course for revival, or for investors to exit. It reduces the timeframe for insolvency and recovery proceedings to under one year.

Overall, many business processes have streamlined in India over the past year and we see the move to higher corporate governance being reflected in India’s 2018 Financial Complexity Index ranking.

When it comes to cross-border business success and navigating this complex environment, knowing and understanding the local requirements for financial compliance can prove vital. Seeking the support of in-country experts – such as TMF India – allows companies of all sizes to maintain focus on their core business.

Download the full report here.

About TMF Group

TMF Grouphelps its clients operate internationally and ‘belong’ wherever they are in the world. We do this by making sure they are properly set up to do business in any country and compliant with local and international regulations. Our work includes helping companies of all sizes with business services such as HR and payroll, accounting and tax, corporate secretarial, global governance and administration services for structured finance, private equity and real estate investments. We have more than 7,000 in-country experts in over 80 jurisdictions worldwide.

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