India remains among the most complex for business: report  

July 10, 2020 4:56 pm

India is the 18th most complex country for multinationals to do business in globally, and the seventh most complex in Asia, according to a new report by professional services firm TMF Group. The findings are particularly significant as the report also reveal that India is one of the countries most focused on attracting international investment.

The Global Business Complexity Index analyses key areas of business administration and compliance across 77 jurisdictions – from the time it takes to incorporate, to changes in tax legislation, to policies around wages and benefits, through to the challenges of opening a bank account. In all over 250 different criteria are factored into this year’s rankings.

It found that in Asia, only Indonesia, China, Malaysia, Turkey, Taiwan and Korea represented a larger challenge for multinational firms looking to establish and operate local businesses.

One of the reasons highlighted as a factor in India’s complexity ranking is that it does not align with some of the key international standards for legislation and practices – a verdict that was true of just 18 percent of jurisdictions. For example, it is one of 16 percent of jurisdictions that does not comply with the International Financial Reporting Standards, a common set of rules and regulations around financial statements that are readily understandable to businesses operating globally.

Likewise, the report concluded that in India, tradition is often valued over more modern practices, adding a localised barrier that international businesses need to navigate. For example, official legal entity documents require an official stamp, chop or seal to be legally effective – India being one of 43 percent of jurisdictions where this is required.

But, it is clear that India is on a mission to address some of those challenges. The analysis shows it is among the countries seen as ‘forward looking’ (57 percent) and among the jurisdictions (23 percent) making the most ‘concerted effort’ in terms attracting foreign direct investment.