Asia IP

Hong Kong has fallen 12 places in the TMF Group Complexity Index – from 68th in 2013 to 80 in 2014 – indicating that the city’s business environment is becoming signiicantly less complicated. This is also supported by foreign direct investment (FDI), as Hong Kong continues to be the secondlargest recipient of FDI in Asia after Mainland China.

The annual study by TMF Group, a provider of global business and compliance services, has ranked 81 jurisdictions across Europe, the Middle East, Africa, Asia-Paciic and the Americas according to how complex they are to do business in from a regulatory and compliance perspective.

TMF Group’s indings suggest that the improvement in Hong Kong’s business environment is due largely to the enactment of the Hong Kong Companies Ordinance on March 3, 2014. The ordinance implements sweeping changes to the corporate environment in Hong Kong and has simpliied and streamlined the legal framework which regulates the formation and operation of companies in Hong Kong, including overseas companies operating in the jurisdiction.

The adoption of this legislation – one of the largest pieces in the country – was an important milestone in the development of company law in Hong Kong and the positive impact it has had on the business community is highlighted in the TMF Group rankings.

“While Hong Kong has long offered an attractive commercial environment for foreign businesses seeking to invest in the Asian region, the adoption of the Companies Ordinance in March last year has signiicantly enhanced corporate governance, reduced regulatory hurdles and facilitated the growth of commerce,” says Paolo Tavolato, head of Asia Paciic at TMF Group.

Argentina (1st), Brazil (2nd) and Bolivia (3rd) are ranked as the most complex countries in which to do business. Also in the top 10 were the United Arab Emirates (4th) and the emerging economies of Korea (5th), Indonesia (9th) and Thailand (10th).

Poland (7th) is the only European country to feature in the top 20 despite signiicant reform, thanks in part to systems and laws inherited from the former Soviet Union.

Joining Hong Kong among the least-complex countries were Ireland (79th) and Jersey (81st). Australia ranked 76th, New Zealand 72nd, Singapore 59th, India 44th, Russia 26th, Kazakhstan 24th, Taiwan 22nd, Malaysia 15th, Vietnam 14th, the Philippines 13th, China 12th and Japan 11th.