Wednesday 8 September 2021 11:37 am

Exclusive: UK named world's third best regulatory base, ahead of US and EU

The UK is the world’s third best jurisdiction for multinational companies to base subsidiaries or ‘entities’ from a governance and regulatory standpoint, according to new research shared exclusively with City A.M. this morning.

Singapore takes the top spot, followed by Australia while Kazakhstan came out as the most complex country out of over 160 jurisdictions that were ranked on both the cost and speed of doing business. APAC came out as the best region overall.

Singapore, Australia as well as the UK have “the ideal combination of low cost levels and shorter timeframes for completing a range of regulatory activities” such as board of director or shareholder decisions, officer changes and Power of Attorney activities, according to the Mercator Entity Management Report 2021.

Kazakhstan, South Korea and Indonesia the worst

After Kazakhstan, South Korea was the next lowest, followed by Indonesia: all have a combination of relatively higher cost levels, and less competitive timeframes or ‘duration’, the researchers said.

“Singapore, Australia and the United Kingdom are all global financial centres with a long-established history of managing international trade, and this translates into the ease with which multinationals can manage entities in these locations,” commented Kariem Abdellatif, head of Mercator.

“Interestingly, Singapore’s is often cited for its government’s efforts in working with businesses and industry partners to step up their resilience during the Covid-19 pandemic and this is no doubt reflected in its ranking,” he told City A.M. this morning.

The Mercator Entity Management Report 2021 looked at the challenges that business leaders, general counsels and corporate secretarial teams face in countries where multinationals with global portfolios have their entities.

The researchers studied the busiest regions in terms of regulatory activity, the average cost of regulating entities in each jurisdiction and the overall time taken to complete activities down to the number of hours it takes for regulatory filings.

Europe, the Middle East and North America

The report showed that while Europe has the highest number of entities overall – based on client portfolios – activity per entity is comparable to the Middle East and North America.

Europe is followed by APAC, which has half as many entities based there, but these have an overall activity rate of almost two-thirds that of European levels. APAC was also the top region overall on cost and duration, Abdellatif explained.

The cost of operating in different regions is affected by factors including the complexity of local legislation and the language requirements for filings.

For example, relatively high prices in the LATAM region are influenced by higher local professional costs due to complex procedures and requirements for documents to be in the local language. Subsequently, translations and legalizations for bilingual documents need to be arranged.