Argentina is in the top ten of the most complicated countries in the world to do business due to the ban on layoffs, inflation and currency controls

Argentina was once again among the ten countries with the greatest complications in doing business, according to a private survey. This year he finished in seventh place among the nations with the biggest barriers, behind others like Brazil, France and Mexico. Regardless, it has improved compared to 2020, when it was in third place in this ranking.

The report, called Global Business Complexity Index and which is carried out annually by TMF Group, analyzes key areas of business administration and compliance in 77 jurisdictions, the time it takes to start a business, to changes in tax laws, pay and benefits policies, and difficulties opening a bank account.

In total, according to TMF Group, in this year’s ranking, 290 criteria were taken into account to prepare the ranking. “Brazil has ranked as the most complex jurisdiction for businesses and at the top of a list of six Latin American countries in the top ten positions”The report mentioned.

This year Argentina finished in seventh place among the nations with the biggest barriers, behind others like Brazil, France and Mexico. Last year, he occupied third place in this ranking.

Among the countries of the region, Mexico, Colombia, Argentina, Bolivia and Costa Rica they occupied positions 3, 4, 7, 8 and 9 respectively. “The constantly evolving legislation and the multiple levels of government agencies to be managed contribute to the complexity of the region”, explained the organizers of the index.

“Other reasons for this positioning are linked to the number of organizations that must be notified when setting up a business. In South America, for example, about four to five agencies need to be notified, while in other regions, such as North America and the EMEA (Europe, Middle East and Africa), between two and three organizations must be notified ”, continues the annual report.

On the other hand, the report analyzed that “Another factor is the region’s preference for face-to-face procedures with tax authorities and other bodies, as the global trend is towards digitization. Consequently, companies investing in the region face longer delays than usual in setting up local entities, opening bank accounts or validating relevant documentation ”.

Stock and layoff ban: why Argentina remains in the top 10

Among the considerations specific to Argentina, the TMF Group report explained that “The main factors of complexity in Argentina are the constant legislative changes, the difficulty of sending and receiving foreign currencies and the high levels of inflation.», The analysis has started.

“In December 2019, the president Alberto Fernandez was elected. From that moment there was a series of rapid and sometimes unpredictable legislative changes. One of these changes, made in response to the covid-19 pandemic, is the inability to fire low performing employees, which means Argentines have had full job security during the pandemicThe report continued.

“However, this adds significant complexity for businesses operating in the jurisdiction, as employees must leave the company voluntarily, otherwise the company may face heavy penalties», Assured the TMF Group.

“This means that during the period of economic uncertainty following the pandemic, Argentinian workers have enjoyed full job security, regardless of their individual performance or the performance of their company,” organizers said. of the annual index.

The factors that explained the complexity of doing business in Argentina according to TMF Group were “constant legislative changes, the difficulty of sending and receiving foreign currencies and the high levels of inflation”.

“While this is clearly an outlier due to the pandemic, our experts predict that employers will continue to see increased legislation in favor of employees, which both encourages companies to act responsibly in their local communities and increases the level of complexity they face, ”they said.

Currency restrictions were also among the criteria taken into account by the index to place Argentina among the ten most complicated countries to do business. “For those who operate in Argentina, it can be difficult to send and receive money to or from abroad, because there are regulations which considerably limit the international transfer of money, ”analyzes the report.

“Any money that can be transferred, for example, to pay import invoices, requires rigorous documentation, which adds great complexity to foreign companies that want to set up and operate there, ”they concluded on this subject.

Finally, they asserted that Argentina “it also has inflation problems, the current rate of which exceeds 50 percent. This is a significant risk factor that causes uncertainty for foreign companies planning to establish and operate in the country ”.

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