A discussion on the TMF Group’s Global Business Complexity Index with Adrian Owen

Adrian Owen
Managing Director-Mid Americas
TMF Group
adrian.owen@tmf-group.com


The Central American Group: Hello. Welcome to the most recent episode of the Central American Group podcast. In these recordings, we speak with individuals who have expertise in Central America and, often, the Latin American region as a whole. Today, we have with us Adrian Owen. Adrian is affiliated with the TMF Group, which publishes the Global Business Complexity Index (GBCI) annually. Welcome, Adrian. Would you please tell us a bit about yourself and the organization that you represent?

Adrian Owen: Yes. Good morning, Steve. Thanks very much for the opportunity today to talk about Central America. So, my name is Adrian Owen. I’m the managing director of a region we internally refer to as Mid-America, which encompasses Central America, the Dominican Republic, and Jamaica. The company I work for, TMF Group, is a leading provider of critical administrative services. We publish the Global Business Complexity Index each year and help clients invest and operate safely around the world. We have more than 12,000 colleagues in over 125 offices worldwide, and our locations span 92% of the world’s GDP and 95% of foreign direct investment inflows. We position ourselves, Steve, as a key part of our clients’ governance, providing the accounting, tax, payroll, fund administration, and legal entity management services essential to their success, particularly when they enter new jurisdictions.

We ensure rules are followed, reputation is protected, and operational compliance is maintained. We work with most Fortune Global 500, FTSE 100, and top 300 private equity firms. Concretely, in Mid-America, I’m based in Costa Rica and oversee operations in the eight countries I mentioned.

The Central American Group: Well, that’s very interesting, and it must be quite a challenge for you. One thing I’ve noticed appearing on the Internet, along with some related stories, is the TMF Global Business Complexity Index. First of all, could you tell us what it is, how it’s compiled, and what its ultimate purpose and importance are?

Adrian Owen: Yeah, sure, Steve. The Global Business Complexity Index (GBCI) is a key piece of research that helps those navigating rules and regulations cut through layers of complexity, enabling them to conduct business effectively and successfully across borders. It’s TMF Group’s flagship annual report. It provides a detailed analysis of the complexities associated with establishing, operating, and expanding businesses across multiple world regions. It includes a global ranking of 79 jurisdictions based on the complexity of their business environments. The GBCI is built, Steve, from over 290 data points that analyze complexity across three key areas, including rules, regulations, and penalties around business operations, accounting and tax, human resources, and payroll. The index ranks jurisdictions from most to least complex, identifying the root causes of complexity, including bureaucracy, frequent regulatory changes, and a lack of digital infrastructure. Beyond the rankings, the report offers valuable insights to customers on global trends affecting international business operations, including rising digitalization, shifts in tax policy, and changes in compliance obligations. For companies looking to expand into new markets, it’s an essential guide for assessing operational risk and planning effectively.

The Central American Group: Well, given that you look most specifically at your role in Central American countries, in recent years, what has been the trend in levels of complexity in that region compared to competitors that are located in Latin America as a whole?

Adrian Owen: Yes. I would say that Central American countries, Steve, have made remarkable progress in reducing business complexity, especially when compared to some of their Latin American neighbors. In the most recent edition of the Global Business Complexity Index 2024, countries such as Costa Rica, El Salvador, Honduras, and Nicaragua have emerged as some of the least complex jurisdictions in Latin America. Indeed, most Central American nations now fall into what I would say is medium to low complexity globally. One reason for this, I would say, is that they’re relatively straightforward human resource and payroll processes, which are easier to manage than in many other countries. Meanwhile, accounting, tax, and global entity management remain more intricate but are improving thanks to digitalization and regulatory reforms. Compared to other Latin American countries, some of which I see continue to struggle with bureaucratic inefficiencies and frequent legislative changes, Central America tends to stand out for its growing stability and business-friendly reforms. Even compared to some more developed markets, which tend to be less complex overall, these countries are proving competitive by offering simpler, faster administrative procedures in key areas.

The Central American Group: According to the Global Business Complexity Index, what factors have made Central American countries less complex over time?

Adrian Owen: I see several structural and policy-driven factors contributing to reducing complexity across the region, Steve. For example, the government has introduced targeted financial support in El Salvador, including tax incentives and infrastructure investments to support logistics and trade. The National Trade Facilitation Strategy aims to modernize and streamline customer procedures, demonstrating a clear commitment to easing international trade and responding to the demands of the global supply chain. Panama, for example, has eliminated the requirement for a municipal taxpayer number, simplifying tax returns for corporate income tax. This is an example of how small reforms can have a significant impact. In Guatemala, digital advancements in invoicing and the registration of employment contracts help simplify operations for foreign businesses seeking to establish a presence in the country. This significantly reduces complexity for all parties involved. Let’s not forget Nicaragua. Nicaragua’s free trade zones are another positive factor, particularly for manufacturing and mining companies, which helps attract investment. Overall, I would say that these efforts, combined, demonstrate a regional commitment to reducing administrative burdens and increasing transparency. These factors are crucial for enhancing investor confidence, streamlining operations, attracting new investment, and achieving a more competitive position on the Global Business Complexity Index.

The Central American Group: As you are aware, the Central American Group has operations in Costa Rica and El Salvador, where the company’s free zones are situated. What can you tell us about the ranking of both countries in the most recent complexity analysis? Can you provide us with some insight into the factors that influenced their scores?

Adrian Owen: Sure. First of all, it’s a privilege to collaborate with the Central American group. In 2024, the Global Business Complexity Index ranked Costa Rica 29th and El Salvador 30th among the 79 least complex jurisdictions. El Salvador’s lower and continually improving complexity score, I would say, reflects advancements in its human resources and payroll systems, a more stable regulatory environment, and a wave of digital innovation. The country has introduced online platforms for identity documents and commercial registration within 24 hours, as well as tools like MITui and Digigob to manage official processes. It also benefits from enhanced security and political cohesion, which have improved investor sentiment in the country. Costa Rica, similarly, stands out for its robust free trade zone regime, which has been attracting diverse financial and foreign investment for many years. As a member of the OECD, Costa Rica adheres to high standards of transparency and governance, which can be demanding to comply with but reassuring for international investors. Global entity management, the constitution, and annual legal compliance of companies is a bit of a mixed bag, to be honest, Steve. El Salvador has simplified many procedures.

It’s the centralization of authority, but potential geopolitical risk can create uncertainty. Costa Rica, on the other hand, is more decentralized and predictable in its processes.

The Central American Group: Some people find it surprising that, according to the Global Business Complexity Index, Central American countries are not more complex for new entrants than other destinations, such as those in Europe or Asia. What are some of the most complicated countries to deal with, and why are they ranked that way?

Adrian Owen: Well, it’s funny. It’s a common misconception that smaller or developing countries are automatically more complex. Some of the most complex jurisdictions in the Global Business Complexity Index are developed economies such as Mexico, China, and Greece. What drives complexity in these cases is usually a combination of frequent regulatory change and high levels of bureaucracy. In Greece, for example, localized processes and a heavy reliance on paper-based systems increased operational complexity. In Mexico, federal and state-level regulations can conflict or change quickly, creating what every business dislikes: uncertainty. China faces similar issues, especially regarding foreign investment approvals and constantly evolving data regulations. I would say that these examples, and I’d also include France in that, show that complexity is not always about infrastructure or wealth. It’s often about how regulations are updated, enforced, and how easily businesses can access the information and systems that need to stay compliant.

The Central American Group: When will the next TMF Global Business Complexity Index be released? And why does TMMF do this every year?

Adrian Owen: The 12th edition of the Global Business Complexity Index is set for release in the last week of May, early June this year. So, in a few weeks. We publish the report annually because global regulatory environments are constantly evolving. What was simple last year may become complex this year due to new tax laws, political shifts, or technological advancements. By closely tracking these changes annually through our experts in each country, we can provide businesses with a consistent, up-to-date resource they can rely on for international planning and risk assessment. But let’s also be clear here, it’s not just about the rankings. It’s also about helping organizations understand how and why jurisdictions are changing so they can prepare, adapt, and make informed strategic decisions.

The Central American Group: Once this comes out, how can listeners get access to it?

Adrian Owen: Sure. The full report will be available on our website, www.tmf-group.com. From there, the listeners can download complete GBI reports, explore interactive data visualizations, and find detailed country profiles.

The Central American Group: What can we expect from the perspective of the region’s business landscape in the coming years? What do you see happening?

Adrian Owen: So, what we’ve seen and continue to see, I’d say, is continued positive momentum in Central America. Despite the potential for regulatory changes, the business community remains optimistic about future investment. We anticipate further digitalization, streamlined registration processes, and enhanced clarity in tax and HR compliance. Countries in the region, I would say, are also likely to define their approaches to planning timelines, penalties, and technology use to enhance administrative efficiency. Challenges remain, of course, Steve, such as labor market volatility, geopolitical risk, and tariffs. Central America’s trajectory indicates a shift towards greater international competitiveness, enhanced investor confidence, and a supportive environment for foreign businesses, particularly in the technology, tourism, and manufacturing sectors.

The Central American Group: It’s been an interesting discussion about your company and the TMF Global Complexity Index. One frequent occurrence is that after listening to these podcasts, individuals have questions. We aim to provide a means by which individuals with questions can directly contact our guests. Adrian, is there a way that listeners with questions can get in contact with you?

Adrian Owen: Absolutely. And I would love the opportunity to engage with your listeners, Steve. I’ll make my email and phone number available. My email is adrian.owen@tmf-group.com, and my telephone number is +506 6026-4124.

We’ll have all that information in the transcript section of the podcast page. Additionally, Adrian, do you have a LinkedIn profile that we can share with you? Yes, of course.

Adrian Owen: Yes, feel free. I can provide that to you after this recording, Steve.

 The Central American Group: This has been a very educational half hour or so. Thank you for making yourself available to speak on these issues. I wish you great luck, both personally and for TMF Global, in the years to come.

Adrian Owen: Thanks very much, Steve, it’s been a privilege.

The Central American Group: Thank you. Have a great day.

Adrian Owen: Thank you. Goodbye.