Dive Brief:

• Singapore offers multinational companies the best combination of speed and expense in meeting corporate compliance requirements, followed by the U.K. and Australia, according to a ranking of mandated secretarial tasks. Conversely, Brazil, Indonesia and the United Arab Emirates were listed as the most complex and costly this year in the Mercator Entity Management Report.
• Average compliance cost rose 3% from 2023, according to the report released Tuesday. The time required to complete compliance tasks rose 48% from last year, driven largely by a disparity in technology adoption. Complex corporate transactions in the U.S. and Canada, along with new ultimate beneficial owner (UBO) regulations in both countries, added to the time duration, according to the report.
• Mercator’s assessment of 180 jurisdictions and 20 secretarial tasks is viewed as a benchmark for general counsel and other executives about how business-friendly a jurisdiction is. The report factors costs and time to completion as the primary metrics.

Dive Insight:

North America was ranked the least expensive region for compliance. The most expensive regions were the Middle East and Africa, followed by Latin America. The report cites uneven digitization, frequent regulatory changes and inconsistent enforcement as the main reasons for higher expenses in these regions.

The increased time for compliance tasks in 2024 coincided with new UBO reporting requirements in more than 100 countries, plus stricter enforcement of these measures — particularly in the U.S. and Canada — according to the report. Regulators are pressing for more accurate and timely disclosures about corporate owners.

Complex corporate transactions by U.S. and Canadian companies this year were responsible for North America dropping from first to fourth place from 2023 in terms of time needed to complete compliance tasks, Mercator said. This prolonged period reflects “a more dynamic and strategic business environment” in North America, according to the report.

Many nations are also increasing their reporting mandates for companies’ environmental, social and governance responsibilities. These rules increase the focus on data tracking, transparency and reporting practices, Mercator said.

In terms of regions, Asia varies widely in digitization and reporting ease. While Singapore and Australia have streamlined their reporting systems with efficient digital platforms, other nations such as China and Indonesia rely on complex, paper-based systems that can increase costs and completion times.

“Digital tools can transform compliance management, reducing inefficiencies and enabling faster, more accurate decision making,” the head of Mercator by Citco, Kariem Abdellatif, wrote in the report. “However, this brings new challenges in data security and managing sensitive information across global networks.”

The average reporting activity per entity ranges widely across the world, from 19 tasks per entity in Barbados to a global average of 4.2, according to the report.

For cost, Malaysia was the cheapest jurisdiction for compliance, followed by Sri Lanka and Bangladesh. The U.S. ranked 20th, 61% more expensive than Malaysia. Qatar, South Korea and Oman were the most expensive jurisdictions.

For speed, Gibraltar was the fastest jurisdiction in 2024, followed by Luxembourg and Bermuda. Bangladesh, Venezuela and Ghana ranked as slowest.