Here's Where Brazil &amp; Argentina Are The Same, And It's Nothing To Brag About

Brazil and Argentina, long rivals on the soccer field, are now ranked No. 1 and No. 2 most complicated places in the world to do business. They're neck and neck yet again!

As they say in Brazil, "parabens."

London based regulatory services firm, TMF Group, said Friday that the neighboring South American economies are the worst out of 81 countries ranked from a regulatory and compliance basis.

This marks the second year in a row that Argentina takes the prize as the most difficult place to do business.  But Brazil really went the extra mile in order to catch up. To get to the number two slot, Brazil had to suddenly become worse than 15 other countries from last year’s ranking. They beat out Bolivia this year. Bolivia is now in the third hole.

Half of the top 20 countries listed on the TMF Group's Global Benchmark Complexity Index’s are from Latin America.

TMF Group ranked Brazil one of the most complicated places in the world to do business, rising 15 points to replace Bolivia at No. 2. Argentina is still No. 1.


“Brazil has been one of the most exciting growth stories of the past decade, and the football World Cup and upcoming Olympics will only strengthen the country’s position on the map as a prominent global investment destination,” Ricardo Aquino, Managing Director of TMF Group Brazil, said in a press release.  “Reforms of its laws and regulations for opening and running a business have not adapted at the rate with which the economy has grown, presenting many hurdles to overseas corporations.”

See: Most Restrictive Countries For Business -- Infographic

In Brazil, a highly regulated environment and government bureaucracy make it harder for companies, especially foreign ones, to understand the rules. Setting up shop in Brazil can take over four months, with construction permits averaging 469 days.

Argentina, meanwhile has closed itself off from the major U.S. multinationals that have a long history of investing in the country.  In 2011, the government restricted the flows of dollars into the country, leading to a massive black market, and making it next to impossible for multinationals to repatriate dollars.  Customs duties squeezed margins on importers, pulling some of them out of the market.

"Argentina is in the process of change. We have suffered bad economic policies," Carlos Pirovano, sub-secretary for investment in the City of Buenos Aires, told FORBES recently. "Next year we will have elections and everyone in Argentina agrees that it's time for a change. We have to be more open to the market. We want to be more open to foreign investment next year," he said.

It's not that Argentina is entirely walled off from the world. China's Industrial and Commercial Bank has been investing in creating a presence in Buenos Airies, and Malaysian oil giant Petronas recently committed to a $550 million investment with Argentina's state run oil company YPF to develop shale gas in the south.

Still, if there is one thing Brazilians hate to be compared to, it is Argentina. To come in a close second to a nation that defaults on its debt once every 10 years is a bit of an embarrassment, though maybe not as much to losing to the German's in the FIFA World Cup. Then again, so long as Argentina lost to them too, all is well.

The two sad-sack South American economies are going through some clear growing pains.

TMF Group said Brazil might be on the right track, though.  This month, the government passed a tax law TMF calls "one of the broadest and deepest reforms of the country’s corporate income tax system in 30 years."

The Leaderboard

10. Thailand

9. Indonsia

8. Paraguay

7. Poland

6. Mexico

5. Korea

4. United Arab Emirates

3. Bolivia

2. Brazil

1. Argentina
