Vistra Friction Index: Red Tape Twice as Complex as Tax for Latin American Business

Regulatory complexity has emerged as the primary obstacle for businesses expanding across Latin America, significantly outweighing tax and accounting burdens. For fintechs and multinational firms, navigating these administrative hurdles is critical as major markets like Brazil and Mexico prepare for sweeping structural reforms that will redefine regional compliance requirements through 2030.

What was announced

The Vistra Friction Index: Americas, produced in collaboration with Euromonitor International, reveals that regulatory and entity management friction in Latin America averages 61 out of 100 across eight studied markets. In contrast, accounting and tax requirements in the same regions score significantly lower at 26. This disparity suggests that while digital tax reporting and electronic invoicing have advanced, businesses still struggle with regulatory uncertainty and inconsistent administrative demands.

The research highlights specific geographic challenges. Ecuador recorded the highest overall operational friction at 59.3, while Chile stood out as the region's most accessible market, combining a high investment attractiveness score of 56.8 with a low operational friction score of 23.5. Mexico presents a contradictory environment, holding the third-highest regulatory friction score at 69.3 despite having the lowest accounting and tax friction at just 4.4. In North America, the friction profile shifts; the United States has the lowest regulatory friction at 7.2 but the second-highest HR and payroll friction at 48.0, driven by immigration requirements and high labor costs.

Looking toward the end of the decade, the report identifies several looming reforms. Brazil is currently transitioning to a dual VAT system, which will necessitate significant changes to invoicing and tax compliance. Mexico is planning a phased reduction of the working week from 48 to 40 hours, while Colombia and Argentina are moving forward with labor modernization and the easing of exchange controls. While these reforms may eventually simplify operations, they are expected to increase short-term complexity as companies adapt their internal systems.

"Latin America offers enormous opportunities for international businesses, but regulatory complexity varies hugely from market to market. Chile scores just 30 out of 100 for regulatory friction, while Ecuador tops 59. Businesses that understand these differences early can move faster and avoid costly surprises."

Raimundo Diaz, President, Vistra Global Solutions Americas

The companies involved

Vistra is a global professional services provider that assists corporations and funds in managing the complexities of international expansion and compliance. The company is owned by EQT Group, a prominent global investment organization. Vistra provides a suite of services including entity management, corporate secretarial support, and fund administration. In recent years, the firm has focused heavily on the Latin American corridor, positioning itself as a specialist for firms navigating the diverse legal and financial landscapes of the region.

Euromonitor International, the partner for this research, is a global market research company providing strategic intelligence on industries, economies, and consumers. By combining Vistra’s operational data with Euromonitor’s market analysis, the index provides a benchmark for how "friction"—defined by administrative and regulatory hurdles—impacts the ease of doing business. This data is increasingly vital for fintech entities and multinational corporations that must weigh the potential of high-growth markets against the cost of compliance and entity maintenance.

What FF News has reported before

FF News has followed Vistra’s strategic growth in the Americas, particularly its efforts to scale its regional expertise. In June 2026, we reported that Vistra Launches Dedicated Latam Unit Following Biz Latin Hub Acquisition, a move that significantly bolstered its local presence. This followed the appointment of Raimundo Diaz as Executive Vice President, Americas to lead corporate services growth across the region.

The company has also been active in modernizing its technological offerings, as seen when Vistra Fund Solutions Expands Yardi Platform to Modernize Real Estate Debt Administration. Additionally, Vistra’s research has previously highlighted global compliance readiness gaps, such as when it found that Just 9% of Multinationals Ready for UK Companies House ID Verification Deadline, illustrating a recurring theme of businesses struggling to keep pace with evolving regulatory requirements.

What this means

The findings indicate that the "digitization" of finance in Latin America has not yet solved the problem of administrative friction. While many regional governments have successfully implemented digital tax systems to improve collection, the underlying corporate and regulatory frameworks remain cumbersome. This creates a significant barrier for fintechs that rely on speed and agility. The upcoming VAT overhaul in Brazil and labor changes in Mexico will likely create a "compliance crunch," where the cost of operation rises as firms retool their systems. For the broader industry, this environment underscores that market entry in LatAm requires more than just a digital product; it requires a robust, localized strategy to handle legacy bureaucracy that technology has yet to fully automate.