Choosing a jurisdiction for international business is not just about taxes. It is also about security, transparency, and your company’s reputation.

One of the key reference points is a country’s status under FATF (Financial Action Task Force) standards-an organization that combats money laundering and terrorist financing. However, not all jurisdictions on FATF lists carry the same level of risk.

FATF divides countries into two groups:

• FATF Blacklist - a “no-go zone” if you value your company’s reputation. These are countries where anti-money laundering systems are either ineffective or practically non-existent.

If you are doing business with North Korea, Iran, or Myanmar, don’t be surprised if a bank refuses to open an account for your business with no right to appeal. These jurisdictions pose significant systemic risks, where even basic financial flow verification is impossible or not properly conducted.

• FATF Grey List - jurisdictions under increased monitoring.

In 2026, special attention should be paid to countries on the “grey list,” officially referred to as Jurisdictions under Increased Monitoring..

This is not a blacklist, and these countries are not permanently “unsafe.” Rather, they have gaps in their AML/CFT (anti-money laundering / counter-terrorist financing) systems but are cooperating with FATF and working to improve. This status is temporary, and there are many successful examples of countries exiting the list.

What do countries do to exit the grey list?

One of FATF’s core principles is to encourage real reform, not just impose penalties.

Countries on the grey list follow an agreed action plan: closing legislative gaps, strengthening supervision, improving cooperation between authorities, and delivering measurable results.

Several recent 2025 cases illustrate this:

1. Croatia (2023–2025)

Croatia was added to the grey list in June 2023 due to shortcomings in AML/CFT effectiveness, particularly in supervision and enforcement. Over two years, the country implemented its FATF action plan: strengthening financial sector oversight, improving monitoring mechanisms, and critically demonstrating real enforcement results in financial crime investigations.

In June 2025, FATF officially confirmed that Croatia had met all requirements and was removed from increased monitoring.

2. Mali (2021–2025)

Mali remained on the grey list longer, from October 2021. Key challenges included weak AML/CFT implementation and limited effectiveness in combating financial crime. Reforms focused on enhancing financial monitoring, improving inter-agency coordination, and intensifying investigations.

In 2025, FATF recognized sufficient progress and removed the country from the list.

3. Tanzania (2022–2025)

Tanzania was grey-listed in October 2022 due to strategic deficiencies in financial controls. The country focused on legislative reforms, stronger regulatory supervision, and improved law enforcement performance.

In less than three years, FATF confirmed in 2025 that these measures were effective, and Tanzania was delisted.

These examples show that exiting the grey list is achievable-and brings tangible benefits: restored trust from international banks, increased foreign direct investment, and fewer financial barriers for businesses.

Top 3 popular jurisdictions currently on the FATF grey list:

1. Bulgaria - an EU hub under scrutiny

Bulgaria attracts businesses due to its tax advantages and EU location. However, FATF highlights deficiencies in financial flow control and transparency of company ownership.

This means financial institutions require more proof of transparency, and investors assess risks more carefully.

Bulgaria is already implementing reforms, strengthening beneficial ownership requirements and enhancing cooperation with international authorities.

2. British Virgin Islands - a classic structuring hub under review

The BVI remains a popular choice for international corporate structuring. FATF points to insufficient transparency in trust structures and company registries, leading to its grey list status.

Businesses should be prepared to provide more evidence of ultimate beneficial ownership, and investors are becoming more cautious. Still, operations remain viable if compliance and transparency standards are properly met.

3. Monaco - financial attractiveness with increased oversight

Monaco is a traditional financial center with a high concentration of capital. FATF has noted the need for improved monitoring of financial flows and ownership disclosure for funds and companies.

Banks already apply enhanced due diligence, and investors demand higher transparency.

At the same time, the jurisdiction is actively strengthening judicial and regulatory frameworks, expanding financial intelligence capabilities, and increasing enforcement efforts as part of its FATF roadmap.

Today, choosing a jurisdiction is no longer about where it is cheapest or easiest to incorporate a company.

The key question in 2026 is whether your business will function smoothly: open a bank account, pass compliance checks, attract investors, and avoid future issues.

FATF standards have effectively set the rules of the game. While some things could be overlooked in the past, banks and partners now look much deeper-at structure, transparency, and the jurisdiction itself.

The blacklist is an obvious stop sign.

The grey list, however, is not a prohibition-it’s a signal to proceed with caution and understand exactly who and what you are dealing with.

The main criterion in 2026 is whether a jurisdiction creates unnecessary risks for your banking, payments, and partnerships. Increasingly, this determines whether your business can successfully scale in the chosen jurisdiction.