Expanding isn’t just about understanding legal and technical requirements for forming a company; you must be attentive to cultural differences driving your new partners and customers to guarantee commercial success in Latin America. As connections to the region are increasing, we offer guidance on some key cultural aspects to be aware of in general when doing business in the region. Biz Latin Hub knows all about commercial success in Latin America and we can help you achieve the same results across the area via our network of dedicated local offices. This guide provides eight essential rules to help foreign professionals understand the cultural nuances of the region and build successful, long-lasting business relationships.
Key takeaways on business etiquette in Latin America
| Do you need to build relationships in Latin America? | A great deal of importance is placed on building personal relationships and knowing who you are doing business with. |
| How important is punctuality in Latin America? | Punctuality expectations can vary across the region. Understanding the local concept of time is crucial. |
| What style of negotiation is best to use? | Be prepared to negotiate and commercial success in Latin America requires patience when doing so. |
| Do you need to use the local language? | Clear communication in English as well as the local language will help both with business matters and with building those personal relationships. |
| Be respectful | Many Latin American countries suffer a great deal of prejudice and all are fiercely proud of their country. Take the time to learn a little about the country and region and avoid making criticisms. |
| How formal is Latin America? | Err on the side of caution, both in language and dress. Honorifics are frequently used and business attire is expected. |
| How should you dress for a business meeting? | Formal, as noted above. |
Key Cultural Norms in Latin American Business
While Latin America is a diverse region, several cultural themes are common across many countries. Business is often relationship-driven, communication can be indirect, and social customs play a significant role in professional interactions.
1. Prioritize Personal Relationships (Personalismo)
Focus on building trust and personal connections before discussing business matters. In other business environments, compelling pitches, major investments, and comprehensive strategies win over peers and partners in the workplace. In Latin America, businesses must make relationship building their utmost priority.
Foreign businesspeople must be aware that business isn’t conducted in the same impersonal manner here in Latin America. Where they are used to focusing on deliverables, Latin businesses place a greater value on working relationships.
A client or business partner won’t sign with someone they don’t feel they can trust. Building rapport and establishing close ties with stakeholders and prospective investors shows you care about their opinion. Openness shows your willingness to align with their values and strategic direction.
Expert Tip: The Importance of Small Talk
From our experience, the single biggest mistake foreign professionals make is trying to “get straight down to business.” In Latin America, the meeting before the meeting is often the most important part. Always be prepared to engage in small talk at the beginning of any interaction.
Ask about your counterpart’s family, their recent travels, or the local football team. This is not wasted time; it is the essential process of building trust and rapport (confianza). Business negotiations will only begin once a comfortable personal connection has been established.
2. Understand the Concept of Time
Be punctual yourself, but be patient and flexible, as meetings may not start or end on time. In some English-speaking countries, if you’re right on time to a meeting, you’re almost late. In Latin America, that’s just as true in professional contexts. While casual appointments might be more flexible and fluid with timings, that’s very much not the case with commerce.
Some observers note that this expectation is especially marked for foreign businesspeople; you may not get away with showing up late to a meeting, if you’re the one pitching the idea or courting a new client.
Prepare to take time in negotiating deals with your Latin American counterparts. As mentioned above, if you’re pursuing a new working relationship or partnership, it’s normal to meet over a meal and take your time getting to know your counterparts and clients.
3. Embrace Face-to-Face Communication
Whenever possible, choose in-person meetings over emails or calls to build stronger relationships. If your traditional greeting is a handshake, you’ll need to adjust to a more tactile connection when meeting people. In business and social environments, it’s normal for men and women alike to greet with a hug and/or air kiss.
Failing to greet with warmth can be interpreted as standoffishness or disinterest. Being aware of the differences in the way people treat personal space in this manner is important to moving ahead on the right foot when meeting new people. The personal ‘bubble’ is less defined than in other countries, so be aware that backing away from someone who stands near could be considered rude.
Compared to some English-speaking countries, Latin American workplaces are more status conscious. Take care in acknowledging someone’s title or role. People can often address people by their title in the workplace. Show your respect for people’s positions and level of authority. Show respect for seniority and titles. Decisions are typically made by the most senior person in the room.
In turn, expect to receive greetings of the same nature – this can be especially surprising for people accustomed to addressing others on first name basis in the workplace. Gauge receptiveness to that kind of interaction carefully; you may be disrespecting someone by bypassing formal acknowledgment of their standing in the company.
5. Dress Formally and Professionally
A conservative business suit is the standard. Your appearance reflects your professionalism and respect.
Dress formally for work in Latin America and for business meetings. ‘Smart casual’ won’t make the cut in many work situations. Looking the part shows that you’re committed to making a good impression and representing yourself and your business partners. Formal business attire also encourages the perception of authority; dressing too casually might lead your counterparts to believe you have no decision-making ability in your role.
Unless you’ve been told otherwise, expect to dress in professional, modern business attire. Men – make sure to put on a tie.
6. Be Patient with Bureaucracy
Business and government processes can be slow. Patience and persistence are key virtues.
7. Be Prepared for Flexible Schedules
Meeting agendas are often a loose guide rather than a strict schedule. Be prepared for conversations to flow organically. Business meetings often mix the personal with the professional in Latin America. Meetings may spill into overtime by up to an hour; small talk and casual conversation is important to keep things light and engaging. Launching straight into talking shop sends the wrong signals, and really makes ‘work’ of meetings. It’s not uncommon to meet over lunch for a couple of hours. Remember, warm working relationships sit at the core of business success in Latin America.
Negotiations won’t necessarily close quickly or stick to schedule. Latin Americans may approach things in a more indirect way than some Western business climates. There’s an expectation that negotiations should be done face-to-face, instead of over the phone. This means that you’ll have to factor in a longer stay in the country as opposed to a few nights. Deadlines aren’t rigid in meetings or negotiations, so budget your time accordingly and be patient.
Accepting invitations to lunch, dinner, or coffee is an essential part of the relationship-building process.
Personal boundaries aren’t as rigid in Latin American business culture as they are in much of the English-speaking world. Latin Americans are warm and friendly, including in work environments. This can be quite a change to Western compartmentalization of individuals’ work and personal lives.
Be prepared to receive inquiries about your health, family, and other relationships. Opening up about who you are as a person enables quicker relationship-building. Build trust with your co-workers and business partners by sharing deeper conversation topics than the weather.
FAQs on business etiquette in Latin America
These are some of the most common questions we receive from international investors interested in business etiquette in Latin America.
1. Can a foreigner own a business in Latin America?
Yes, in all jurisdictions we operate in a business can be 100% foreign-owned by either legal persons (legal entities) or natural persons (individuals).
2. Why do business in Latin America?
Latin America and the Caribbean is quickly becoming the region to watch in terms of steady economic growth, and increasing market attractiveness. Many foreign businesses and investors are snapping up opportunities to access immense populations and bring innovation to the region. However, commercial success in Latin America doesn’t come easily.
3. How long does it take to register a company in Latin America?
It takes two to 16 weeks to register and set up an operating company in Latin America, contingent upon the timely submission of all necessary documents and the sector/country you are in.
4. What does an S.R.L company name mean in Latin America?
This is similar to an LLC in other jurisdictions, usually with anything between 1 to 50 shareholders. The company name must illustrate the goods or services it provides or include the name of one or more partners. Personal liability is tied either to the value of shares held or to capital investment.
5. What does an S.A. company name mean in Latin America?
A public limited company (often called a Sociedad Anónima or S.A.) is another option for company formation in Latin America. Each shareholder is liable to the extent of their capital contribution.
6. What is the best entity type in Latin America?
We usually recommend Simplified Share Companies where they exist, but this does vary slightly depending on a variety of factors, such as the country, industry and size of company.
7. Is it okay to be late for a meeting?
While attitudes towards punctuality vary, as a foreign professional, you should always aim to be on time. However, be prepared for your local counterparts to be 15-30 minutes late, and do not show impatience as this can be seen as rude.
8. What is “personalismo”?
“Personalismo” is a cultural concept that emphasizes the importance of personal relationships and trust over formal rules or contracts. Business is done with people you know and trust, not with faceless companies.
9. How important is appearance?
Appearance is very important. The standard for business attire is formal and conservative. A well-tailored suit for men and a smart dress or suit for women is expected, as it conveys professionalism and respect.
10. Is English widely spoken in business?
In major international business circles in large cities, English is often spoken. However, making an effort to speak at least a few phrases in Spanish (or Portuguese in Brazil) is highly appreciated and shows respect for the local culture.
Find commercial success in Latin America with Biz Latin Hub
When operating in new countries, having a trusted local partner will support your growth. We can help you find commercial success in Latin America through in-depth knowledge of technical and cultural expectations.
At Biz Latin Hub, we offer a range of back-office services designed to help you understand the local market and to navigate its complexities, ensuring a successful international expansion.
To find out more about how we can help, contact us now and we’ll get back to you with a personalized strategy unique to your business and your Latin American expansion goals.
