Latin America (or, LATAM) has in recent years become increasingly democratized and, as a result, increasingly business-friendly. Economic growth—however rapid or slowly-but-surely— has been a major contributing factor to growing international interests in the region; it has helped put many LATAM countries on the radars of expanding organizations, with a growing number making the move into the region. Many LATAM countries’ diverse populations offer well-educated and cost-effective labor pools that may not be available in some European and North American markets. Likewise, the plethora of natural resources in these countries—not to mention their beautiful topographies—offers attractive opportunities for the right type of expansion.
Unique expansion opportunities are becoming more common in LATAM. People from all over the world visit Latin America each year, acting as an all-but-guaranteed source of economic growth for local communities and the organizations that operate within them. Import and exports investment, too, is also critical; negotiations are currently taking place for an EU-MERCOSUR agreement that will open up even more trading opportunities in the future. And recently revised investor protections in Peru may also entice foreign investors, as evidenced by the fact that total investment in Latin America is having an increasingly significant impact on Peru’s GDP each year.
But for as positive as these changes are, none make successful expansion into LATAM a “slam dunk.” But working with the right International PEO (Professional Employer Organization) helps ensure organizations are able to pursue expansion opportunities with the expert assistance needed to do so.
LATAM Expansion through PEO – Quick LATAM Market Entry…
Political and economic changes in certain LATAM countries can be difficult for organizations to navigate on their own, which is why working with an experienced International PEO is always recommended. For example, Argentina’s inflation has not only remained high but has actually accelerated in recent months. Likewise, consumer prices rose 34.4% in the last year alone. At the same time, the peso closed at a record low of 39.55 per dollar. This is in contrast to other LATAM countries; Peru has over the last decade had one of the region’s fastest-growing economies.
All of this means that opportunities can appear quickly—and disappear just as fast. Because of these short windows, organizations benefit from being in a position to capitalize on opportunities not next week, not tomorrow, but today. While setting up an entity has numerous benefits, it takes up valuable time and resources. Conversely, an International PEO can have businesses up and running in their desired LATAM country in as little as 48 hours.
…and Quick Market Exit
Because political and economic conditions can change quickly, businesses benefit from having an exit strategy—something that is just as important as an entry strategy. With the right International PEO, a flexible, agile approach means organizations can get out of their LATAM country quickly, compliantly, and more cost-effectively than if they had set up an entity in that country. Exiting with an International PEO means organizations will have zero leftover costs and liabilities once they’ve left the country. Dissolving an entity, on the other hand, can not only cost up to three times the initial investment but can also take months or even years to successfully complete.
Streamlining HR Processes and Cultural Considerations
An International PEO helps ensure organizations are in line with all rules and regulations to which they must adhere by becoming their Employer of Record (EOR). It benefits HR professionals by handling not only payroll, benefits, and compliance, but also sourcing, recruiting, and hiring the right talent to carry out expansion efforts. Even compliant terminations can be taken care of, should they be necessary. Beyond streamlining the hiring process, an International PEO can provide in-country support by helping businesses gain a critical and nuanced cultural understanding of their new country.
Your One-Stop Expansion Shop
In short, an International PEO offers a wide range of global expansion services, allowing organizations to break into new markets without worrying about in-country compliance. An International PEO provides support throughout each step of the expansion process, leaving organizations to do what matters most: operate uninterruptedly.
Expand into LATAM with an Experienced Partner
No matter which LATAM country best meets your organization’s expansion needs, Biz Latin Hub can help you break into your new market with speed, precision, and step-by-step assistance. Ready to take the first step towards growing your organization in Latin America? Reach out to Biz Latin Hub today to get started.