Latin America offers plenty of opportunities for foreign businesses. The region develops rapidly and attracts the attention of many overseas companies. Opportunity-seekers take advantage of unsaturated markets, a talented labor pool, and a steadily growing GDP.
While expanding your market to Latin America, you have to coordinate through laws and regulations that can differ tremendously from your familiar environment. That’s why legal services in Latin America are invaluable. Outsourcing functions such as market research, human resources, and administrative paperwork reduces the pressure on your employees. Additionally, outsourcing functions eliminates the risk of non-compliance in a new market with unfamiliar regulations. When seeking externally provided legal services in Latin America, local experts take to handle your non-revenue related work.
Find out about the services and value of externally-provided back-office services in Latin America, and how they can support your successful expansion in the region.
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Why expand your business to Latin America?
After LATAM has grown its GDP by 0.6% in 2019, the region is likely to rise by another 1.4% in 2020, topped by 2.1% in 2021, as forecasted by BBVA Research, a firm that publishes economic analyses since 1932.
Latin America offers business expansions for many sectors, but especially for global tech companies. By 2020, almost 100% of the Latin American population will have access to the internet via a mobile device. That is a market of 450 million people.
Did you know: Brazil offers the fifth largest population of internet users, after Indonesia, the US, India, and China?
Tech giants, such as Facebook, regularly trial new products in the Latin American markets before launching them in the US. Latin America offers prosperous opportunities for tech companies to test products ranging from financial to transportation services or E-commerce. Ecommerce grows globally by 23%. In Latin America however, the regional growth accelerates by 37%, outperforming even the Asian Pacific region by 2%. On the contrary, Ecommerce still offers massive room for expenditure, as the sector only contributes 2.5% of total retail spend. Amazon sets an example in seizing the opportunity: in 2019 the E-commerce giant established its infrastructure in Brazil and now provides its streaming services in Latin America’s biggest country.
Expert Corporate Legal Services in Latin America
Commercial representation and market entry planning
The first step to expand into Latin America is to understand the foreign market. It is crucial that you know:
- Key market opportunities
- Main competitors
- Product feasibility
- Potential distributors/ sales agents
- Strategic alliances
While researching those topics you will come across further barriers, such as:
- Language and cultural differences
- Legal judiciary risks
- Security risks
- Opportunity costs
It can be challenging to keep all these factors in mind while entering a new market in Latin America. A local back-office and legal service specialist can be your best choice during the process.
How to manage risks while entering a new market:
To avoid problems while entering a new market it is vital to get an extensive overview of all conditions in the foreign market. An experienced local market specialist can help you in every step on the way to enter your new market of choice successfully. A multilingual back office provider will support you to build a network of distributors, sales agents, and connect you with potential customers. What services does a back-office provide?
- Understanding your needs: a back-office provider knows your goals.
- Market validation: a specialist analyzes your market and highlights opportunities and threads.
- The route to market review: a specialist can map out a market entry program fitted exactly to your needs.
- Commercial engagement: Your company has recourse to an established local network of distributors, agents and finally, your potential clients.
- Ongoing representation: Your local partner offers on-going support for as long as you need it.
Finding and hiring local talent
Now that you have discovered a new market, analyzed and successfully entered your desired market, the next step is to find local talent. Latin America offers a highly skilled labor pool which is cost-efficient at the same time (find out how much an employee costs in Latin America). But local labor laws are very likely to differ from your home market. A Professional Employer Organisation, or PEO, offers relief.
What is a Professional Employer Organisation (PEO)?
In a nutshell, a PEO offers to outsource employment needs in a foreign country professionally, effectively and legally. A PEO hires staff abroad and manages all payroll functions while complying with the local law. As a result, you can focus on your job.
A PEO helps you in all aspects of employing local talent:
- Looking for the right candidate
- Help with training and onboarding
- Payroll processing
- Benefits management: vacation, Christmas bonus, social security
- Employment termination
Working with a PEO helps capitalize opportunities quickly. With the services, you can establish a local entity in as little as 48 hours. Just as easily, a PEO helps to exit a market, if plans change. Most importantly, a PEO helps to stay aligned with local legal employment laws and avoid heavy penalties. That’s why it is always recommended to work with an internationally experienced PEO.
Is a PEO right for me?
YES, if you want to:
- Save time and money
- Mitigate risk
- Get localized support
- Comply with legal requirements
As a result, you have more time to focus on your main business.
Legal and Accounting Responsibilities for business in Latin America
You have entered the market and taken care of hiring employees. But, what is next? Accounting and taxation. Here is a quick overview of your accountant’s responsibilities:
- Management of local, state, national and industry tax payments
- Make payment to providers and suppliers
- Calculate and pay the company payroll
- Draft and issue client invoices
- Maintain the company books
- Create the company management accounts
- Complete monthly and annual tax declarations
Where can I find a local accountant to help me with my accounting and taxation?
Our experienced multilingual accounting and lawyer team offers help in accounting and taxation in Latin America. We can help you with:
- Invoice management
- Payroll Processing
- Auditions & Tay management
- Financial reporting
- Bank assistance
Do you need more information about accounting and requirements? Find a country-specific guide of our legal services in Latin America on our website!
Use Biz Latin Hub as your back office and legal service provider in Latin America
Latin America offers plenty of opportunities to expand for foreign businesses. While expanding your business, you have to take many aspects into account. Next to commercial representation and market entry planning, PEO and hiring services, accounting as well as taxation, we can help with many more aspects while expanding into the Latin American market.
Entering Latin America in close collaboration with Biz Latin Hub will offer you relief from complicated paperwork. Most importantly, working with Biz Latin Hub will reassure you to comply with local labor laws.
If you are unsure what your next step in entering the Latin American market is, then get in touch with Biz Latin Hub’s experienced, local, bilingual specialists. Contact us now to learn more about how we can help you.
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The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.