All international expansion efforts bring with them a certain amount of risk, but Latin America (LATAM) poses several unique ones of its own. Not only is inflation incredibly high (and fluid) in countries like Argentina, but businesses should also think about the presence of cartels, political disturbances, and more. All of this can be successfully navigated with the help of an in-country support provider and partner—someone who’s been there, done that, and can anticipate issues to help businesses avoid these risks altogether.
In fact, there are three key ways that an International PEO (Professional Employer Organization) can help organizations better mitigate risks before, during, and even after a LATAM expansion.
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Why Is Risk Mitigation Necessary?
Each country in Latin America has its own set of laws that shape how businesses operate. Everything from tax structure to employment law to benefits, termination protocol, and more. Researching these laws and norms takes a significant amount of time; organizations should anticipate challenges to avoid costly mistakes down the road.
An experienced International PEO, on the other hand, can offer the type of in-country support organizations need to ensure that potential risks have been explored—and are navigable. An International PEO allows organizations to instead remain focused on their day-to-day operations.
Quick, Compliant Country Entry and Regional Mobility
Organizations that are open to the idea of sending employees to (or hiring them in) other markets when the target market doesn’t meet their needs can avoid legal headaches and financial losses. This is true if more promising opportunities present themselves elsewhere, like if an organization suddenly wants to leave Colombia for more promising opportunities in Peru.
This can be an excellent way to mitigate risks or avoid them entirely; it allows businesses to maintain the flexibility needed to make quick, smart decisions based on the most up-to-date information.
This is also true for hiring qualified talent to carry out the expansion—and these demographics are changing across the globe. Organizations that understand and capitalize on millennials’ openness to working in international environments, for example, have the upper hand when it comes to expanding across LATAM. Remember that by as soon as 2025, a full 75% of the workforce will be made up of millennials. Moreover, most millennials are more than willing to relocate for work if they think it will benefit their career development, making them excellent prospects for expanding your global reach.
Likewise, an International PEO can have employees ready to begin working in a new country in as little as 48 hours. This is true whether it’s a business’ first country or another on an ever-expanding list. An International PEO can also have businesses out of a country just as quickly; a detailed and organic exit plan is just as important as an organization’s entry plan.
Rather than spend a substantial amount of time, money, and effort on dissolving an entity, exiting the country with an International PEO saves time, resources, and headaches.
An International PEO Handles All Legal Considerations
An International PEO is a business’ employer of record, allowing it to hire on the organization’s behalf through locally-compliant contracts. It ensures ongoing compliance with ever-changing laws, ensures correct contractor classification, and can handle terminations should they be required. Further, an International PEO can prevent organizations from being blindsided by unexpected and unfamiliar legal issues—keeping businesses on track each step of the way.
Critical Social and Cultural Insight at the Most Important Moment
Finally, it’s critical to understand that social and cultural roadblocks or, at the very least, awkward social faux pas, can undeniably strain interactions in a new region. While an International PEO can’t be there to guide organizations through each meeting or event, a dedicated in-country support team can provide first-hand knowledge of any norms with which businesses should be familiar. This allows organizations to better fit in. With respect to cultural differences, many of these “soft risks” can be avoided altogether with the experienced insight.
Biz Latin Hub can support you and your business in Latin America
At Biz Latin Hub, we have a multilingual team for legal, accounting, recruitment and company formation services, ready and waiting to support your business efforts in the Caribbean and Latin America.
Our broad range of services allow our clients to do business with the peace-of-mind that they have checked allthe commercial boxes, and that they are compliant with all the relevant legislative and regulatory criteria.
To learn more about how we can assist you in doing business in Latin America, contact us.
Also, you can learn more about our team of professionals and how they are enabling commercial growth across Latin America.
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.