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.
Hit the Ground Running with an Experienced Partner
No global expansion is risk-free. But by working with an International PEO, organizations can drastically reduce the risks (or avoid them altogether) and take on their new market with confidence. If you’re ready to break into LATAM firing on all cylinders, reach out to Biz Latin Hub today to learn how we can help you achieve your LATAM expansion goals. We’re ready when you are.