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Incentives for Business Between Paraguay and Argentina

Incentives for Business Between Paraguay and Argentina

Like many other Latin American countries, business between Paraguay and Argentina is built upon a foundation of trade agreements and treaties to strengthen economies and regional integration, and provide new investment opportunities to those interested in entering these markets. Paraguay and Argentina have a historically fruitful bilateral relationship with a common goal: bilateral cooperation and the exchange of products and human resources. Paraguay with an emerging economy and a stable political environment has been becoming an attractive economy for investors. Argentina, considered as one of the most important economies in Latin America, constitutes an attractive focus to invest for both local and foreign companies. We outline a general summary of some of the most important trade agreements and agreements between Paraguay and Argentina in order to highlight the commercial opportunities offered by the two countries in the region. Agreements promoting business between Paraguay and Argentina The Yacyreta treaty responded to the world oil crisis by encouraging Paraguay and Argentina to seek a solution for energy supply. Yacyreta Treaty The Yacyreta treaty, signed in 1973, responded to the world oil crisis by encouraging Paraguay and Argentina to seek a mutually beneficial solution for energy supply. The objective of the treaty is to manage “The hydroelectric use of the Paraná River, the improvement of navigable conditions and the mitigation of the environmental effects generated by the Project”. As a result of this agreement, the Yacyreta Bilateral Entity was created....

Manage your Business Risks with Due Diligence in Guatemala

Manage your Business Risks with Due Diligence in Guatemala

When doing business in Guatemala, managing your business’ risks with due diligence practices is essential to its success and longevity.Language and/or cultural barriers, understanding the market and the way of handling businesses are challenges that foreign business owners face when expanding abroad. Buying existing companies or partnering with locals are key ways to reduce these challenges and get support navigating an unfamiliar market. However, it’s imperative to protect yourself when undertaking either of these processes by conducting thorough due diligence checks in Guatemala of the companies and people you will surround yourself with.Find out more about due diligence in Guatemala and how to manage your business risks. What is due diligence in Guatemala?  Due diligence refers to the process of thoroughly reviewing and analyzing available information of a company. Due diligence refers to the process of thoroughly reviewing and analyzing available information of a company. The focus of this analysis is primarily set on economic, legal, tax and financial circumstances of a company.  What is the purpose of due diligence?  The general purpose of due diligence is to conduct a risk assessment as part of the process of buying a company, hiring new staff or partnering with other organizations. However, conducting due diligence in Guatemala brings more advantages.The main objectives of a due diligence analysis are:  Reduction of information asymmetries between buyer and sellerEstablishing a basis of trust between buyer and seller through transparencyAnalysis of...

Update on Ecuador Taxation and Accounting Compliance

Update on Ecuador Taxation and Accounting Compliance

Understand crucial reforms of Ecuador’s taxation and accounting compliance regulations, and what should be expected for the year 2020 on Ecuador’s tax front. The country's President Lenin Moreno is trying to reform the economy and improve the business environment with the help of the International Monetary Fund (IMF). An important part of these attempts was a major tax reform at the end of last year. 18 tax reforms were implemented between 2007 and 2017. What were the effects on Ecuador's tax system and how does it look now? Timeline of changes in Ecuador’s taxation and accounting compliance The elimination of the advanced payment of income tax as a minimum income tax and the elimination/reduction of the foreign currency exit tax is what the business sector calls for the most. President Rafael Correa, who had his presidential term from 2007 to 2017, announced from the beginning of his campaign that his intentions were to remove inequalities, distribute wealth and achieve social justice. He also sought to eliminate commercial activities connected with tax havens.  As Ecuador is a dollarized economy, it was not an option to use an exchange rate policy as a tool to balance public finances. This led, in 2012, to the creation of the controversial foreign currency exit tax. In order to support investment in national production, encourage the use of environmentally friendly technologies, support strategic economic sectors and encourage job creation, the government issued the Organic Code of Production, commerce, and investments in 2010. The Moreno government The Moreno...

Colombia Tax and Immigration Cooperation: What Does this Mean for Business?

Colombia Tax and Immigration Cooperation: What Does this Mean for Business?

On 2 May 2019, the Colombian Tax Authority (DIAN) and the Colombian Immigration Office (Migración Colombia) published a press release informing that they had signed an inter-institutional cooperation agreement. The main purpose of this agreement is to allow the agencies to provide information between themselves in order to prevent tax evasion, money laundering and increase immigration control.    We explore what this agreement means for businesses operating in the country, and those considering their expansion options. Tax Cooperation - Streamlined tax and immigration information sharing Public entities enter into cooperation agreements with the aim of joining efforts to carry out their functions, and reach common objectives. Having agencies share information means less bureaucratic requirements on their customers to ensure information is communicated correctly across those involved in a cooperation agreement. In this case, the interest of the two entities converge in immigration and customs control. These Colombian agencies – DIAN and Migración Colombia - will start sharing information about foreign migrants living and working in the country. This will allow the agencies to communicate with each other on who in their system may potentially be evading taxes, money laundering, or posing another kind of threat to the country’s fiscal security. Ensuring greater tax compliance and monitoring of tax risks enables these agencies to make more informed decisions on applications for tax residence accreditation or tax certifications. What does this mean for foreigners in Colombia?...

Accountant’s Guide to Company Formation in Ecuador

Accountant’s Guide to Company Formation in Ecuador

Ecuador is increasingly becoming an investment destination of choice in Latin America. Investors planning on starting a business in Ecuador have the opportunity to take advantage of the country's economic offerings and strategic position in the region as the country works hard to open up its business environment. When planning your expansion to Ecuador, you'll need to understand and comply with local accounting and tax regulations. Knowing when to engage with an accountant during company formation procedures, and when paying your taxes and filing returns is crucial. We connect with our Ecuador accounting team to deliver key insights to foreign investors forming a company in Ecuador. How to Form a Company in Ecuador? Understanding the types of legal entities in Ecuador? There are several legal entities to choose from when starting a business in Ecuador. The Superintendence of Companies (Superintendencia de Compañías, Valores y Seguros in Spanish) is the government agency responsible for managing these companies, with the exception of the civil partnership structure. 1. Corporations (compañía anónima) Minimum capital: US$800. At least 25% of the capital must be paid at the time the company is incorporated. The remaining 75% can be paid within 24 months of incorporation. Number of shareholders: Minimum of 2. Shareholder liability: Shareholder’s liability is limited to the amount of their contribution. Legal Representation: General Manager, or President in absence of the General Manager. Governing bodies: Shareholders Meeting and Board of Directors (optional). Transfer of...

Accountant’s Guide to Company Formation in Peru

Accountant’s Guide to Company Formation in Peru

Peru is a beacon for economic success in Latin America. The country provides myriad investment opportunities in mining, agriculture, technology and other high-performing sectors. As investors express increasing interest in the country's open business environment and advantageous strategic location, we speak with our Peru accounting team to get top tips for foreign investors forming a company in Peru. 1. Company Formation in Peru - Understand the types of legal entities available to you There are several available legal entities in Peru to choose from to ensure your company has the right business structure: Empresa Unipersonal This business structure is mostly used in smaller business projects whose main sources of income are labor- and capital-invested. An Empresa Unipersonal owner is a natural person in charge of the development of all commercial and financial activity, and is personally responsible for the company’s debts. Empresa Individual/Responsabilidad Limitada: Individual Limited Liability Company This type of legal entity is also referred to as an Individual Limited Liability Company. This structure allows a company to initiate activities individually, using a RUC number (Tax Identification Number) and a different patrimony. In an EIRL, liability is limited to the capital that the owner has incorporated into the company, with the company's assets being separated from the owner's assets. After an Individual Limited Liability Company is established, new partners may only be incorporated if the structure changes to a Share Company or a Limited Liability Company....

Why Establish Your Holding Company in Panama?

Why Establish Your Holding Company in Panama?

For many years, Panama has been a destination of choice for entrepreneurs to establish a company for their Latin American expansion. The economy is one of the fastest growing in the region, showing an average increase in annual GDP of 5.6% between the years 2013-2017. It’s projected to remain at the top of regional growth rankings once again for 2019. Panama offers a range of advantageous commercial conditions making it highly competitive to its neighbours, including: low tax and labor costs easy constitution process simple shareholder registration low cost on annual renewal fees. One important way to access the Panamanian market and begin your regional expansion is through establishing a holding company. Subsidiary Panama? What is a holding company in Panama? Holding companies are parent companies that have majority control over another company through the volume of their voting stock. They exist solely to control other companies, and at times may own other assets in the subordinate company, such as real estate, trademarks and patents. Holding companies may even own 100% of another business, known as a ‘wholly owned subsidiary.’ With this influence, a holding company can oversee the policies, procedures and management decisions of this second company. However, though it owns a large share of another company’s assets, the holding company does not participate in its day-to-day activities. Holding companies and their subsidiaries take several legal forms; they can be limited liability companies, corporations, or limited partnerships. Straightforward company formation...

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