For those who desire to expand their businesses abroad, Latin America's market is an excellent option since their e-commerce grows every year which have the potential of becoming in high returns.
Although the way of making business resembles the way it gets done in the US or developed economies, you must be realistic and get a closer look at their socioeconomic conditions, language, history, culture, politics, laws, regulations and economics.
Benefits of expanding your business into Latin America
Before we begin enlisting their benefits, there are some facts you should consider. Latin America has a growing population of 640 million, with a GDP of more than US $5.78 trillion. The subcontinent has 46 countries, including the Caribbean, and their predominant languages are Spanish and Brazilian Portuguese.
Economic growth
In general terms, the macroeconomy of individual countries keeps strengthening, reducing inequality, and improving the socioeconomic progress and living standards, according to the Latin American Economic Outlook report of 2019 done by the UN.
For instance, e-commerce increases at a 24% annual rate since getting access to the internet keeps growing.
New business-related reforms
According to the World Bank Group, 18 Latin American economies implemented at least one reform to attract international investment. Brazil, Paraguay, and Peru are a few of the countries that new regulations for starting businesses and getting credits.
Save money
From doing all the legal procedures to hiring high-quality staff can be achieved at a significantly low rate as long as you have the right guidance like the one you could get with an experienced PEO. Otherwise, you can lose money by overpaying administrative tasks, red tape, or personnel.
Challenges you may face while expanding your business in Latin America
First of all, you have to consider that growing your company to any country in the world will imply the need to deal with specific risks related to the country’s governance, fiscal crisis or social instability according to the World Economic Forum. Nonetheless, Latin American governments have been working to make their countries secure for foreign investments.
Misunderstanding the culture you want to settle in
These can lead to several problems like offering a product or service that isn’t needed or interesting to the population, establishing an incorrect cost to your products according to the country’s market, or by implementing a work culture that’s unsuited to the country.
Lack of comprehension of the laws, regulations and taxation system
A significant risk by not comprehending them is that you might end up committing illegal acts, that result in expensive fines. Also, if you don’t understand the tax system entirely, it can cost you a considerable amount of time and money while it’s gets solved.
Trouble hiring the best employees for your organization
One of the primary reasons a company may have doubts before starting operations abroad is that it probably does not have enough local contacts to hire the best people for the companies interests. While you expand your business in Latin America, you may need help from other organizations that can solve this problem.
To expand your business in Latin America, you may need help
The best advice before you expand your business in Latin America is to do the proper analysis of the market and the reality of the country you are planning to arrive. Nowadays, it is pretty common to use some help from experienced organizations that may help your company adapt to this new environment as quickly as possible.
