Making a move overseas is a delicate balance of organization, planning, and agility. Understanding the best practices for a specific region can help ease the transition and increase overall success. If your organization is expanding into this region, you’ll want to grasp a general understanding of the types of partners and compliance requirements to meet when preparing for your Latin America expansion.
Moving your business into Latin America has many benefits including rich natural resources, geographic accessibility and a diverse population of both eager workers and interested consumers. Plus, political institutions are becoming more democratic and stable, making business conditions easier to manage.
Based on our expertise, we have compiled a few tips to help you get started on your international expansion strategy for Latin America.
Latin America Expansion: Business Setup
Starting a new business in any overseas market has its complications, and Latin America isn’t any different. Registering your company in your target country can be quite complex and time-consuming. During international expansion, companies find the best results when they stay flexible. As a result, we suggest using an agile global expansion method before committing to your country through a permanent subsidiary.
One way to approach Latin America expansion is with a partner through a lean method like FSaaS™ or Foreign Subsidiary as a Service. This Employer of Record (EOR) service allows your organization to gain a legal presence in a country without establishing a permanent subsidiary.
There are many benefits to going lean during international expansion including:
● Quick market entry
● Dramatically reduced costs
● Increased access to talent in your new country
● Compliance management
● Partnering with an in-country expert
FSaaS allows your company to expand internationally and focus on your business growth.
Managing Compliance in Latin America
There are a number of compliance requirements to consider during international expansion related to both employment and business operations. For example, value-added taxes make up a majority of the tax revenue for the region. There’s a set VAT on every transaction, which can range anywhere from 16 to 20%.
In addition, there are mandatory benefits like social security and paid time off along with voluntary benefits. To keep up with the competition, many employers in markets like Mexico and Brazil are offering voluntary benefits to attract top employees. For example, in Mexico, 65% of employees said that health insurance is a key concern. As a result, Mexican employers are offering work/life balance programs including flexible work hours, telecommuting options and supplemental healthcare.
To begin Latin American expansion and learn how to navigate your company’s move into a new market, get in touch with our team today. Our FSaaS solution can help you manage compliance, reduce hire time and expand into new countries with ease. Contact us!