Expanding Abroad : What Help Can a Local Partner Provide in Latin America?

Latin America has come onto the radar for a growing number of Asian companies in recent years. Those looking to open a company in the region have increasingly noticed its rich resources and vibrant market. While there is a lot of potential upside on both sides of the Pacific, the actual number of Asian businesses establishing operations in Latin America remains limited. This scarcity makes it an ideal landscape for innovative investors searching for untapped opportunities. 

However, Latin markets have some critical differences from Asian ones, and this means it pays to work with experienced local professionals when entering the region. We recommend working with Biz Latin Hub (BLH) for business registration in Latin America and ongoing back-office support. BLH serves as a valued member of the Financial Partners Network, reinforcing its versatile offerings as a credible partner.

As specialists in the region with 18 dedicated local offices, BLH knows the continent better than anyone. That means advising on topics ranging from the sectors you might target, intellectual property protection, bureaucratic processes and which country is right for you to open a company in Latin America.

This is key because you will need them to guide you through some of the unfamiliar bureaucracy you may encounter in the region, assist with legal and accounting support and perhaps most importantly, explain the nuances of local business culture.

The two continents are far apart, but they are connected with direct shipping routes across the Pacific Ocean. Central America in particular is of great importance to Asian companies as it provides a route onto the Atlantic Ocean as well, opening up access to European and West African markets too.

A growing number of trade deals between Asian and Latin countries mean that there are often preferable tariff rates. Free Trade Zones in the region, too, can offer a good way into Latin American markets or to develop trade networks onwards. Mexico grants access to the USMCA area, while Mercosur is an attractive market in South America.

Explore the compelling opportunity Latin America has to offer and how a local partner can streamline the business setup process : 

• Why Open a Company in Latin America?
• Opening a Company in Latin America : Why a Local Partner Can Help
• A Partner Makes it Easier to Open a Company in Latin America

The continent is an exciting place to invest in. Most countries in the region have had solid growth for decades and many took a big leap forward at the start of this century thanks to the resource boom. Like everywhere else, there was a wobble in the COVID/19 pandemic, but that has been ridden out and the region is back to growth again.

With a US$7 trillion economy, over 600 million citizens and a growing middle class, Latin America represents an attractive market for both foreign investment and company expansion. There is enormous diversity in markets, from giants such as Brazil or Mexico to specialized operators like Chile or Guyana.

With over (12%) of the world’s land mass, there is a lot on offer, including open and transparent financial markets, attractive incentives for companies to invest, an abundance of natural resources (lithium, copper, oil, gold etc.) a ready supply of human talent, well-developed infrastructure, and at a low market entry cost when compared to European and North American markets.

Many of these natural resources are in great demand in parts of Asia, with Argentina, Chile and Bolivia’s lithium deposits probably top of the list here. Importing primary resources is an obvious reason to invest in Latin America, but there are other attractions.

As the middle class grows rapidly in many countries, there is greater demand for consumer products that Asian factories produce. Tech, too, is a growing area of interest, especially for Indian companies looking to expand into South America.

Now is a great time to invest in Latin America, with bullish outlooks across the board for the region’s economies. However, you need to take some time to consider which territory is best for you, as they each have certain advantages for different sectors.

So, there are plenty of reasons to invest in Latin America, but is it right for you? Our partners at Biz Latin Hub have compiled a list of the 6 most common areas that they think new market entrants should consider when they open a company in Latin America.

Bureaucracy

Latin America is famed for opaque and forbidding bureaucratic processes. With specialized local support services, however, you should have few problems navigating it. Some countries, such as Panama, are smoother than others, so consider where you will find it easiest to operate.

Also, for many countries, you will need at least one representative who is resident in the country. In some jurisdictions, you will also have to take into account the need for a locally accredited and recognized lawyer, auditor and/or accountant.

Compliance

One of the most common ways for international investors to fall foul of the law is through compliance issues with hiring. You will have to make sure that you classify your workers correctly and give them the benefits they are entitled to. Not doing so opens you up to potential lawsuits.

Similarly, financial compliance is taken very seriously in the region, with measures such as Ultimate Beneficiary Ownership (UBO) registration being essential and increasingly widespread. A local partner will ensure that everything is in order and you stay on the right side of the law.

Local connections

You might know your sector inside out, but you won’t know the local job markets. That’s where teaming up with a local partner can open doors for you. They will have a good idea of who to talk to and where to find appropriate hires – at any level.

Those connections mean you will often be able to find well-educated and Anglophone young graduate workers at a similar price to Asian markets. This is most noticeable in the tech sector, with engineers and programmers flooding out of local universities.

Cultural Compatibility

Asia and Latin America share little in common culturally, both in and outside of the office. Having a local partner to guide you through the business etiquette of the country will be crucial. Like much of Asia, Latin America tends to be rather conservative and formal, although personal space may be closer than you are used to.

In terms of communication, English is widely spoken among graduates in the region and can serve as a lingua franca. However, having bilingual support is important, as it will allow your wishes to be easily communicated to local workers, customers, and/or clients.

Optimisation

Even if you are comfortable dealing with new bureaucracy and the myriad other issues that can come up when you form a company in Latin America, you are unlikely to maximise the benefits of your investment.

A local partner that fully understands the systems of each country will be able to make sure you know about all the incentives and benefits to which you may be entitled. In the case of a regional operator such as Biz Latin Hub, they will be able to advise on which country may be best for your particular area of interest – and help you expand later too.

Experience

Having a partner who has been there and done it all before will make it a lot easier to enter the market. Such an experienced partner will know all the classic and predictable issues that might pop up, as well as how to deal with unusual situations.

A good partner in Latin America will have been operating in the region for years and therefore have built up an intricate web of networks and knowledge. This means nothing will be new for them and they will know exactly what to do.

It’s clear that there is a lot of upside to opening a company in Latin America, but it does require careful consideration and is not something to rush into. The region is not for everyone – but if you like what you see above, it could be for you.

Your journey into Latin America will be made much easier by teaming up with local specialists such as Biz Latin Hub in order to make sure you go into the venture with your eyes wide open. Having wise counsel on hand will help you avoid some of the pitfalls that await unwary investors.