Latin America presents new and exciting opportunities among its territories for foreign businesses. Especially during recent years, several governments in the region have worked constantly to improve their policies to facilitate ease of doing business for foreign businesses. Most importantly, increased digitalization has contributed significantly to business growth, leading to increased connectivity.
As Latin American markets became more interconnected, growth opportunities for companies has increased. Sectors like technology and innovation, renewable energy, e-commerce, and agritech usually makes it attractive for foreign businesses. Thus the region provides a vast, maturing market and relatively easy expansion process due to cultural similarities and geographical proximity.
However starting a business in Latin America could be challenging for those who are unfamiliar with the language, local legislation or business culture. As a foreign entrepreneur, it’s important to understand the key aspects that define the region in order to expand your business successfully.
Following are our top tips to ensure ease of doing business in Latin America, which will help in achieving a clear market entry strategy and understanding legal frameworks for your business success.
- Research the Local Demand and Business Environment
Expanding into Latin American markets require proper research into local consumer habits, as they might differ in each country. When planning to expand, research the local demands for a specific product or services, for greater success. For instance, according to Latin American Business Stories, electronics and media purchases are the top category in Peru, Mexico, Chile, Ecuador, and Bolivia. Whereas, in Brazil, beauty products is the top local demands followed by electronics. On the other hand, the top two industries in Argentina are tourism, followed by hobbies and toys. Hence, being mindful of the local business environment helps in a successful business venture for and any foreign entity.
- Identify Market Similarities and Differences
Many locales in Latin America share similar languages and culture, which can be applied in various markets. At the same time, there are unique differences between cultures, even in different areas within a single country. Thus, careful research must be done of those differences to avoid confusing, offending, or turning away potential consumers as a result of a cultural mistranslation.
- Know the different Legal Requirements For Company Incorporation
When it is time to incorporate a company, it is important to understand the different requirements for establishing a company in the region. Most importantly it includes understanding the different types of legal entities, annual compliance requirements and trademark requirements.
Types of Legal entities:
Most common forms of legal entities in Latin America for foreign businesses are limited liability companies, foreign branch offices, corporations and simplified shares companies.
Each legal entity has different set of obligations and governance requirements for each shareholder or partner and may require a different incorporation process. To know more, contact our specialists here.
Know your Company’s annual compliance requirements
While setting up your business in Latin America, it is crucial to understand your corporate compliance requirements to avoid any penalties that can impact your operations. Corporate compliance varies from country to country
Register Your Trademark
Another key element of legal requirements for a smooth business operation in Latin America is registering a trademark. This will help you in getting legal protection over the commercialisation of your services and products.
To protect your business effectively, also make sure to monitor the registration of new trademarks. This will help in preventing a third party from using similar distinctive signs that could affect your company’s profitability, reputation and client base.
- Seek Local Partners When Doing Business
It might be daunting to navigate through laws and regulations of any new country for a foreign investor. Also requirements vary for company registration, corporate banking requirements, sales and import taxes, local contracting as well as marketing and advertising regulations within each country in Latin America.
For a hassle-free experience connect with our local partners at firstname.lastname@example.org who will help you with legal requirements and market advantages. This way you can easily save time and money while gaining ground in local markets more quickly and thoroughly.