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Local Knowledge Is The Key To Success In Latin America
It can take companies years to build up local knowledge when they enter an overseas market and establish a presence. From the outset, there are all kinds of hurdles that can quickly imperil a firm's operations if they're not careful, so it's vital that expert advice and assistance be available from the start.
It's all the more important in these days of global trade and a focus on emerging markets where there are big profits to be made. Latin America holds a special attraction for many U.S. firms, but without the key local-knowledge advantage, it can be all too easy to stumble even before you're up and running.
Complex Regulation And Compliance
According to a survey last year by TMF Group, Latin America is the most complex region in the world for international corporations to do business, with Argentina ranked first, Brazil second and Bolivia third. Brazil has risen 15 places from last year’s rankings.
The study looked at 81 countries across the globe in terms of the complexity of doing business, from a regulatory and compliance point of view.
“These findings highlight how important it is for companies setting up for the first time in Brazil, or indeed the wider Latin American region, to have right level of local knowledge and support to help them ease the administrative burden so they can focus on what they do best,” said Ricardo Aquino, Managing Director of TMF Group Brazil.
Payroll is, perhaps, one of the biggest single issues facing foreign businesses in Latin America as a whole.
Not only must payroll managers navigate their way through the layers of complexity to get to grips with strict labor laws and tax rules, they also need to differentiate between a statutory requirement and a commonly accepted practice, which may be quite different.
“Latin America comprises a very distinct and complex group of markets,” explains Allan Harkness, Head of HR & Payroll Services for TMF Group. “However, there are two key actions that can be taken to keep abreast of upcoming legislative changes.
“The first is to work closely with other internal functions, such as tax and treasury, legal, compensation and benefits, and to take advice and guidance from any system suppliers and/or service providers. It could prove a false economy to try to customise your own systems to keep pace with the volume of change.
“The second is to bring in targeted expertise on the ground. This could be an in-house expert or a local and experienced payroll supplier, but they need to understand the complexity of the jurisdiction and have the resource and capacity to respond quickly to change.”
Knowing what to expect and how to operate in business environments that are vastly different to that of the United States is of key importance, and that's why many looking to overseas expansion turn to TMF Group for leading global advice and assistance.