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More and more businesses are realizing the benefits of offshoring and entering into co-employment contracts with companies based in South America. The region is home to a large and highly educated talent pool, advanced technological infrastructure, buzzing industry, successful startups, and more. If you are looking to expand your business in South America, here are some important things you should keep in mind.
SERVIAP can help with your global expansion needs. Contact us today to learn how you can expand your business with PEO in South America and Latin America.
Why Do Business in South America?
Here are just a few of many reasons to do business in South America:
Technological Access is Increasing
One of the biggest reasons for the increase in popularity of South America is the fact that many countries in the region are investing heavily in technology infrastructure. In fact, many South American countries rival some of the most modern countries of the western world when it comes to internet connectivity and other technology advancements.
If you are doing business in South America, don’t expect old technology, slow internet speeds, and shoddy service. Instead, expect to be met with metropolitan cities and IT infrastructure that you’re used to back at home.
It’s a Place for Burgeoning Ideas
Even 20 years ago, South American countries may not have made it to the top of the list for places home to innovation, imagination, and creation. That has all changed significantly. Today, some of the world’s brightest minds and most successful startups come from South American countries. People all over the world look to the leading entrepreneurs in South America for inspiration on how to think big in new ways.
Educated & Skilled Talent Pool
Many South American countries have invested heavily in education over the last 20 years, especially in technological fields. For example, in Colombia, over 13,000 people obtain a degree in either IT or engineering every year. In Argentina, there has been an 80% growth in the number of students who are pursuing degrees and qualifications in IT and tech fields. Many other countries in the region have a similar trajectory, providing access to many highly educated and experienced engineers and IT professionals.
Outsourcing work to South American countries can allow businesses to reduce costs significantly. Individuals with equivalent or better skills compared to their counterparts in other areas of the world can be hired for lower salaries. The average annual salary for software developers in South America is around $13,245. Compared to the $110k average salary for developers in the U.S., cost savings are immense.
Beyond salary cost reduction, many South American countries will also offer incentives to businesses to operate in their country. From lower tax rates to investment incentives, grants, and relaxed travel barriers, there are many benefits of doing business in South America.
Tips for Doing Business in South America
There may be some cultural differences that you’re not used to when doing business in South America. While every country in the region is different, here are some general guidelines to help you put your best face forward with your South American business partners:
Personal appearance is a major consideration for doing business in South America. While some companies in the United States have taken a more laxed approach to work attire, their South American counterparts have not. If you are attending a virtual or in-person business meeting, plan to dress appropriately.
Americans are famous for their go-go-go attitudes. They want things done, and they want them done now. That’s simply not the way of life in South America. Life runs at a much slower pace than in the U.S. or even in Europe. That means if you’re doing business in South America, you should be prepared for it to take some time.
Deals and negotiations will often be extended over longer periods of time than you might like. You may also need to be prepared for your South American counterparts to not be punctual to appointment times. They’re not being rude. It’s just the way of life.
Business and Life Intersect
The saying “work is work, and life is life” doesn’t exactly apply in South America. Residents often interweave their personal and business lives, so don’t be taken aback if you’re expected to do the same.
South Americans like to establish familiar relationships with the people they do business with as well. So, be prepared to be invited to social and personal functions, and be sure to attend them if you can. In the long run, this will build trust and engender respect.
South Americans are Passionate
Many South Americans have a lot of passion for life, and it shows right out in the open. When they speak, they do so boisterously and sometimes loudly. Some people may make a lot of gestures, too. This can sometimes be taken as they’re being argumentative, but they’re not. This way of communicating may take some adjustment for people in the U.S., but it’s necessary to understand how to relate to your counterparts.
Treat People with Respect
Treating people with respect really goes without saying no matter where you are doing business. But, in South America, it is very important that you don’t come off as being better than anyone or that you’re patronizing them. South Americans especially dislike when they feel that Europeans and Americans are patronizing them. It will be very hard to come back from a slight like this if they suspect that’s your true feelings.
One way to show respect is to do business as they do business in South America. Following some of the steps above will certainly help you do that.
Expand Your Business
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in South America and Latin America.