Why Argentina Is A Regional Hub For Entrepreneurship
Argentina is best known for soccer, tango, and, nowadays, as the birthplace of Pope Francis. But the truth is that Argentina has much to offer business owners.
Here are some of the reasons why many entrepreneurs are choosing to establish their offices in Argentina.
New Legislation Promotes Entrepreneurship
Simply put, some countries don’t attract entrepreneurs due to their legal system. Bureaucracy and convoluted tax systems make it hard to open and expand businesses. They inflate the cost, time, and expertise required.
It can be especially problematic for tech, biopharma, nanotechnology, and other innovative segments. They are usually ignored during the draft of a law (or the law was created long before their existence) and, consequently, might find it difficult to comply or adapt.
In Argentina, a new Entrepreneur’s Law was voted in 2017, bringing several benefits to entrepreneurs. For instance, it simplified the process of opening a business – now, a company can start trading after just one day instead of almost two months.
The called “simplified shares company” can be registered and managed online. It also allows opening a bank account, plus the digitalization of signatures, corporate books, and powers of attorney.
Tax Cuts and Loans incentivizes Business Growth
Taxes cuts are another incentive Argentina’s government is giving to encourage and attract entrepreneurs. The Law of Promotion of Software offers tax cuts to tech companies.
As a result of this law, the number of IT companies based in Argentina more than doubled. In 2012, Argentina exported more than $1,5 billion in software.
Then, in March 2019, the Argentine Government passed a promotional regime for the “knowledge-based economy” that includes software development, engineering, and R&D. This new law would cut corporate income tax rate to 15% and will be in force until 2029.
Another key initiative promoting business growth is the National Trust Fund for Entrepreneurial Capital (FONDCE), composed of 10 funds with a minimum of $30 million allocated on each. It was also created with the intention to provide 0% loans for new businesses. And Argentina-based companies can sell equity and offer convertible notes online via crowdfunding as another way to raise funding.
Incentives For STEM Professionals
While Argentina has a high-quality educational system, many third-level students move abroad to study or do research. They hope to improve or test their skills in Europe or the United States. And a good number of them don’t return to their hometowns, as they are offered full-term positions in universities, labs or companies abroad.
Argentina has been working on strategies to bring scientists and researchers back to the country and promote innovation domestically. Argentina’s Ministry of Science, Technology, and Productive Innovation has been offering incentives to exchange students and professionals making it even more of an appealing destination for STEM investment and progress.
Startup Incubator Programs
A great idea is essential to all businesses, but knowing how to implement the idea is as crucial. Entrepreneurs in Argentina can lean on several programs designed to support them over their first year in business.
Academia Buenos Aires, for instance, offers a two-month training course called Emprende, where entrepreneurs can learn about then lean startup methodology, design thinking, and other skills necessary to set up a successful business. Another option is incuBAte, an incubator program that finances up to 100 startups per round. It provides equity-free funding, mentorships, networking, and coworking spaces to the participants.
Infrastructure Set Up For a Global Economy
Investors looking to open a business abroad or established entrepreneurs hoping to outsource their operations will find everything they need to thrive globally in the infrastructure Argentina has to offer.
Internet penetration ranks 3rd in Argentina compared to other American countries, behind the United States and Canada.
Buenos Aires has been recognized internationally as an excellent place for business owners. Argentina’s capital was the winner of the Global Entrepreneurship Congress (GEC) Cities Challenge in 2015, thanks to its ecosystem and innovative policies supporting businesses. Additionally, various tech hubs around the country offer similar resources need to set up new businesses and local hubs for multinational corporations.
Work Culture is Aligned with International Business
The Argentinian workforce is educated (more than 40% of young adults have completed a third-level education), technically savvy, and is highly fluent in English (the highest proficiency in Latin America).
It also shares a very similar work culture with companies based in the United States and Europe. In Argentina, offices are a fast-paced environment, aimed at high performance, outstanding customer service, and ambitious sales targets.
Argentina is Member of Mercosur
Argentina is a founding member of the MERCOSUR, which helps Argentina promote trade with other members of the regional free trade organization, such as Brazil, Uruguay, and Paraguay. MERCOSUR also has trade agreements with the EU, which further promotes and opens trading between Argentina and some of the World’s biggest economies.
More Resources and Investment is Still Yet To Come
Argentina is a hub for entrepreneurs. Business owners find everything they need to start a successful business: the right infrastructure, tax system, legislation, workforce, work culture, funding programs, and more.
The Argentinian government is invested in promoting internal trade and investment in the country. They will continue to provide even more reasons for entrepreneurs to see Argentina as a great home for their business in the next few years.
Eleonora Israele is an analyst at Clutch responsible for research on <a href="https://clutch.co/call-centers/answering-services">voice services</a> and <a href="https://clutch.co/website-builders">website builders.</a> Clutch is a Washington, DC-based research, reviews, and ratings platform for B2B. It identifies leading software and professional services firms that deliver results for their clients.