View Full Version : Doing business in Argentina
Thanks Jackson for let me post this thread in my opinion sometimes it's useful to know.
First of all, american and argentine way to do business it's different some ways but the same all over. I've been in both cases and I've found scams, right people, stupid things and unnecesesary paperwork and stuff in both places.
What makes the differences (in what I've seen) it's just three variables:
- Timming.
- Amount.
- Service.
- Taxes respect (fear of prosecution)
Perhaps this may not apply for every transaction but in general it works, I've been researching for these differences talking to several friends that also did or attempt to make transactions in both countries.
Time is money:
The more transactions you make in a period, the more profit you make. But in Argentina they move slower and why? Because of the value of the product and the smaller size of the market.
Argentineans will not move down original prices too much when they receive an offer, obviously I'm talking about business not small chica negotiation. In general argentieans will tempt to wait more time than making a discount.
This is also observed in season sales, after easter you will not see a wholesale on chocolate eggs as in the US, in Argentina they choose keep the eggs till the next year (observed by myself at the supermarket)
This make the whole production chain gets paralized against the American case where the production chain ends and gets activated from zero the next year.
Similar happens whith a guy that I know who is trying to sale an apartment since two years ago and he don't want to move the price and the apartment still for sale. Amazing!
Some times this may become an opportunity since as the market move slow, it also makes buyers does. So if you are energic you may get an advantage.
Amounts, larger or smaller?:
I good statistics proffesor I had he told us once that people seen itself as middle class and politically moderated, even if you ask Bill Gates he will respond that he have middle class behaviors and the same answer will be obtained from a poor guy.
Access to technology, trips and credit it's more restricted in Argentina, but access to education (including university) and health it's more restricted in the US.
Anyway, running a business in Argentina it's cheaper than in the US. But the marketplace for selling in Argentina it's also smaller.
On the services is where I absolutely complain:
Services may be cheap but quality of services in my overall revision it's not good. I wish I see the city cleaner and friendly, but too much buses, and people behavior make you see the streets dirty, full of envelopes people just throw and dog shit. These behaviors some times are also duplicated when you hire a lawyer that acts slow as a turtle, a designer some lundries, taxi drivers that takes longer ways and many other examples.
Service it's depreciated since when someone starts a chain and decided to contract not the best one but the cheaper one to save, they obtain bad quality that repeats over and over till the final product it's also bad.
So, when you hire an acceptable service it's absolutely overpriced:
For example, if you hire a remis to pick someone to the airport, there are many that offers an '87 / '89 peugeot 504 model as a remis for 50 pesos.
If you want to travel in style in a '99 Mercedes Benz Model it's 230 pesos.
Hummer Limo? Doesn't even exists.
On the taxes: Many people try to avoid to pay taxes in Argentina and many because they don't see the taxes they pay expressed into general improvement.
Below is a review of a documentary I think anyone contemplating living in BA would be interested in:
After the Collapse.
A review of Argentina: Hope in Hard Times.
By Sean Cain.
Throughout the nation of Argentina, tens of thousands of unemployed.
People search the streets and garbage dumps for recyclable products.
Called Cartoneros, many of them are young, some of them barely teenagers.
Each Saturday, a truck drives by their neighborhood to buy some of what.
They have collected. This is their means of survival in the new.
Argentina.
Illustrating this day-to-day struggle of unemployed and.
Poverty-stricken Argentines is an inspiring new documentary by Seattle-based.
Independent film makers Melissa Young and Mark Dworkin. Entitled Argentina: Hope.
In Hard Times, the film reveals how ordinary people in dire.
Circumstances can overcome incredible challenges by working together for common.
Goals.
The story of Argentina over the past decade has been a sad one: due to.
Financial pressures from the International Monetary Fund (IMF) the.
Government privatized state assets, fired tens of thousands of civil.
Servants, deregulated financial markets, slashed social program spending,.
Raised interest rates, and cut public sector wages and benefits. Not.
Surprisingly, the incomes of the wealthy and powerful increase almost.
Exponentially, while unemployment and poverty skyrocket for the poor and.
Working class, leaving the country with greater inequality and poverty.
Added to this is the financial collapse that began in 2001, when even.
Hundreds of thousands of middle-class Argentines started to lose their.
Jobs and savings.
When this crisis hit, Young and Dworkin were actually on vacation in.
South America. But with millions of Argentines taking to the streets.
Shouting "Que se vayan todos!" ("throw them all out!") and thousands of.
Desperate workers taking over abandoned factories to protect their jobs,.
The film makers went back to the United States and later returned to.
Argentina with their film equipment.
Whereas other documentaries such as Naomi Klein's The Take focus on.
Democratically-controlled businesses in Argentina, Hope In Hard Times.
Embraces a much broader perspective on the Argentine free market tragedy.
The documentary not only examines how Argentines have adapted their.
Lifestyles to a crumbling economic system, but asks larger questions about.
Human nature and the possibilities people have of building a different.
Kind of economy and a new society.
It is difficult to believe that 100 years ago, Argentina had one of the.
Largest economies in the world, and the per capita income was about 70%
Of that of the United States (today, that number is about 25%)
Historically being the richest country in the continent, many Argentines used.
To consider themselves more European than South American, although.
Recently this attitude has begun to evaporate.
Some of the more memorable scenes from the documentary include its dire.
Illustrations of shanty towns that look remarkably similar to those of.
Apartheid-era South Africa, demonstrating the widening divide between.
The rich and the poor. Young and Dworkin also take the viewers into the.
Street corners of Buenos Aires, where organized groups of activists,.
Many of them unemployed, gather on a regular basis to discuss ideas and.
Proposals for future actions, such as street demonstrations, tax.
Revolts, land occupations, and more ambitiously, lobbying government officials.
To refuse additional IMF loans. Every suggestion is voted on.
Democratically by the group, with each member having a vote.
This egalitarian form of organization mirrors many of the factories.
Recently taken over by workers throughout the country. With the economic.
Collapse came the abandonment of hundreds of businesses by their owners.
But instead of joining the ranks of the unemployed, some workers.
Decided to not-so-legally take control of their companies and manage them.
Democratically, without bosses. The film examines the worker-controlled.
Ghelco company, Industrias Metalurgicas why Argentina (IMPA) and the.
Celebrated Brukman clothing factory of Buenos Aires.
Related to these industries are the newly-developed cooperatives that.
Have sprung up throughout the countryside, all of whom integrate.
Significant levels of democratic decision-making. The Light of Hope Community.
Centre, which was created on the site of a former garbage dump,.
Includes 340 families. Just a few miles down the road there exists another.
Cooperative where more than 130 people farm on nine hectares of land.
Child-care cooperatives, barter fairs (where people can freely exchange.
Goods and services) and a growing array of charitable organizations.
Further symbolize the new forms of collaboration growing in the country.
Viewers might expect the documentary to deal with the politicians, IMF.
Officials and other elites who were largely responsible for the crisis.
It refuses to do so, and it is the film's interaction with ordinary.
Argentines that is most stimulating. A young protester is interviewed and.
Proudly states that his local church raised funds for the victims of.
9/11. He then ironically asks "if someday the you. S. Will help us." One.
Elderly woman, a member of the Mothers of the Plaza de Mayo, who march.
Every week through a square in Buenos Aires carrying pictures of their.
Sons to remember the 30,000 people killed by the military dictatorship.
From 1976 to 1983, comments on the larger picture: "Globalization is still.
Capitalism, they've just given it another name. Capitalism always turns.
Into imperialism."
It is this collective outlook of the Argentine people that reveals.
Their true character. One would think that desperate people would turn.
Inwards and concern themselves with their own well-being. As Hope in Hard.
Times illustrates, millions of people decided instead to work together.
For the common good to improve their conditions. During a political or.
Economic crisis, what is it that makes one society turn to equality and.
Democracy, such as contemporary Argentina, and others to turn to fear,.
Repression and exploitation, such as 1930s Germany? What would happen.
If such an economic catastrophe were to strike North America, something.
Which no longer seems that unfeasible. How would we respond? Would.
People work together to tackle such problems as poverty, unemployment and.
Inequality, or would they turn to xenophobia, immigrant-bashing, leader.
Worship, and the neo-liberal orthodoxy of "greed is good?"
What is most unfortunate is that the recent story of Argentina has.
Largely been ignored by the mainstream media (just imagine the news.
Coverage if this kind of economic crisis and eventual revolt of the masses.
Were to take place in Cuba or Venezuela) Hope in Hard Times should be.
Required viewing for economics professors and government leaders who still.
Have faith in the neo-liberal policies of the IMF and the World Bank.
Shown recently at several film festivals throughout North America, it.
Paints a very hopeful picture and reveals the huge potential for billions.
Of people throughout the Global South to overcome even the most.
Spectacular failures of free market capitalism.
Sean Cain is a freelance writer from Oakville, Ontario. He can be.
Reached at seancain@hotmail. Com.
I probably can better comment on this subject better than most in Argentina. I started 3 Argentina corporations here (2 SRL's and 1 SA) All are doing well. Before moving to Argentina, I was a corporate executive. I had business interactions with over 600 of the biggest and most respected corporations around the world. I also dealt with prominent families of the USA as well as institutions like the Federal Reserve Bank. I only point this out to show that I do understand how business is done properly in most countries around the world.
There are fundamental differences here in the business community. Argentina may perhaps be one of the most difficult countries in the world to do business in but those that are organized, well educated, have experience doing business and are well funded can prosper here as I have proven. In fact, my consulting company helps many foreign individuals and businesses do business here properly and efficiently.
I have posted on other message boards on this subject so to save time I'll just cut / paste my comments here on the business environment.
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I am an American and I moved to Argentina last year. I came down over the course of 2.5 years 15+ times before I moved here permanently. I find the Porteños very educated and friendly. However, it is a totally different world being in a city like Buenos Aires as a tourist and another living here and operating as a business.
Before moving down to Argentina, I read that Transparency International, which is a well respected organization listed Argentina as one of the most corrupt countries in the world to do business in. http://www.transparency.org/cpi/2004/cpi2004.en.html#cpi2004 I thought to myself there had to be a mistake. Why would they write this about a country I loved so much. How could Argentina be grouped with countries like Libya, Ethiopia, Kenya, Angola and the Congo??
Let me tell you something. After living down here and doing business with these locals I can tell you that I'm surprised Argentina isn't ranked further down the list. It is sad to say but the way many businesses here do business is almost criminal. The truly shocking thing is most businesses have done business like this for so long --this is all normal to them. They don't know another way to do business. The Porteños always try to compare themselves to their European descendents but from a business perspective they have more in common with African nations like the Congo, Angola and Ethiopia.
There is no sense of ethics or loyalty for the most part. There are exceptions to the rule but many locals try to extract as much as they can out of the first/only transaction. They try to make as much as they can in the beginning and they don't worry about a longer term mutually beneficial relationship in the future down the road. This is perhaps the biggest challenge I have doing business here.
The reality is that the vast majority of companies here in Argentina would be bankrupt or go out of business in as little as 2-3 months in the USA or the UK. In the United States companies that operate like this quickly go under and are replaced by companies that are organized, ethical and offer good customer service and strong relationships with clients that last for years. That is very rare here. Many companies here think they are doing you a favor by spending money with them or giving them your business. They are so short sighted here. It's truly unbelievable.
Many savoy and intelligent businessmen and women have emigrated to the United States and Europe because they could not do business in their own country. Not only do they not trust the government but they don't trust one another. Family fortunes have been made but then lost due to rapidly changing laws, market conditions or outright theft. It is scary to think about but it is not like the United States. There are not stories after stories of how people made fortunes. There are far more tales of how people lost their shirts. One successful Porteño, named Roberto, who owns and administers www.travelsur.net emigrated to the US emailed me the following, "Argentina, for the most part, is the closest thing to the wild west anywhere, aside from some African countries. And chances are it will forever remain like this, in between short periods of calmness." I couldn't agree with his statement more.
Many locals are blind to this type of behavior and they believe this is how business is done all over the world. The Porteños that have studied or worked abroad in the USA, UK, Asia or other parts of the world recognize this defect of their own country. My doctors, attorneys, bankers, accountants and friends all studied or worked abroad so they understand how difficult it is in their own country. Many meetings I go to on a daily basis the locals apologize ahead of time for the system here in Argentina.
However, this kind of behavior is exactly what has caused my companies to grow so quickly. Americans and Europeans don't like doing business in this fashion. Individuals and investors that are flocking to Argentina do not trust the locals (for good reason) so they have hired me and my company as a consultant to assist them. It takes more than a good idea to evolve and create a viable business here in Argentina. It takes capital but it takes a good knowledge of the kind of business environment that is in place here. Many foreigners pack up and go home very quickly because they are not accustomed to working like this. They were not educated on how slow the system is here and how much red tape there is. They have never before operated in an environment where there is no loyalty, ethics or professionalism.
Those with a solid business background that have operated in the USA / UK / Europe / Asia, that have a good education and understand business and long term relationships, and are well funded are going to become dominent leaders in their respective fields here in Argentina. The key is having a realistic expection before you come of what the business environment is like. There are many opportunities in Argentina for a foreigner with a good head on their shoulders and a good business plan. There is no hope of coming to Argentina and getting ahead by being an employee. You MUST start your own business here to thrive.
While I am fully aware that it is impossible to change the system on a massive scale, my goal is to create businesses and help others create businesses that will fundamentally help change the business community in Argentina. Since the dawn of time -- no matter how much corruption there was in a society, companies with a solid business model that operated efficiently and properly and were well funded, not only excelled but they caused other companies to rise to the occassion.
______________________
MCSE was correct that it is less expensive to run a business here than in the USA/UK and other parts of the world but the market is smaller for most products. I have meetings every week with foreigners that seek my consulting on their business plan. 98% of them are very bad and wouldn't make it here. Or if they did, it wouldn't be worth it for them because the income would be too small. You have to really think things through before deciding to try to start a business here.
There are great ideas out there. I have thought of several but I'm just limited by time since I'm working a ton as it is. Those that are planning to move here and do business here need to really have a good game plan. Make sure you have excellent advisors, lawyers, accountants and bankers. This will go along way to help you achieve your goals.
Maybe my other posts will help out as well so I'll post them below as well. I've been emailed over the years that my posts have helped many. I ask for nothing in return. Just hope it helps and if you receive some benefit then "pass it on" and post some other useful information for other future readers.
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Importance of a Solid Business Plan and Business Model
Perhaps the most important factor in the success of a company in any country, but especially Argentina is coming up with a solid business plan. Everyone has great ideas but how many people follow through with those ideas? Not many. In a country like Argentina, it takes much more than a great idea to make it. You must formulate a business plan and keep working on it until it is perfect. Even after it is perfect, pitch your business plan and business model to all your business associates, lawyers, family and friends. Talk to your acquintances that may work for financial institutions as well. Present your business plan to every single one of them until every single one of them tells you that you have a good idea that they deem to be viable. If even one of them points out flaws in your plan, keep changing it until it is perfect.
The moment of truth. Once you perfect your business model and everyone tells you how great of an idea it is, ask them if they would want to become an investor in the company you were forming. If it is such a great idea and you thought your business plan was solid and you pitched it correctly, you should have people interested in what you are trying to put together. If you just get a few people that say they would invest you have accomplished something. Once you make it through all those steps, don't move forward unless you are well funded.
Put some serious time and money into researching your business plan. In my quest to do business in Argentina, I came down to Argentina about 17 times over the course of 2.5 years. Each trip I would make a few contacts. More than anything, I wanted to learn how things operated here. It is imposible to understand just how rotten the system is until you are working here on a daily basis. It is not just one segment of the work industy. It is rampant problems throughout the system.
There is no such thing as "easy money" here in Argentina. I am routinely working 12-14+ hours a day. Although I tested the waters back in 2002, I didn't move down to Argentina permanently until August 2004. Because of the hard work and dedication over the course of 2+ years putting together a solid business plan, after only 9 months I am already getting unsolicited offers from individuals and corporations from outside Argentina to purchase my company and several of my owned properties.
Don't get discouraged by others that tell you that you are foolish to want to try to start a business in South America. Everyone told me that it was a mistake to quit a lucrative career in the USA and move here. Now, after only a few months, those same people are telling me that they are envious and wish they had the courage to follow their dreams as I did. Anything is possible but remember that it takes a solid business plan, dedication and a lot of hard work, and enough capital to get started and operate for the first few years.
Keeping your Cash Offshore
Offshore deposit accounts should form the foundation for any expat. Offshore accounts are not used to beat bond or equity markets - they won't. Offshore accounts are used because they offer both safety and liquidity.
Before moving to Argentina, you will be well aware that you will not want to deposit any significant amount of money into the local banking system. The locals have been swindled out of their savings by their own government. While it will be necessary to open local u$s dollar and Peso accounts, it will be for convenience purposes only-- for things such as paying bills with online banking.
With the tremendous power of the internet, gone are the days of using a traditional bank with high fees. Unfortunately, due to historically low interest rates, deposit accounts -normal or offshore- are paying out very low interest rates. Still, with all the advantages it is a must for an expat doing business in Argentina. Deposit accounts are both safe and secure. Offshore deposit accounts should form the basis of your financial life.
Set up an account with plenty of time before you move to Argentina. Allow time for any checks, ATM debit cards, credit cards, PIN numbers, etc. to arrive at your USA address before you move. Making sure you have these accounts should be your priority and the one thing you concentrate on doing before you move.
It is not necessary to worry about setting up long-term investments in the first 6-8 months of moving abroad. You might decide that Argentina is not for you or you simply can't work in this type of business environment and move back to your home country. This initial 6-8 month time frame gives you time to see how things are going. Put any spare cash into your deposit account during this time.
It really does not matter which bank you decide to use. The important thing is to keep your cash offshore out of Argentina.
Power of Technology
The power of the internet and technology should be utilized to the fullest extent. It is wise while putting together your business plan to set up everything you will need to stay connected in Argentina. Just because you are leaving the United States does not mean you will not need to stay connected to the United States. Odds are you will have clients, business associates, advisors, and friends in the USA that you will need to operate efficiently in Argentina.
Vonage.com
Perhaps one of the most important technological advances for the expat moving to Argentina is the VOIP (voice over IP) phone service. It is amazing technology that allows you to make/receive unlimited calls to/from the USA for a flat $25 per month fee. You can go to Vonage to sign up for the service. Email us before you sign up if you would like to receive one month free. After you sign up, you will receive a small box that you simply plug into a high-speed Internet connection here in Argentina (or anywhere in the world).
As long as you have a high-speed connection you can plug in your IP phone and you can make and receive calls unlimitedly to the USA and Canada. Service is quite good as long as you have a good connection. You can sign up with the area code of your choice so you can get a number from any USA city. You can also sign up to receive a toll-free number (for an added fee) if you have many clients in the USA.
eFax.com
Email is powerful but there will probably always be a need for faxes. eFax is an amazing service that allows you to set up a USA fax number in the area code of your choice. Faxes received at this number are automatically sent to you via email to you in Argentina, or wherever you are traveling. You select an email address you want the fax delivered to. You can receive faxes from anywhere in the world you are traveling to.
Not only can you receive faxes via email but you can also send faxes via email or online via their website with your efax number and PIN number. Efax will convert your document to a fax and they will email you a confirmation so you know the fax was sent. It is amazing technology that should be utilized. Service is very affordable at $13 per month.
Paperless PO Box.com
Paperless PO Box is a great service that allows you to have a USA address even though you are living in Argentina. This company gives you a PO Box address in the USA. All of your mail is scanned by a computer and then they email you a copy of what they scan. Keep in mind that if you need a physical copy of the mail or it is an important document, you may want to have that mail sent to a family member or friend in the States. The US Postal service will forward all mail to you to Argentina free for a one year period although the mail service here in Argentina is not too reliable.
This service is wonderful for most documents that you don't need the original document. In this day and age of the internet, there are very few documents where you need the original copy. All the scanning of the physical mail is all automated by machines so there is never an actual person reading your mail. If you do need a particular document, their company can overnight you the document. The original mail is preserved for 90 days and then automatically destroyed if you do not request it. It is affordable at $30 per month.
PayTrust.com
PayTrust enables you to send payments to anyone in the USA. Even though you are living thousands of miles away in Argentina, odds are you will still have bills in the United States. Taxes, professional services fees to attorneys/accountants/advisors, credit cards, etc. are a part of most expat's lives no matter where they are living. We all have bills in the USA and this company allows you to pay these bills with no hassles effortlessly.
You get a user name and password and log in to your account. You can see your account balance from your bank and send payments to anyone in the USA. This is far different than online bill paying with your bank. You actually get a PO Box address that you can send your bills to. All bills are scanned and you can see these bills online. Paytrust allows you to even pay property taxes online which is not possible with traditional online banking. The cost is reasonable at $13 per month.
Importance of Relationships with Trustworthy Local Contacts
Another key to the success of starting your business will be creating relationships with locals whom you can trust. That is more difficult that you would think. A good attitude to have in Argentina is trust NO ONE until they prove they can be trusted. There are only a handful of people I trust here in Argentina. Still, it is impossible to create a business with out the help and assistance of local contacts. It is simply impossible to start a business in Argentina without good advisors, accountants, lawyers, banks or financial firms and local business owners.
As previously mentioned in the "Business Environment in Argentina" section, it's a jungle here and you will fail if you don't take the time to set up relationships with good local contacts.
There are various ways to structure your corporation but most corporations require that you have at least another partner. You can't form a corporation with just one person so naming only yourself is not an option. There are ways to form a company with just one person but they are not the best option because there are limits to the amount of money the company can earn in each calendar year. It won't make sense for most entrepreneurs starting a company here.
One common corporation here in Argentina is the equivalent of our LLC (limited liability corporation) in the United States. It is called a SRL here. It stands for Sociedad de Responsabilidad Limitada. You must have at least one other partner in your corporation so it is essential that you have someone that you can trust 100% because at least on paper that person will own 10% of your company.
Saint,
Why is it necessary to have "offshore" accounts if you already have US accounts? Is it easier to transfer funds from Argentina to such accounts? Is there some other benefit?
Moore
I have established seven corporations in Argentina. I employ three hundred Portenos. I am tremendously successful, and deal with the most prestigious institutions in the country. I know how to create wealth and live a high-class lifestyle, for my experience in international financial circles rivals most bankers twice my age. My apartment overlooks Plaza San Martin. I have a penthouse suite on the top floor of the most modern, expensive building in the city. I imported a special solar-powered heating system for my rooftop swimming pool, and I have not only one, but two hottubs. My office has gold faucets in the executive washroom, though the employees will have to make do with stainless steel in theirs. I walk on parquet floors made with rare imported woods harvested in a small river tributary of the Amazon. I financed the sawmill which cut the trees, and in my spare time I created a new type of blade to cut the wood quicker and more efficiently, with less waste. The wood flooring style in my apartment is unique, and Architectural Digest has assured me that they will be doing a cover story on the parquet inlay, which was created by six master craftsmen from Patagonia. I spend my weekends at the Llao Llao Resort, where I have a private suite overlooking the lake. To get to Llao Llao, I have a private jet which takes off from Newberry Airport and takes me straight to hotel, which constructed a private landing strip to accomodate my Gulfstream G5. In fact, my G5 has its own private hangar at Newberry. The three stewardesses and two pilots are all former Playboy Playmates of the Month. My Bentley, a classic 1948 model, few of which exist anywhere in the world outside my garage, is driven by a former Peronist Senator from Salta who found himself out of office in the last election. When he is not polishing the chrome bumpers, he is my go between between my corporate headquarters and the Casa Rosada. Every week I close a new deal, making hundreds of thousands of dollars. In the evenings, the executive chef from Cabana Las Lilas comes to my apartment to cook me a home dinner. I was recently nominated by President Kirchner himself for the Nobel Prize in Economics, but I am too modest to accept the nomination, so the award will go to another candidate. I work very hard, and am tremendously successful, and you should be grateful that with all my worldly success, I still have the ability to post on this board all the time.
Moore,
By "offshore" I meant offshore from Argentina. Any USA bank account will do for your purposes. In fact, a USA bank account would be the best. You can easily sign up for an internet bank like www.bankdirect.com or www.netbank.com They allow you to withdraw up to u$s 500 equivalent per day without paying a fee.
Good luck.
I have established seven corporations in Argentina. I employ three hundred Portenos. I am tremendously successful, and deal with the most prestigious institutions in the country. I know how to create wealth and live a high-class lifestyle, for my experience in international financial circles rivals most bankers twice my age. My apartment overlooks Plaza San Martin. I have a penthouse suite on the top floor of the most modern, expensive building in the city. I imported a special solar-powered heating system for my rooftop swimming pool, and I have not only one, but two hottubs. My office has gold faucets in the executive washroom, though the employees will have to make do with stainless steel in theirs. I walk on parquet floors made with rare imported woods harvested in a small river tributary of the Amazon. I financed the sawmill which cut the trees, and in my spare time I created a new type of blade to cut the wood quicker and more efficiently, with less waste. The wood flooring style in my apartment is unique, and Architectural Digest has assured me that they will be doing a cover story on the parquet inlay, which was created by six master craftsmen from Patagonia. I spend my weekends at the Llao Llao Resort, where I have a private suite overlooking the lake. To get to Llao Llao, I have a private jet which takes off from Newberry Airport and takes me straight to hotel, which constructed a private landing strip to accomodate my Gulfstream G5. In fact, my G5 has its own private hangar at Newberry. The three stewardesses and two pilots are all former Playboy Playmates of the Month. My Bentley, a classic 1948 model, few of which exist anywhere in the world outside my garage, is driven by a former Peronist Senator from Salta who found himself out of office in the last election. When he is not polishing the chrome bumpers, he is my go between between my corporate headquarters and the Casa Rosada. Every week I close a new deal, making hundreds of thousands of dollars. In the evenings, the executive chef from Cabana Las Lilas comes to my apartment to cook me a home dinner. I was recently nominated by President Kirchner himself for the Nobel Prize in Economics, but I am too modest to accept the nomination, so the award will go to another candidate. I work very hard, and am tremendously successful, and you should be grateful that with all my worldly success, I still have the ability to post on this board all the time.Great post! Very amusing.
Saint may come across as a bit pompous and self-important at times but nobody makes anybody read his stuff and there may well be nuggets of gold in there. He seems happy to spend the time it takes to create a well-written post so I figure it's worth taking a few minutes to read it.
I admit there is nothing in his stuff as useful as knowing that the executive chef from Cabana Las Lilas is available for catering and that there is life after the Mansion (the Playboy one) for Playmates.
Daddy Rulz
08-21-05, 21:53
Yes He (Saint) can come off as kind of pompus but his posts and experiance are a valuable resource.
Who said anything about Saint? Let's talk more about me please. You know, how successful, handsome, and rich I am. Admit it, you're very interested, yes?
Spassmusssein
08-21-05, 23:35
Obviously it is possible to do business in Argentina.
The better your Spanish, the easier to go.
I adore Hunt's future Nobelprice for "Argentinomics" *rofl, rofl* as well as Saints selfconsciousness.
I am shure, Saint will continue making big money as well as giving good advice to us.
Usually the local buss-owners prefer lowprofile to avoid kidnapping or getting there laptops stolen.
With good lawayers, tax-advisors and real-estate brokers it is as possible as in any other new country to get in the market and earn good profits.
Damn, this is the most interesting thread I have found in the forum, and there's hardly any mention of pussy.
Saint, excellent post. In my so far limited experience dealing with Argentine companies, everything you (and some other folks here) are saying rings true. The only thing missing is the famous joke. You want to know a good way to make some money? Buy an Argentine for what he's worth and sell him for what he thinks he's worth. Damn, have I seen the truth behind that joke.
[Edit] Of course no offense to the lovely people of Argentina intended.
I probably can better comment on this subject better than most in Argentina. I started 3 Argentina corporations here (2 SRL's and 1 SA) All are doing well. Before moving to Argentina, I was a corporate executive. I had business interactions with over 600 of the biggest and most respected corporations around the world. I also dealt with prominent families of the USA as well as institutions like the Federal Reserve Bank. I only point this out to show that I do understand how business is done properly in most countries around the world.
There are fundamental differences here in the business community. Argentina may perhaps be one of the most difficult countries in the world to do business in but those that are organized, well educated, have experience doing business and are well funded can prosper here as I have proven. In fact, my consulting company helps many foreign individuals and businesses do business here properly and efficiently.
I have posted on other message boards on this subject so to save time I'll just cut / paste my comments here on the business environment.
____________________________
I am an American and I moved to Argentina last year. I came down over the course of 2.5 years 15+ times before I moved here permanently. I find the Porteños very educated and friendly. However, it is a totally different world being in a city like Buenos Aires as a tourist and another living here and operating as a business.
Before moving down to Argentina, I read that Transparency International, which is a well respected organization listed Argentina as one of the most corrupt countries in the world to do business in. http://www.transparency.org/cpi/2004/cpi2004.en.html#cpi2004 I thought to myself there had to be a mistake. Why would they write this about a country I loved so much. How could Argentina be grouped with countries like Libya, Ethiopia, Kenya, Angola and the Congo??
Let me tell you something. After living down here and doing business with these locals I can tell you that I'm surprised Argentina isn't ranked further down the list. It is sad to say but the way many businesses here do business is almost criminal. The truly shocking thing is most businesses have done business like this for so long --this is all normal to them. They don't know another way to do business. The Porteños always try to compare themselves to their European descendents but from a business perspective they have more in common with African nations like the Congo, Angola and Ethiopia.
There is no sense of ethics or loyalty for the most part. There are exceptions to the rule but many locals try to extract as much as they can out of the first/only transaction. They try to make as much as they can in the beginning and they don't worry about a longer term mutually beneficial relationship in the future down the road. This is perhaps the biggest challenge I have doing business here.
The reality is that the vast majority of companies here in Argentina would be bankrupt or go out of business in as little as 2-3 months in the USA or the UK. In the United States companies that operate like this quickly go under and are replaced by companies that are organized, ethical and offer good customer service and strong relationships with clients that last for years. That is very rare here. Many companies here think they are doing you a favor by spending money with them or giving them your business. They are so short sighted here. It's truly unbelievable.
Many savoy and intelligent businessmen and women have emigrated to the United States and Europe because they could not do business in their own country. Not only do they not trust the government but they don't trust one another. Family fortunes have been made but then lost due to rapidly changing laws, market conditions or outright theft. It is scary to think about but it is not like the United States. There are not stories after stories of how people made fortunes. There are far more tales of how people lost their shirts. One successful Porteño, named Roberto, who owns and administers www.travelsur.net emigrated to the US emailed me the following, "Argentina, for the most part, is the closest thing to the wild west anywhere, aside from some African countries. And chances are it will forever remain like this, in between short periods of calmness." I couldn't agree with his statement more.
Many locals are blind to this type of behavior and they believe this is how business is done all over the world. The Porteños that have studied or worked abroad in the USA, UK, Asia or other parts of the world recognize this defect of their own country. My doctors, attorneys, bankers, accountants and friends all studied or worked abroad so they understand how difficult it is in their own country. Many meetings I go to on a daily basis the locals apologize ahead of time for the system here in Argentina.
However, this kind of behavior is exactly what has caused my companies to grow so quickly. Americans and Europeans don't like doing business in this fashion. Individuals and investors that are flocking to Argentina do not trust the locals (for good reason) so they have hired me and my company as a consultant to assist them. It takes more than a good idea to evolve and create a viable business here in Argentina. It takes capital but it takes a good knowledge of the kind of business environment that is in place here. Many foreigners pack up and go home very quickly because they are not accustomed to working like this. They were not educated on how slow the system is here and how much red tape there is. They have never before operated in an environment where there is no loyalty, ethics or professionalism.
Those with a solid business background that have operated in the USA / UK / Europe / Asia, that have a good education and understand business and long term relationships, and are well funded are going to become dominent leaders in their respective fields here in Argentina. The key is having a realistic expection before you come of what the business environment is like. There are many opportunities in Argentina for a foreigner with a good head on their shoulders and a good business plan. There is no hope of coming to Argentina and getting ahead by being an employee. You MUST start your own business here to thrive.
While I am fully aware that it is impossible to change the system on a massive scale, my goal is to create businesses and help others create businesses that will fundamentally help change the business community in Argentina. Since the dawn of time -- no matter how much corruption there was in a society, companies with a solid business model that operated efficiently and properly and were well funded, not only excelled but they caused other companies to rise to the occassion.
______________________
MCSE was correct that it is less expensive to run a business here than in the USA / UK and other parts of the world but the market is smaller for most products. I have meetings every week with foreigners that seek my consulting on their business plan. 98% of them are very bad and wouldn't make it here. Or if they did, it wouldn't be worth it for them because the income would be too small. You have to really think things through before deciding to try to start a business here.
There are great ideas out there. I have thought of several but I'm just limited by time since I'm working a ton as it is. Those that are planning to move here and do business here need to really have a good game plan. Make sure you have excellent advisors, lawyers, accountants and bankers. This will go along way to help you achieve your goals.
Maybe my other posts will help out as well so I'll post them below as well. I've been emailed over the years that my posts have helped many. I ask for nothing in return. Just hope it helps and if you receive some benefit then "pass it on" and post some other useful information for other future readers.
____________________
Importance of a Solid Business Plan and Business Model.
Perhaps the most important factor in the success of a company in any country, but especially Argentina is coming up with a solid business plan. Everyone has great ideas but how many people follow through with those ideas? Not many. In a country like Argentina, it takes much more than a great idea to make it. You must formulate a business plan and keep working on it until it is perfect. Even after it is perfect, pitch your business plan and business model to all your business associates, lawyers, family and friends. Talk to your acquintances that may work for financial institutions as well. Present your business plan to every single one of them until every single one of them tells you that you have a good idea that they deem to be viable. If even one of them points out flaws in your plan, keep changing it until it is perfect.
The moment of truth. Once you perfect your business model and everyone tells you how great of an idea it is, ask them if they would want to become an investor in the company you were forming. If it is such a great idea and you thought your business plan was solid and you pitched it correctly, you should have people interested in what you are trying to put together. If you just get a few people that say they would invest you have accomplished something. Once you make it through all those steps, don't move forward unless you are well funded.
Put some serious time and money into researching your business plan. In my quest to do business in Argentina, I came down to Argentina about 17 times over the course of 2.5 years. Each trip I would make a few contacts. More than anything, I wanted to learn how things operated here. It is imposible to understand just how rotten the system is until you are working here on a daily basis. It is not just one segment of the work industy. It is rampant problems throughout the system.
There is no such thing as "easy money" here in Argentina. I am routinely working 12-14+ hours a day. Although I tested the waters back in 2002, I didn't move down to Argentina permanently until August 2004. Because of the hard work and dedication over the course of 2+ years putting together a solid business plan, after only 9 months I am already getting unsolicited offers from individuals and corporations from outside Argentina to purchase my company and several of my owned properties.
Don't get discouraged by others that tell you that you are foolish to want to try to start a business in South America. Everyone told me that it was a mistake to quit a lucrative career in the USA and move here. Now, after only a few months, those same people are telling me that they are envious and wish they had the courage to follow their dreams as I did. Anything is possible but remember that it takes a solid business plan, dedication and a lot of hard work, and enough capital to get started and operate for the first few years.
Keeping your Cash Offshore.
Offshore deposit accounts should form the foundation for any expat. Offshore accounts are not used to beat bond or equity markets - they won't. Offshore accounts are used because they offer both safety and liquidity.
Before moving to Argentina, you will be well aware that you will not want to deposit any significant amount of money into the local banking system. The locals have been swindled out of their savings by their own government. While it will be necessary to open local you$s dollar and Peso accounts, it will be for convenience purposes only-- for things such as paying bills with online banking.
With the tremendous power of the internet, gone are the days of using a traditional bank with high fees. Unfortunately, due to historically low interest rates, deposit accounts -normal or offshore- are paying out very low interest rates. Still, with all the advantages it is a must for an expat doing business in Argentina. Deposit accounts are both safe and secure. Offshore deposit accounts should form the basis of your financial life.
Set up an account with plenty of time before you move to Argentina. Allow time for any checks, ATM debit cards, credit cards, PIN numbers, etc. To arrive at your USA address before you move. Making sure you have these accounts should be your priority and the one thing you concentrate on doing before you move.
It is not necessary to worry about setting up long-term investments in the first 6-8 months of moving abroad. You might decide that Argentina is not for you or you simply can't work in this type of business environment and move back to your home country. This initial 6-8 month time frame gives you time to see how things are going. Put any spare cash into your deposit account during this time.
It really does not matter which bank you decide to use. The important thing is to keep your cash offshore out of Argentina.
Power of Technology.
The power of the internet and technology should be utilized to the fullest extent. It is wise while putting together your business plan to set up everything you will need to stay connected in Argentina. Just because you are leaving the United States does not mean you will not need to stay connected to the United States. Odds are you will have clients, business associates, advisors, and friends in the USA that you will need to operate efficiently in Argentina.
Vonage. Com.
Perhaps one of the most important technological advances for the expat moving to Argentina is the VOIP (voice over IP) phone service. It is amazing technology that allows you to make / receive unlimited calls to / from the USA for a flat $25 per month fee. You can go to Vonage to sign up for the service. Email us before you sign up if you would like to receive one month free. After you sign up, you will receive a small box that you simply plug into a high-speed Internet connection here in Argentina (or anywhere in the world)
As long as you have a high-speed connection you can plug in your IP phone and you can make and receive calls unlimitedly to the USA and Canada. Service is quite good as long as you have a good connection. You can sign up with the area code of your choice so you can get a number from any USA city. You can also sign up to receive a toll-free number (for an added fee) if you have many clients in the USA.
EFax. Com.
Email is powerful but there will probably always be a need for faxes. EFax is an amazing service that allows you to set up a USA fax number in the area code of your choice. Faxes received at this number are automatically sent to you via email to you in Argentina, or wherever you are traveling. You select an email address you want the fax delivered to. You can receive faxes from anywhere in the world you are traveling to.
Not only can you receive faxes via email but you can also send faxes via email or online via their website with your efax number and PIN number. Efax will convert your document to a fax and they will email you a confirmation so you know the fax was sent. It is amazing technology that should be utilized. Service is very affordable at $13 per month.
Paperless PO Box. Com.
Paperless PO Box is a great service that allows you to have a USA address even though you are living in Argentina. This company gives you a PO Box address in the USA. All of your mail is scanned by a computer and then they email you a copy of what they scan. Keep in mind that if you need a physical copy of the mail or it is an important document, you may want to have that mail sent to a family member or friend in the States. The US Postal service will forward all mail to you to Argentina free for a one year period although the mail service here in Argentina is not too reliable.
This service is wonderful for most documents that you don't need the original document. In this day and age of the internet, there are very few documents where you need the original copy. All the scanning of the physical mail is all automated by machines so there is never an actual person reading your mail. If you do need a particular document, their company can overnight you the document. The original mail is preserved for 90 days and then automatically destroyed if you do not request it. It is affordable at $30 per month.
PayTrust. Com.
PayTrust enables you to send payments to anyone in the USA. Even though you are living thousands of miles away in Argentina, odds are you will still have bills in the United States. Taxes, professional services fees to attorneys / accountants / advisors, credit cards, etc. Are a part of most expat's lives no matter where they are living. We all have bills in the USA and this company allows you to pay these bills with no hassles effortlessly.
You get a user name and password and log in to your account. You can see your account balance from your bank and send payments to anyone in the USA. This is far different than online bill paying with your bank. You actually get a PO Box address that you can send your bills to. All bills are scanned and you can see these bills online. Paytrust allows you to even pay property taxes online which is not possible with traditional online banking. The cost is reasonable at $13 per month.
Importance of Relationships with Trustworthy Local Contacts.
Another key to the success of starting your business will be creating relationships with locals whom you can trust. That is more difficult that you would think. A good attitude to have in Argentina is trust NO ONE until they prove they can be trusted. There are only a handful of people I trust here in Argentina. Still, it is impossible to create a business with out the help and assistance of local contacts. It is simply impossible to start a business in Argentina without good advisors, accountants, lawyers, banks or financial firms and local business owners.
As previously mentioned in the "Business Environment in Argentina" section, it's a jungle here and you will fail if you don't take the time to set up relationships with good local contacts.
There are various ways to structure your corporation but most corporations require that you have at least another partner. You can't form a corporation with just one person so naming only yourself is not an option. There are ways to form a company with just one person but they are not the best option because there are limits to the amount of money the company can earn in each calendar year. It won't make sense for most entrepreneurs starting a company here.
One common corporation here in Argentina is the equivalent of our LLC (limited liability corporation) in the United States. It is called a SRL here. It stands for Sociedad de Responsabilidad Limitada. You must have at least one other partner in your corporation so it is essential that you have someone that you can trust 100% because at least on paper that person will own 10% of your company.So would this short sighted grab it while you can attitude not also be present in the chicas of Argentina? Are they unethical as well?
So would this short sighted grab it while you can attitude not also be present in the chicas of Argentina? Are they unethical as well?It depends. If you expect punctuality, they aren't that "professional" (I remember LMAO when some mongers tryied to schedule their first day in BA from the US pretending that chica #1 came by 11 AM sharp, the second by 1 PM sharp, etc)
If you expect warmth and GFE, they are surely more "professional". The paradox in this case is that, when very close human relations are involved, you cannot set the professionalism rules of a manufacturing facility to such personal services.
Same differences are observed when you go to a MD here and in the US. Argentine doctors are MUCH more warm to their patients and devote you much more time. That may entail a not that closely followed patient scheduling (after all, there is a trade off)
Hope this helps,
Andres
Headgames,
You are welcome. I'm glad you liked the posts and find them to be true. I think you will find that any honest local that has any sense or that has done business outside of Argentina in developed countries will agree with me. Those that take offense are probably locals that have never done business outside of Argentina. Andres and others that have studied or lived abroad can tell you that I am right in my posts.
After over 1.5 years of living here full-time and growing businesses and buying more residential real estate in BA than any other individual in the world, I can tell you that I stick by what I originally posted.
Now that I do so much volume the people that normally try to cheat is getting lower and lower. What I have done from the very first day of moving here is any companies or individuals that I feel are not fair I never use again. When I catch them trying to cheat with an inflated price I never use them again. I can give dozens of examples. The people here just don't use common sense. Their mentality of cheating is just ingrained in their normal way of doing things. I am not saying everyone here is like that. Lots of good honest people and companies as well but overall I find the system here totally inefficient compared to the USA / UK.
The really funny thing to me is when these companies are making a fortune and then you keep giving them business they don't strive to keep up the quality to keep getting business. They actually progressively get worse over time. I see the same things with various people across a wide array of jobs. One example is an architect we were using last year. I gave him so much work as I was buying about 2-3 properties per week. Most needed renovations. This guy was making a fortune. In fact, he went out and bought a small company to keep up with the demand with the work I was giving him.
Over a short amount of time, he bought a new truck, I noticed new clothes, expensive watch. Great. No problems. You would think that if he was getting 80% of his business from a source that paid him on time, had no plans to slow down, etc. He would really work hard, keep prices low and be competitive. This guy I noticed with every quote, raised prices, quality of work was getting lower, etc. The last straw was one day when I looked at the quote and I saw a price for something that went up 40%. I'm not sure if this guy thought I didn't actually look at the quotes or know anything about business. I simply called the manufacturer where he ordered the part (in this case a shower) and I found he was marking up his price to begin with.
I immediately ceased all work with him and told him that I can't do business with people that I can't trust. He was calling apologizing for weeks and weeks and weeks. This is the kind of thing that can give you an idea of the mentality here.
In the USA if you had a "whale client" that was giving you a significant / major portion of your income you would do everything to keep them happy and try to do business with them for many years instead of cheating them. I can give so many other examples.
Actually though, more and more foreigners are coming in and taking advantage of these inefficiencies in the system here. Some estimates from the newspapers and private sources have posted that as much as 50% of the luxury property purchases since the crash have been by foreigners. I know this to be true as I deal with big corporations from the UK, USA, China, Australia and other parts of the world that are buying millions and millions of dollars of properties here. I see no slow down in sight. Much of the Buenos Aires property market is now in the hands of foreigners. In fact, more and more of Argentina is in the hands of foreigners. Still, I know many, many locals that want to buy apartments but just can't find enough supply.
I don't see any slowdown to this. I think you will find Buenos Aires a decade from now a much different Buenos Aires that you had since the devaluation.
Good luck all.
Saint
http://www.ilbookstore.com/product.php?productid=16133&cat=103&page=1
Bairespirata
07-08-06, 05:10
This post is not refering to business directly but to how Argentinians identify themselfs and how they make social actions. I think it is in this field you find the answers about how this country has fallen from 70% of the US GNP / capita to 25% during seven decades.
1. Argentina had an economy who were more of a passenger of international growth than a vehicle during the golden age. When cirumstances changed the country were unable to change into producing other products that could have attracted consumers / companies in the rich countries. The industriuos but also very lucky period until 1929 is the reference for the Argentinians. They think that this era reflected the country's true potential and that after that the country has been victim to internal and external conditions that, more or less, have been "bad luck".
2. Argentinians did never accept the fact that the country had been lucky during some decades and now where to face a new era, which had to come, sooner or later, just like the oil-rich nations doesn't do today. They walked in another direction, that of Import Substitution Industralization governed by a strong state overlooking everything.
3. When finally leaving this system, Argentina made an heroic attempt to keep to peso at 1:1 to the dollar to keep the inflation low. It worked. But then people started to identify themselfs with this artificially created currency. They travelled abroad and felt rich. At the same time the foreign debt increased from year to year up to a level were the debt became insurmountable.
4. All my Argentine friends, all well educated, and a lot of people here refers to the 1:1 era, like that currency level was the original one and that the IMF is the institution to blame for the 2001-2002 crisis. That only tells me one thing, after having listened to similar statements from people with totally different backgrounds; Argentinians are dreaming nationalists. Argentina is the best country in the world and when it goes wrong others are to blame!
5. The Argentinians also search the sensation. The sensation of the peso being 1:1 to the dollar, the sensation of winning the World Cup. They are not people who want to plan for years to make a small profit. They live in a capitalist society, but act as persons living in a traditional (pre-capitalist society)
5b. Of course, I'm making an over-generalization, many are hard working and long-term investment oriented, but I also think many in this cathegory has left the country.
6. A famous Italian writer recently wrote in La Nacion about the importance of having strong neighbours. Argentina had none until Brazil went strong economically during the last decades. The country also lacked this control mechanism on the political and military level, in sharp contrast the Europe. These historical circumstances might have been those that have made it so easy for Argentina to adopt old fashioned and contra-productive policies, that for decades have proved to be popular and initially effective, but in the long run have created crisis after crisis.
7. A society without strong and long-lasting institutional rules learns the people to be short-sighted. Everyone is looking to get profit now and here, because tomorrow it might too late. This has been a historical process and is therefore now a part of the Argentine mentality.
7b. The need of feeling "we are the best in the world", partly created by the lack of strong neighbours, will continue to make the Argentinias easy targets for populistic politicans.
8. Kircher and the future. For me he represents only the last of many politicans that are making the same old typical Argentinian mistakes again. His politics attracts the Argentinians because he resembles a strong man without fears. But it's too soon after the disastrous 2001-2002 crisis to pick fights with everyone and at the same time embrace persons like Venezuelas Cháves.
NOTE: OPPENHEIMER is an Argentine journalist who is.
Highly respected regarding latin american politics here in Miami. Miami, in many ways, is as much part of latin america as the good old usa. This is his work in the Sunday, miami herald.
-------------------------------------------------------------
A Kirchner may win, but glory days are over.
BY ANDRES OPPENHEIMER.
aoppenheimer@MiamiHerald. Com
BUENOS AIRES -- Argentina's political winds are changing. Unlike the last time I visited here last year, left-of-center President Néstor Kirchner no longer looks like the almighty leader who will head this country -- directly or behind the scenes -- well into the next decade.
Only a few months ago, the conventional wisdom in this capital was that Kirchner's wife, Sen. Cristina Fernandez de Kirchner -- helped by four consecutive years of strong economic growth and her husband's high popularity ratings -- would run in the Oct. 28 presidential elections, and win by a landslide.
The idea, people close to Kirchner's inner circle said, was that Cristina Fernandez de Kirchner would serve one four-year term, then allow her husband to run for either one or two consecutive terms. This would have allowed the Kirchners to rule until 2015, perhaps even 2019.
But a series of recent political setbacks suggest that the ''K-phenomenon'' -- as pro-government media referred to Kirchner's 70 percent popularity ratings after he won the 2003 election with only 22 percent of the vote -- has already peaked, and is losing steam.
CHANGED HORIZON.
While pollsters expect the president or his wife to win the October elections -- it's not yet clear which of the two will run -- few are willing to bet that the Kirchners will be able to hold as much power as they have over the past four years.
''Ninety days ago, we all thought we would have Kirchners in power for the next 16 years,'' says Rosendo Fraga, a leading political analyst who heads the Center for a New Majority. 'Today, we think that one of them will be elected, but will face a very difficult time in office. The political horizon has changed.''
Indeed, Kirchner -- whose foreign policy over the past two years has moved increasingly closer to Venezuela's narcissist-Leninist President Hugo Chávez -- suffered a major political defeat earlier this month.
Despite Kirchner's enthusiastic support for his education minister, Daniel Filmus, in the June 3 first-round election for the politically important job of mayor of Buenos Aires, Filmus was trounced in the polls. Center-right opposition candidate Mauricio Macri, president of the Boca Juniors soccer club, won the first round by a 22-percentage-point margin, and is expected to easily win in the second-round vote next Sunday.
OTHER SETBACKS.
Also on June 3, Kirchner's candidate for governor of the southern Neuquén province lost by 13 percentage points. In October, in what was seen as Kirchner's first major political defeat, the government lost a key state constitution referendum in the northern province of Misiones.
In addition, corruption scandals -- including bribes apparently paid by executives of the Swedish construction giant Skanska to government officials -- are for the first time reaching the president's closest aides. And power outages are raising public questions over whether the government is taking advantage of the country's economic recovery -- due to record international prices for Argentina's commodity exports -- to fix basic problems.
Over the past two months, the president's approval rating in this capital has fallen to 35 percent, and his wife's to 25 percent, the daily La Nación quoted an anonymous pollster as saying last week.
Roberto Lavagna, a former Kirchner economy minister who is running as an opposition candidate in October's presidential elections, told me in an interview that Kirchner's days of glory are over. Now, the president's strategy is to keep any serious opposition candidate from capitalizing on the growing public discontent, he said.
FOE'S CLAIMS.
According to Lavagna, the government is putting pressure on television networks to keep him off the air, because he is the only opposition candidate with a nationwide political machine. I called two close Kirchner aides for a comment, but they didn't call back.
''I've spent three months without being able to appear in prime-time television,'' Lavagna said. 'The degree of government pressure on the media is greater than at any time since 1983.''
My opinion: One of the Kirchners will probably win the October presidential elections, and Argentina may have four more years of low-intensity Chávez-style populism. But Kirchner has lost his aura of invincibility. Pro-globalization, pro-investment candidates are likely to win key city and state elections, changing the country's political horizon for the first time in several years.
It's funny I've found back this thread back.
I've just wrote an article about my first experience doing business in Buenos Aires and it's here, just wrote it yesterday http://www.barts.com.ar/barts/articles/articles_detail.php?recordID=doingbusiness
CarneValistico
07-12-07, 19:46
Hey Hunt,
Could you borow me your G5 with at least 3 stewardess, and please I drink only Taittinger 6 degress cooled.
Man, you are an ironic son of a *****! Kompliment, write a book with short stories like that. You will make a bucket full of money, to be tranfered to your ofshore account - sorry Saint;-)
RichiBoone
09-14-07, 03:06
What about buying manufactured goods in Argentina and bringing them into the US / UK? I can find out the "official" issues, export taxes, duties, US tariffs just by going online and making a few calls.
But what about the "unofficial" issues, graft, hidden charges, other things one doesn't usually run into in the states? What questions don't I even know to ask?
I know contracts must be written in Spanish. How did you find an attorney who is trustworthy and effective?
I do not speak much Spanish but have an aquaintance in the U. S. who is fluent. Should I bring her with me as an interpreter? (Our relationship is strictly business, BTW.
Whatever you wish to share would be appreciated.
Thomaso276
09-14-07, 11:03
If you pay graft overseas you are violating a USA federal law. Bottom line, not much made here worth shipping to USA. Chile is the big free trade partner, Brazil is the biggest economy and Uruguay is on the way up.
Argentina is not a business friendly place for foreigners.
RichiBoone
09-16-07, 07:32
Not ignoring your advice about "not business friendly". At the same time I'm not ready to give up yet.
As far as a good product, what about finished leather goods?
Not ignoring your advice about "not business friendly". At the same time I'm not ready to give up yet.
As far as a good product, what about finished leather goods?I see many South American immigrants where I live thinking about importing leather goods and such. They face some barriers, such as distribution channels, points of sale (chains, eBay, etc) local tastes, etc.
I know of people who succeeded in importing socks from Argentina, but they had to work hard to get the attention from the Macys and such.
Briefly, it's possible, but not as easy as sending a container and having retailers fight among themselves to take out all of your imports at the port of entry. You need to develop contacts (networking, etc)
Hope this helps,
Andres
Thomaso276
09-16-07, 11:22
I always wanted a genuine pair of imported Argie socks!
Oh, good, I'll bring some down when I come.
What about buying manufactured goods in Argentina and bringing them into the US / UK? I can find out the "official" issues, export taxes, duties, US tariffs just by going online and making a few calls.
But what about the "unofficial" issues, graft, hidden charges, other things one doesn't usually run into in the states? What questions don't I even know to ask?Argentina is not competetive on new goods for export. Taking goods to the value of US$50K out by way of 20' containers is the most efficient. On costs, not including fixed overheads, are about 25% of the US$50K and must be done by a licenced exporter and through a licenced fiscal warehouse. The IVA credit, which is 21% of the purchase price, is pocketed by the exporter and is sunk money as far as you are concerned. There are other requirements and you can PM me if you need.
Looks like a nice website:)
So if you make 10.000 dollar a year on rental you need to pay 2100 dollar to the AFIP?
I own some rental units in the USA, their paid for just like owning property in Argentina, its all up front cash money at the time of closing. If you own anything down here, you'll own it free and clear.
Incidently I use the rental income for Mongering and paying airfare and rent in Argentina.
But here's the difference, other that all the poltitics, inflation, economy, corruption and the like.
Suppose for any reason I need a $100,000 or so, I go down to my local bank, sign the paper work and they put the money in my account, sometimes that very same day at a fair interest rate I can afford.
If I had that same situation in Argentina that equity would be worthless since even if I could get a mortgage in Buenos Aires, which I couldn't, I'd be paying such a userous interest rate I couldn't afford the loan. See my local Bank, no matter how much they like me is not going to loan money on an asset in Argentina.
Something for you Argentine real estate investors to think about. Saint is "Strokeing" himself and posting thats written below is pure bull shit.
Exon
No matter in what floor you buy, no matter if they loan you or not, the only way to getting your investment back it's buying for a good price. When you buy for a convenient price you can always afford to get out: without losing money, losing a very small amount and even making some profit. That's the important thing. Of course there ar people who believe they know everything about everything.
. And I'd charge $275 per night.US$8.250,00 per month, wow, pretty expensive. Isn't it?
I rent an apartment to an embassy officer, they pay high rates for a high-end product, only US$2.300 per month, the actual value of the property it's US$450.000
If you guys want to invest in world-wide real estate in a diversified way, the last thing you should do is to buy apartments in Buenos Aires (or anywhere else)
There's an Exchange Traded Fund which invests exclusively in non-US real estate companies. You'll be diversified over 100 different companies in 100 different countries. It's sponsored by Wisdomtree, and the New York Stock Exchange symbol is DRW.
I actually own a small amount of this, so caveat emptor.
http://news.yahoo.com/s/nm/20071106/wl_nm/argentina_coins_dc
Exon
That's a good article and very true. Although, it's not quite the horror that they are painting it to be, at least all of the time.
I most often buy a pack of cigarrettes at a kiosco and it's either 3.60 for a soft pack or 3.75 for a hard pack. It really doesn't matter whether it's a $20 or a $5 that I give them (or sometimes even 2 $2s) as far as whether or not they are going to give change because they have to make change with a 1 peso coin, and 25 or.40 centavos to get up to a bigger bill.
There is a kiosco around the corner from my apartment that absolutely refuses to give change, but there is another one on the other corner where I've never had a problem. In fact, I rarely have problems at kioscos, usually just the one on the corner that refuses to give change.
Also, I talked to one kiosco owner on Cordoba that wouldn't give change and he said it was because of the the bus stop - that people would always come in a buy a.20 centavo candy or something get change, and he used to have a line of people stretching out his shop waiting to get change, and he had to start saying "no". Funny thing was - I had tried to get change at this kiosco because I needed change for the bus. Since then, I try to avoid kioscos near bus stops if I don't have change or don't want to give it up.
With taxis, it's not all that often that there is a problem because it's pretty common for the passenger or the driver to let the change go. I rarely carry much change with me and have never really had a problem, as long as I was willing to let 50 centavos or so go (roughly 16 cents US) and most taxis also are willing to let that go, so it is give and take.
I once had 500 peso in small change in my home. When I go home I pay everything with coins.
It's fun, it makes everybody happy.
Thomaso276
12-18-07, 00:09
I did not know where to post this, but a friend sent me this photo and email, he is here in BA and says this picture was taken while workers were installing iron posts to keep people from parking infront of a bar. Please note where the workers van is parked and how it will be able to leave - or NOT.
I did not know where to post this, but a friend sent me this photo and email, he is here in BA and says this picture was taken while workers were installing iron posts to keep people from parking infront of a bar. Please note where the workers van is parked and how it will be able to leave - or NOT.Great photo and really I am sure it could happen anywhere.
Jaimito Cartero
12-18-07, 04:48
I've seen similar things, and most have a bolt, or a lock on the bottom, and you can remove, or unscrew the post.
Those aren't Buenos Aires road signs!
No country where the courts fail in "the protection of the citizens with a fair and balanced manner of interpreting and applying the law" can ever become a respected country.
My wife, an Argy, bought a nice, large apartment in Mar Del Plata in 1990. She has had to sue the management company almost every year for outright theft, falsifying documents, etc. Because the management company family includes politically powerful ex-City Administrators, the documents get "disappeared" from case files, entire case files "disappear", and very seldom ever come to trial. When they do come to trial, my wife wins. Yet, the opponents have had things go their way so long, they repeat the same thieving, dishonest behavior that brought them losses in court in previous cases. And, so it goes, year after year. They never learn and they never quit trying, arrogantly expecting things to go their way again, regardless of prior losses. And, they generally have a 50/50 chance of winning the next time.
My advice: If the business you are considering has a significant element of risk regarding litigation, reconsider. Unless your Argy partner has significant political clout, you should not expect a fair shake. While I hope to avoid offending anyone on this Board, folks need to know of our negative experience.
I have been traveling to Argentina since 1972. I have been living here since we moved here from the US in March 2008. We have not found a good business opportunity here yet. I keep myself busy with some part-time things, mostly in the US, while waiting for some good business opportunities to pop up. Since I have an Argy wife as a business partner and am fluent in Spanish, I have an easier time qualifying for businesses here than those of you who are having to go it alone. So, if I can do a free consulting job, or just do some friendly brainstorming with anyone who needs some help, shoot me a PM and I will try to share my humble experiences.
Our sources of income are from the US. We have family and extended family in the US that help us with our business needs there. A lot of what Saint had to say we had implemented because we have come to the same conclusions he has. We have been thinking about these issues since the 1970s.
One example: Keep your money in a different country and just transfer funds in as needed. We have an HSBC account in Miami Beach where our collections and deposits go. Then, we use PayPal and internet banking to handle the US obligations. Also, having a daughter who is an attorney in a Miami Beach international litigation firm is a big help:^) We go three blocks from our MarDel home to one of the local HSBC banks where we have another account. We request a free transfer of funds from the Miami Beach account to the MarDel account, et voila, we have the money we need locally, paying the normal bank rate to convert dollars to Argy pesos. Many excellent posts on this forum can bring you up-to-date on how a non-citizen can get a bank account here. No ATM fees :^D
Saint, I hope there is a series of posts you can share with us. You gave us some insights on some important issues. I promise to contribute to the business thread as opportunities develop.
One idea that works for us is Skype. A year ago it wasn't such a good deal, and we were leaning toward Vonage. Now, we have no proprietary hardware, just the Skype software which works anywhere there is a WiFi connection for a laptop. We have Fax / pay per page receive / send, a Miami Beach 305 area code phone number, and free calls to any land line or cell phone in most countries (in Arg, only Cordoba and BsAs are free. The rest of the country is $.037/ minute w / VAT) for a total of US$35.95 for 3 months. All Skype-to-Skype calls are free, regardless of whether any other services are used. We are amazed that the VideoPhone call capabilty is available and can be used without ever paying Skype a dime. We think it's a good deal.
Suerte!
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