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Latin American markets can offer you exceptional business opportunities for your company’s growth as well as commercial success. However, before venturing on starting operations in Latin America, you should analyze the advantages of investing in this region and consider some relevant factors when hiring personnel in Latin America.
Why is Latin America an Attractive Region to Start a Business?
Latin America and the Caribbean has become one of the most attractive regions for foreign investments, encompassing 33 countries―with some of the most important emerging economies in the world such as Brazil, Mexico, Chile, Colombia, Uruguay, Panama, and Peru.
According to a recent report by the United Nations, the gross domestic product (GDP) in Latin America and the Caribbean is forecasted to grow by 1.7 percent during 2019 and 2.3 percent in 2020. Even more, the foreign direct investment (FDI) in the region has increased over the last five years, with inflows going up by 13.2 percent year on year. This high performance was mainly attributed to Mexico and Brazil.
Factors to Consider When Hiring Personnel in Latin America
Spanish is spoken in almost every country of Latin America―except for Brazil that uses Portuguese as the primary language. Even more, research by EF has revealed that most of the Latin American countries have scored a low performance when it comes to English skills. The average English skills in adults have experienced a decline since 2017.
As you will have to hire a local workforce for your business expansion, it is essential to partner with HR experts who can perfectly communicate and interact with your personnel. In this sense, an International PEO can offer you multiple benefits as we prepare job offers in the target language, conduct interviews, and even manage the onboarding process.
Working Culture
One of the main aspects you need to acknowledge is the working culture―which varies depending on the place. In some Latin American countries, such as Mexico, Colombia, Uruguay, and Costa Rica, you will find that employees should work 48 hours per week. In Chile, employees work 45 hours over a six-day week. So, if you want to comply with local labor laws and regulations, you will have to ally with a PEO.
Also, it is recommended to know local preferences when it comes to employee benefits. The Latin American workforce tends to prefer better incentives in the workplace. For this reason, an International PEO can assist you in providing incentives like private medical insurance, life insurance, office leasing, and even visa sponsorship.
Which are the Top Industries in Latin America?
In 2018, manufacturing consolidated as the primary target sector for foreign investment representing 47 percent of the FDI inflows. In the case of Mexico, companies can take advantage of the low-cost of manufacturing―with high-quality services―in comparison with many other economies. Also, Colombia offers benefits in production with cost-competitive opportunities.
Food and Agriculture
In Latin America, the agricultural and food sectors also represent a great opportunity for investment. For instance, Argentina ranks as one of the leading countries in the world with higher production and exports in the food/agricultural industry―like cereals, animal/vegetable fats, meat, fish, oilseeds, and animal fodder.
Services and Products
The retail industry had a growth in Latin America, especially in retail e-commerce sales―representing indeed the second-fastest-growing market globally. Some of the top best-selling services and products in the region are beauty and personal care products, energy drinks, pharmaceuticals, laptops, smartphones.
Nonetheless, other top industries in Latin America are:
- Tourism
- Mining
- Chemical products
- Transportation
- Construction
- Clean energies (Natural resources)
