What you need to know about setting up a business in Latin America

To dramatically increase growth, companies must look to different territories and markets. And each has its own regulatory requirements, including for payroll and compliance. For firms, this presents a set of challenges that can weigh on their administrative responsibilities and potentially create difficulties that could lead to problems with personnel and their companies.

That's why it's so important for companies to get expert external assistance with payroll and compliance, especially in situations where small satellite offices are set up overseas and in multiple locations – creating an administrative headache for those trying to sort it all out themselves. 

Latin America 

Take, for instance, Latin America. Many U.S. firms have established presences there to boost their sales and profits. But Latin America is a testing place, and while it remains attractive for U.S. businesses, it is one of the most complex regions in which to operate. The region has high levels of bureaucracy and a large number of trading rules, combining to make doing business there a daunting prospect if you don't have some help along the way.

Last year, San Francisco-based Webster Buchanan Research conducted a wide-ranging study on the difficulties overseas firms face with payroll management in Latin America. The study was sponsored by TMF Group  and involved discussions with executives from firms of all sizes with operations in Latin America but mostly focused on Argentina, Brazil, Colombia and Mexico. What they found were not just a few challenges for U.S. firms, but many others.

Differences In Payroll Practices

The main difficulties facing foreign firms included payroll reporting and general payslip requirements, as well as payroll cycles, complex methods of calculating salaries and benefits, and exhaustive requirements for keeping records (including the storage of records). There was also a degree of uncertainty for U.S. firms in Latin America about local legislation and how it should be interpreted, and many were encountering problems due to differences in cultures.

It's worth noting that in the annual TMF Group Complexity Index for 2015, Argentina was ranked as the most complex country for doing business, for the second year in a row. Brazil ranked second in the index, which examined 81 countries and territories across the globe. It shows that while for many U.S. firms, Latin America is an obvious choice for overseas operations, it's nonetheless the most difficult place for them to operate in.

Getting The Best Payroll And Compliance Help

TMF Group has bolstered its compliance services in Latin America with its recent acquisition of the outsourcing arm of PwC Brazil, Apriori. The local company provides services to foreign firms, ranging from human resources to taxation and accounting, ensuring they're in compliance with prevailing laws and regulations at all times. 

Making a decision to extend operations beyond United States borders is one of the biggest for any firm in the country. The risks are real, but the opportunities can be enormous. Getting the right payroll and compliance help from the outset and during operations is crucial to success. 

Read the full story at Forbes BrandVoice - TMF GroupVoice

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