Practical Tips For Staffing A New Entity In Latin America

Over the last 16 years, Harris Gomez Group has been helping companies from Australia, Canada, United Kingdom, South Africa, United States, as well as those in-between, expand and do business in Latin America. It is amazing to look back and see the different paths that companies take. We truly have an insiders view. Obviously, some companies are more successful than others with expansions.

One area that stands out whether a company is successful or not is if a good team is employed from the beginning. There are generally two choices when staffing a new entity - bringing someone from their home country or hiring a local team. We have put together some commercial and legal tips based on our experience that companies should evaluate to ensure they are giving themselves the best chance of success.

Using Expatriates

It is no surprise that the cost of bringing someone to Latin America can be substantial. They generally expect housing, transportation, return trips, healthcare, moving costs, private education and further support for their family. You better be sure that the employee is going to fit well with the new culture and surroundings, let alone being able to move the needle to get the new business producing profit. Bringing the wrong person can be an expensive exercise.

Bring someone that can speak Spanish. Preferably, someone that is originally from the country you are trying to enter as they will understand the local culture. Yes... that is correct, all the Latin American countries have different cultures, qualities, and personalities! A host of factors needs to be discussed before sending an expat. Get advice! You need to understand the risks and costs associated with bringing the person and potentially removing them if it does not work out. Foreign managers will need local work contracts. They will be employed under local labor laws which mean you have to follow those laws. Ignorance is not a good defense and can be expensive. Generally, it is a good idea to send expatriates to work in a Latin America country when there is an already existing business. A good example of this is when a company purchases a local company, expats can help the local management teams with technical areas or implementing certain systems/processes from the parent company. They are there to support and tend to be more successful in these roles. If you are starting a new entity, it is generally advisable to hire someone locally since you will need someone to...