by Ana Diaz, Head of Latin America International Subsidiary Banking, Bank of America Merrill Lynch
For companies expanding into Latin America, there are many factors to consider. But the real key to enabling a successful transition is upfront preparation. Without it, companies may find themselves wasting valuable time and money dealing with obstacles as they arise.
What to consider
When expanding into Latin America, the first decision to be made is on which country, or countries, to focus. Decision factors will vary by company and usually encompass variables such as the company’s operating structure and industry sector.
Typically, when choosing a country, companies will consider market specific factors, such as the economic environment. But a country’s economic performance is only one dimension. It is also important to consider other aspects of the country including whether it has a stable political system, the cost of doing business and the infrastructure that exists.
If a company has manufacturing output, for example, distribution is a consideration, not only within the country but also internationally. If the company has a distribution centre or warehouse, it may want to look at options for storing its goods, such as the tax-free zones that exist in Costa Rica and Panama.