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Things to Consider when Starting a Business in Argentina

Overview

Argentina is the 8th largest country in the world by land area and the largest among Spanish-speaking countries. The economy of Argentina is Latin America’s third largest and has been categorized as upper middle-income. In addition, Argentina provides its residents with a high quality of life and GDP per capita. In fact, Argentina ranks second, just behind Chile, in the Human Development Index among other countries in the Latin American region. The Human Development Index measures a country’s life expectancy, education and income and how these factors affect human development of its residents. The country benefits from rich natural resources, a highly literate population, an export-oriented agricultural sector and a diversified industrial base. Despite these positive attributes, Argentina is infamous for high levels of corruption, huge tariffs, exorbitant taxes and a lengthy and complex bureaucratic system. Argentina ranks 100 out of 178 countries in the Transparency International’s Corruption Perceptions for 2011.

 

Economy & Foreign Relations

Argentina has strong foreign relations. It is a founding member of the United Nations, Mercosur, the Union of South American Nations, the Organization of Ibero-American States, the World Bank Group and the World Trade Organization. Furthermore, it is one of the G15 and G20 major economies.

*** Mercosur: An economic and political agreement among Brazil, Argentina, Paraguay, Uruguay, and Venezuela which was founded in 1991

***Union of South American Nations (UNASUL): It is an intergovernmental union integrating two existing customs unions, Mercosur and the Andean Community of Nations (CAN), as part of a continuing process to integrate countries in the South American region.

***Organization of Ibero-American States: It is an intergovernmental organization, comprising the Portuguese and Spanish speaking nations in America, Europe and Africa.

Argentina’s main industry is agriculture. Below are its primary production.

3rd in the worldwide production of soya beans

5th in the worldwide production of maize/corn

11th in the worldwide production of wheat

Other major industries in Argentina include manufacturing, telecommunications and service industries.

Argentina’s main exports are mineral fuels, oils, residues and waste from food industries, animal and vegetable oils and cereals. It imports machines, vehicles, electronic and electrical equipment and organic chemicals.

6 types of businesses that can be formed in Argentina

1)      Sociedad Annima (SA)

Private companies limited by shares

2)      Sociedad de Responsabilidad Limitada (SRL)

Private companies limited by guarantee

3)      Sociedad Cooperativa

Free associations of members with a common social, economic and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise

4)      Sociedad en Comandita Simple (SCS)

Partnerships limited by guarantee

5)      Sociedad en Comandita por Acciones (SCA)

Partnerships limited by shares

6)      Sociedad en Nombre Colectivo (SNC)

All the members share risks and capitals on unlimited basis

Procedures required to establish a business

It takes at least 27 days to complete all the legal procedures which are necessary to establish a business in Argentina. http://www.doingbusiness.org/data/exploreeconomies/argentina/starting-a-business/

1)      Submit a request to reserve a corporate name using the reservation name form which must be submitted to the office of Corporations called the “Inspección General de Justicia”.

2)      Although a company’s bylaws need not be notarized, the signatures of the founding partners have to be certified by a notary public.

3)      The company must deposit at least 25% of the subscribed capital at the central office of the Argentine National Bank (Banco de la Nación Argentina). Proof of payment must then be obtained.

4)      The new company’s notice must be published in the official paper called “Boletín Oficial”. This publication fee ranges as it depends on the length of the notice and the kind of publication chosen.

5)      An incorporation fee must be paid at Argentine National Bank (Banco de la Nación Argentina) and submitted in the incorporation proceeding with the Public Registry of Commerce.

6)      Companies located in the City of Buenos Aires must register their by-laws and other documents related to their incorporation with the Public Registro of Commerce.

7)      Special books need to be bought and this purchase should be recorded at the Office of Corporations.

8)      Get a form from the Public Notaries College and have a notary public submit the company books

9)      Corporate manager needs to obtain a Fiscal Code (Clave Fiscal). “Fiscal Codes” are required for individuals and companies to file affidavits and information with the National Tax Office (AFIP) through the online tax system.

10)   Obtain a tax identification number (CUIT) from the National Tax Office (Administración Federal de Ingresos Públicos, AFIP) and register for social security

11)   Register turnover tax at local level at the Dirección General de Rentas (DGR) in the City of Buenos Aires

12)   Register with the Sistema Unico de Seguridad Social (SUSS)

13)   Contract an insurance for employees with a risk labor company (ART, Aseguradora de Riesgos del Trabajo)

14)   Rubricate books of wages in the Ministerio de Trabajo (Ministry of Labor)

As stated in the overview, Argentina is infamous for high levels of corruption and lengthy/complex bureaucratic system. Therefore, it is a good idea to gain trustworthy local contacts and seek legal advice to ensure that you successfully establish your company/business in the correct and most efficient manner.

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Alternative Uses for Shipping Containers

When you source or sell abroad, the goods get shipped to their destination – usually aboard ships and packed into shipping containers. The shipment arrives, but what happens to the containers?

Most get re-used indefinitely, since they are built to last and resist wear. However, some containers have stranger and more interesting lives.

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All You Need To Know About South Korea’s IT Industry: 

The information technology (IT) industry is one of the most important and fastest growing industries worldwide, contributing almost $1 trillion every year for the global economy. In Asia, South Korea is one of the countries at the forefront of key development in the IT industry in terms of its growth potential, trade, and added value. 

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Starting a Small Business

Are you thinking about changing your normal 9:00 to 5:00 office work into your own business? In the event that you haven’t given this idea reasonable consideration, you’d better take a few moments, think and evaluate what is needed to set up your desired business. Remember, more than a few have decided to join the fleeting trend of becoming business owners just to give up when things become a little challenging ( and believe me it will! ). 

Here are three key questions you need to answer to determine if you have what it takes to become a successful small business owner:

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Motivating Textile Employees Without a Spending a Dime

The key to success in the textile industry is having a highly efficient and productive work force. So how do you foster an environment that highly efficient? The key is job satisfaction. According to the article “Work motivation and job satisfaction dynamics of textile employees” by Yasemin Oraman, job satisfaction and employee motivation are intrinsically linked. If you would like to increase job satisfaction and employee productivity without spending a dime, consider the following:

Offer respectful praise and recognition: This applies to every industry—not just the textile industry. Time and time again, simple recognition is often touted as one of the most successful motivational factors. This could be recognition of an achievement in a meeting, praise in the company newsletter or you could opt for an employee of the month award. Oraman’s report confirms this with textile workers citing that the psycho-social tool most likely to motivate them is mere appreciation and respect for their private life.

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Business Travel Priorities

It’s no secret that the recession has had a major impact on corporate travel in recent years, but the latest travel survey by Embassy Suites Hotels has revealed that businesses are still feeling the pinch – even though the recession is, technically, behind us.

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Business Travel Trends in 2013

The business travel market fluctuates quite significantly with the global economy—the healthier the economy, the more buoyant the business travel market is. 

Business travellers are now operating outside the confines of the traditional business travel booking model by demanding better deals on prices and more choices, which is driving a change in the industry.

Let’s look at the different trends that are and will continue to affect business travel in 2013.

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The US E-Commerce Market

ecommThe e-commerce market in the United States is worth over USD$200 billion and it is believed to continuously increase at a compounded growth rate of 10% annually, reaching an estimated $278.9 billion in 2015. The main factors that drive market growth are the rising use of the Internet and credit cards by consumers around the world, greater familiarity with online shopping and the increasing level of trust that consumers have towards secure online payment services. At present, e-commerce accounts for 13% of total retail sales, excluding grocery shopping. Therefore, since total retail is expected to increase from $2.2 trillion in 2012 to 2.5 trillion in 2015, the percentage of retail transactions conducted online is believed to also rise from 13% to 15%. Amazon, eBay and Netflix have been the top 2 sites for e-commerce activities for 2 consecutive years. Retail industries with the highest revenues include mass merchant (43.6 billion), computers/electronics (23.8billion), office supplies (17.7 billion) and apparel (15.0 billion).

Various marketing tactics have been implemented to encourage consumers to purchase goods over the Internet.

1)       Group Buying

This method of selling a product or service is also known as collective buying. Deals from various merchants are provided to customers on the condition that a minimum number of individuals purchase it. In order to be able to offer customers such deals, these website would negotiate with merchants- in exchange for discounts, these websites would promise to help them increase brand awareness and generate large groups of potentially regular customers. Although merchants would have to sacrifice by providing substantial discounts, agreeing to do so will allow them to gain instant access to a whole new group of customers. Once the minimum number of buyers have been met, individuals who have purchased the deal would receive the voucher via email, which they could print out and produce to the merchant. Examples include Groupon, Living Social, Teambuy and Dealathon.

2)      Flash Sales

These are quick sales that generate excitement among consumers and are designed to appeal to price sensitive deal seekers. Such deals will entice consumers to visit your website and perhaps even encourage impulse purchases. During flash sales, a few selected products will be substantially discounted for a short period of time, often not more than 24 to 36 hours. Sometimes, these sales are labelled “Deal(s) of the Day” and customers who have subscribed to their newsletters will receive a notification via email about the upcoming sale.

3)      Personalization

Consumers are able to personalize the goods that they purchase online. The amount of personalization permitted varies from website to website and also with each product. Zappos and Zazzle are examples of websites that allow customers to customize t-shirts, bags, electronic cases, posters, mugs, key chains and more. Customers are able to upload their unique design or even photograph to have these images printed on their products. Nike ID is an example of another website with limited personalization available and customers are provided with a set of colour and design options which they may select from. The main setback about this type of business model is that personalization makes it harder for companies to benefit from economies of scale. Furthermore, some businesses may occasionally experience poor design-manufacturing accuracy leading to customer dissatisfaction.

4)      Crowd-sourced demand

An excellent example of a company that has successfully executed such a business model is Threadless. Threadless is a community centred online apparel store that crowd-sources the designs, gain a predetermined demand then manufactures them. Crowdsourcing designs involves requesting external designers to submit their designs. Website visitors will then score and critique these designs. As an incentive, designers with the highest scores will be awarded a Bestee Medal, a trip to Chicago and an Adobe Creative Suite 5 Design Premium software. Designs that are popular and in demand will be printed on T-shirts, hoodies, phone cases and various other products. This form of business model has enabled Threadless to sell all its products, hence minimizing losses from unsold goods and generating more than $17 million in annual sales with a profit margin of 35%.

5)      C2C Marketplaces

C2C marketplaces enable customers to sell products and/or services to one another. Platforms that facilitate C2C are often like an online garage sale where individuals usually sell second hand paraphernalia such as furniture, electronics, equipment, decorative items, etcetera. Users may even sell or exchange collectibles and offer their services such as handiwork and more. Popular C2C online marketplaces include Craigslist, Kijiji and eBay.

Based on an internet user survey conducted by JP Morgan, higher income users tend to shop online more frequently compared to lower and middle income individuals.

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