A Quick Overview of Incorporating a Company in Latin America
Incorporating a company in a new environment requires establishment of a legal entity so that commercial activities in the new region can commence. Incorporating a company in a new country will give you experience through learning about the different jurisdiction. Incorporating a company in Latin America lets you break through the market of Latin America and conduct business activities.
Following is a list of benefits:
- Incorporating a company in Latin America lets you explore to the much desired, diversed and opportunity full of market.
- Educated and cheap workforce which helps in increasing the profit when compared to North America
- Attractive government schemes which has been designed for the foreign investment
A local agent can always be very help in forming a company in Latin America which suits the purpose of the business and the working style. The business opportunities in Latin America is continuously growing and it is the right time to make some investment here in the market of Latin America which is full of opportunity.
Why Should You Form a Company In Latin America?
Latin America today is under Golden Age and the potential of the economic growth of this region is reaching peak, thus it is good time for the investors to incorporate their company here. Following is the list of reasons why should you form a company in Latin America:
Strong GDP growth
A strong GDP growth is predicted in Latin America in the upcoming years. The growing figures of GDP has allowed the region to undergo a massive transformation with some attractive incentives by government. The GDP is expected to grow by 2% in 2018 and by 2.8% by 2019, however countries like Peru are expected to grow by 3.8%.
Emerging middle class
With the development in this region, people are escaping poverty thus leading to emergence of middle class. According to the World Bank research study, the poverty line fell by 10% which means around 50 million people escaped poverty over a decade (2000-2010).
Abundance of natural resources
Latin America has been known for abundance of natural resources is the major reason behind market potential and huge business opportunity. Variety of niches have been developed because of the wide range of natural resource availability.
The tourism of Latin America is growing at a faster rate due to its rich culture which is attracting millions of people from around the world. The popular tourism of Latin America is due to:
- Traditional powerhouses such as Machu Pichu, Copacabana
- Football culture of Argentina and Brazil
- Amazing rainforest beauty found in Peru, Colombia and Brazil
Legal Entity Structure in Latin America
There are four different legal entities which may differ slightly in the different countries in Latin America:
- Set up a branch office in a foreign company (Sucursal de Sociedad Extranjera)
- A corporation (S.A. Sociedad Anonima)
- Simplified shares company (S.A.S. Sociedad por Acciones Simplificadas)
- A Limited Liability Company (Sociedad de Responsabilidad Limitada- SRL)
The best legal entity structure that can form in Latin America is a simplified shares company.
Procedural Steps for Incorporating a Company
Setting up a company in Latin America involves time, costs, and stress which is almost similar in every country that belongs to Latin America. It is necessary that the company’s legal structure must be rightly defined which can be done successfully through the help of a local agent.
A local service provider is the right one that can guide you through the incorporation process which includes:
- Assist in selecting the right legal entity structure
- Help in searching the company’s name
- Draft company’s bylaws
- Obtain company’s book officially
- Receive tax ID
- Complete the register’s company with the right local authorities
- Help in an open bank account
Statutory Requirements of a Company
There are minimum legal compliance requirements which must be met by the companies that are been established in Latin America. Following is the list of the minimum statutory requirements of Latin America which must be met:
- Appointing a legal representative: A local person who is either the resident of that country or a citizenship holder can only become a legal representative or the legal face of the newly formed company. He is responsible for assisting the investors in completing the registration process and renewals.
- Have a fiscal address: Every company must register their office and they must have an address for the communication of tax payments, mailing and other official communication purposes.
- Tax declaration: It is mandatory that every company must file their tax declarations monthly and annually.
The incorporation of business is a stressful task and hence, hiring service providers can help you in identifying the right legal structure of the business and successfully assisting you in completing the registration process of the company.