Let's Make Some Money

[citygirl]

Steve's advice is 100% on the mark, whether or not you want to it. You can do it en negro but keep in mind that if someone has a grudge or just sees you as an easy mark, there could be expensive repercussions.

This may be a *tough* crowd but the advice is dead on. Running any type of business where you are going to issue/receive invoices and doing it illegally (which is what it will be if you don't register) is a recipe for disaster. And even if you do it under the radar, you aren't going to have legal recourse if someone decides not to pay you for your services.

 

[ssr]

Steve's advice is 100% on the mark, whether or not you want to it. You can do it en negro but keep in mind that if someone has a grudge or just sees you as an easy mark, there could be expensive repercussions.

This may be a *tough* crowd but the advice is dead on. Running any type of business where you are going to issue/receive invoices and doing it illegally (which is what it will be if you don't register) is a recipe for disaster. And even if you do it under the radar, you aren't going to have legal recourse if someone decides not to pay you for your services.

Which, unfortunately for enterprising Argentines, is why it's probably better to just work with other Americans down here and not involve Argentines at all. I've met several Americans "bootstrapping" their web businesses by simply living here and taking advantage of the low cost of living. Their businesses are based entirely in the US and, as far as Argentina is concerned, they are tourists with internet connections.

If you do choose to avail yourself of the relatively cheap labor down here, however, don't expect things to go smoothly. Absolutely nothing goes smoothly down here. I've heard enough war stories from friends of mine with businesses down here to know that I have no interest in starting a business based in Argentina or dealing with the potential problems that may come with Argentine partners or employees.

BTW, if you're interested in meeting some other expat entrepreneurs down here, this guy seems to be putting together some nice meetups:

http://www.facebook.com/notes.php?id=3002642

 

[Ailujjj]

Which, unfortunately for enterprising Argentines, is why it's probably better to just work with other Americans down here and not involve Argentines at all. I've met several Americans "bootstrapping" their web businesses by simply living here and taking advantage of the low cost of living. Their businesses are based entirely in the US and, as far as Argentina is concerned, they are tourists with internet connections.[/url]

Granted I haven't worked with Argentines personally but.... if one makes the effort to move & live in another country, it strikes me as peculiar to specifically avoid working with the people OF that country. Then again, maybe that's a Canadian point of view. And it also depends on whether you keep your work life entirely separate from your personal life.... however I find many entrepreneurs tend to pursue opportunities they have a passion for, and that distinction goes out the window.

Obviously there are major cultural differences that present a negative result in how business gets done (or doesn't) but to solely focus on working with other expats strikes me as narrowing the opportunities you've come to expand.

 

[cat1976]

If you do choose to avail yourself of the relatively cheap labor down here, however, don't expect things to go smoothly. Absolutely nothing goes smoothly down here. I've heard enough war stories from friends of mine with businesses down here to know that I have no interest in starting a business based in Argentina or dealing with the potential problems that may come with Argentine partners or employees.


My Argentine husband owns a small company here (75 employees) and his biggest headache is the employees. The union labor force is a major pain... There are soooo many laws the "protect" the employee for human right reasons. He cannot fire any employees without going through all sorts of hoops and then he still has to pay them for an agreed upon period of time, then there are the employees that get hurt on their days off (an employee got stabbed at a soccer game and punctured his kidney a year ago) and you still have to pay them their salary.

I won't even get into the taxes that he pays...

 

[steveinbsas]

Robearto has already informed us that he plans to pay those who work with him in dollars over drinks and food and apparently has no intention of complying with the labor laws or paying taxes.

I wonder if anyone from AFIP will ever bother to read the posts on this forum and go after Robearto and other scofflaws like him. Sooner or later the "system" will probably catch up with them, one way or another.

 

[perry]

Which, unfortunately for enterprising Argentines, is why it's probably better to just work with other Americans down here and not involve Argentines at all. I've met several Americans "bootstrapping" their web businesses by simply living here and taking advantage of the low cost of living. Their businesses are based entirely in the US and, as far as Argentina is concerned, they are tourists with internet connections.

If you do choose to avail yourself of the relatively cheap labor down here, however, don't expect things to go smoothly. Absolutely nothing goes smoothly down here. I've heard enough war stories from friends of mine with businesses down here to know that I have no interest in starting a business based in Argentina or dealing with the potential problems that may come with Argentine partners or employees.

BTW, if you're interested in meeting some other expat entrepreneurs down here, this guy seems to be putting together some nice meetups:

http://www.facebook.com/notes.php?id=3002642

Can you imagine if someone went to the USA and said the same about the USA citizens or any country . As much as some people and employees can be difficult there are also some that are jewels and with patience you will find then. I have met wonderful argentine people who will give you the shirt off their back literally.

 

[jp]

He cannot fire any employees without going through all sorts of hoops and then he still has to pay them for an agreed upon period of time, then there are the employees that get hurt on their days off (an employee got stabbed at a soccer game and punctured his kidney a year ago) and you still have to pay them their salary.

Its a travesty that people can't be fired on a whim, and you have to pay them sick pay when they are injured? Wow. This kinds of protection is standard across most of europe. It stops workers being exploited.


Robearto - as for working with argentines, if you choose not to you're missing out on the most powerful resource this country has. Education system is first rate, and argentina excels in a number of creative fields and competes on a world stage. I'm sure you'll have no problem finding talent here.

If you work with freelancers my understanding is that you can arrange payment from your company's base of operations in the US, and the freelancer is responsible for paying taxes from the payment they receive. Best check with a legal eagle, but there's ways of doing this that won't see you fall foul of any employment laws.

Best of luck with your venture.

 

[2beinba]

Robearto has already informed us that he plans to pay those who work with him in dollars over drinks and food and apparently has no intention of complying with the labor laws or paying taxes.

Why would you be so aggressive towards this person as to say he "apparently has no intention of complying with the labor laws or paying taxes"? Honestly, what do you know about this guy? Can one not come here temporarily and work based out of the US with people based out of the US and do everything legit? I surely do. I pay my taxes, the people I work with pay their taxes and we follow whatever labor laws apply to us. Believe it or not, this can all be done over food and drinks and still be perfectly legal. Seriously, it's not a good idea to defame people this way when you really don't know what you're talking about.

 

[ElQueso]

Well, Europe does things one way, and the US does things another. You can't always just fire someone for no cause in the States, but if your company is going under, for example,, you can lay people off to allow the company, and the rest that you can keep on, going. Unfortunately, things like that aren't quite so here, and possibly not in Europe?

The labor laws here favor the laborer to the point where smaller businesses are terrified to hire someone they don't know. In fact, many of them will only hire family. If they get an employee that passes the 3 month probationary period, the new employee can just laze off after that, because the company can't fire them (without cause) without paying them at least one month's wages. Now, you have to actually document someone's actions rpetty well for "just cause" to be proved, and even then, with the courts here favoring the workers so much, it's not a very sure thing (may not even be very likely) that the court will find in the company's favor. Even if they do, the cost of a lawyer and all the problems and hassle that go with it make it simpler to just pay the month's wage. The employee and the employer knows that. Nice little one-month vacation there.

God help you if you are a company who has to employee someone in a union job.

Then there's the taxes. A company roughly has to pay 60% of a person's wages in taxes. The employee is technically responsible for something like 19% of that, but the reality is that the salaries are declared for new hires in the NET pay, not the gross pay, so you are in effect paying their taxes as well. When you start paying skilled employees who have experience, it starts to make it difficult for someone from the States to make much margin - you can hire someone there sometimes easier and not too much more expensive as a contractor and forego these issues.

Related to unions, the company here has to pay the employee's union dues as well.

A contractor here, right now, is limited to $72K pesos a year. By law he cannot make more than that before he has to form an SA and pay that 60% himself. Not to mention the 3% services export tax that companies here have to pay for everything on top of that, for every centavo invoiced to companies out of the country.

The good news there is that I've heard that after ten years they are finally going to look at the last 7-8 or so years of currency devaluation and inflation and raise the limit times 3 or 4 or so, which will be a good thing - it will allow Argnetinos to work in the white a little easier.

I know a couple of business where it's very normal to pay employees a little in the white and a little in the black to make everyone happier. Individuals doing contract work is one of them. Locutorios are another.

I wouldn't necessarily disparage someone who is looking to figure out how to do business here using skilled labor and paying some or all of the salaries in the black. The Argentinos themselves do it all the time, it's the way business is done here on the smaller scale. On the larger scale, businesses that employ many people, it's a different story, but I doubt anyone here is looking to hit that scale.

 

[steveinbsas]

My business is and will be located in New York. I'm paying cash on a project basis. Just as if I was going to hire a tour guide or a maid service. I'm looking for creative help, and I am willing to pay in US dollars on a project by project basis. I am not really looking to incorporate in BA and earn in Pesos.

I am going to make some prototype Blue Jeans, Belts, Cuff Links, and a special money clip that I have invented. I will be working out of my apartment over drinks and food.

The website that I a working on is related to my US business which is a service to Wall Street firms... Capital Markets, Hedge Funds, etc... So, I don't think I will have any issues with hiring. I am looking for some good people who want to be involved with a fun project, and I will pay them for their help and time... That's all.

Thank you very much for the advice however... every comment helps.

Best Regards!

Why would you be so aggressive towards this person as to say he "apparently has no intention of complying with the labor laws or paying taxes"? Honestly, what do you know about this guy? Can one not come here temporarily and work based out of the US with people based out of the US and do everything legit? I surely do. I pay my taxes, the people I work with pay their taxes and we follow whatever labor laws apply to us. Believe it or not, this can all be done over food and drinks and still be perfectly legal. Seriously, it's not a good idea to defame people this way when you really don't know what you're talking about.

The important word here is hiring. It's one thing to be here, running a US business by remote control while consuming goods and services in Argentina, including the services of a designer or an architect (no matter what type). As soon as you hire someone, i. e. start paying them for their help and time, they must be registered with AFIP and provide facturas (receipts) for their services and charge the appropriate taxes or YOU must be registered with AFIP as an employer and "withhold" the appropriate taxes. If they are not from Argentina and don't have a work visa, it is not legal for them to "work" for you and it is not legal for you to pay them, either.

I cannot find anything in the OP's posts that indicates he has any intention of getting a business visa while he is here or comply with the applicable (tax) laws. What does " I'm paying cash on a project basis. Just as if I was going to hire a tour guide or a maid service. I'm looking for creative help, and I am willing to pay in US dollars on a project by project basis. I am not really looking to incorporate in BA and earn in pesos" mean if not precisely that?