Opening A Software Development Center In Argentina??

[nicoenarg]

Thank you all for your valuable input.

I must admit, I am a bit surprised that overwhelmingly people here recommend not to come to the Arg. For my company, and personally for me, quality is everything. Our line of business doesn't allow production bugs nor delays in delivering high quality software. I am worried because many of you mention people's quality as a major issue.

I have considered using an outsource company in Arg but there are 2 main problems with that:

1. I am very concerned giving control over our source code to another company (yes we own it, but KNOW and understand it).
   
2. Their overhead makes it less attractive.

@citygirl - what do you mean 25% raises to employee on a yearly basis? This sounds almost fictional???

Anyone knows about salaries in Cordoba or Mendoza?

Again, thank you all for you input!

With all due respect, you might want to do some research before you consider Argentina (or any other country for that matter). When it comes to Argentina, forget official statistics. Inflation last year ran from 21-25% depending on different economists so all the unions fought for salary hikes of 25% (and sometimes more). This year inflation is expected to hit 30% and one of the big union bosses is already talking about a 30% salary hike for his workers. Whatever happens with these big unions happens to the rest of the folks too.

Expect to give raises that are 25-30% next year but expect to do more the year after. The business model as it stands in Argentina currently is unsustainable, that is why people are telling you to look elsewhere.

There are much better countries when it comes to business in Latin America. You know, the countries that actually understand that if your business does well in their country, their country will do well...like Chile.

 

[lamarque]

Thank you all for your valuable input.

I must admit, I am a bit surprised that overwhelmingly people here recommend not to come to the Arg. For my company, and personally for me, quality is everything. Our line of business doesn't allow production bugs nor delays in delivering high quality software. I am worried because many of you mention people's quality as a major issue.

I have considered using an outsource company in Arg but there are 2 main problems with that:

1. I am very concerned giving control over our source code to another company (yes we own it, but KNOW and understand it).
   
2. Their overhead makes it less attractive.

@citygirl - what do you mean 25% raises to employee on a yearly basis? This sounds almost fictional???

Anyone knows about salaries in Cordoba or Mendoza?

Again, thank you all for you input!

Sallary rise around 20%-30% per year, but then the peso devaluate around 10-15% per year and that devaluation is acelerating lately, so your real rise in cost in usd is between 7 to 13% per year or less if the devaluation acelerate as is happening this year

 

[citygirl]

Thank you all for your valuable input.

I must admit, I am a bit surprised that overwhelmingly people here recommend not to come to the Arg. For my company, and personally for me, quality is everything. Our line of business doesn't allow production bugs nor delays in delivering high quality software. I am worried because many of you mention people's quality as a major issue.

I have considered using an outsource company in Arg but there are 2 main problems with that:

1. I am very concerned giving control over our source code to another company (yes we own it, but KNOW and understand it).
   
2. Their overhead makes it less attractive.

@citygirl - what do you mean 25% raises to employee on a yearly basis? This sounds almost fictional???

Anyone knows about salaries in Cordoba or Mendoza?

Again, thank you all for you input!

The above tells me you need to do a lot more research about the actual market here. Yes, 20 - 25% raises are standard. And that is for *average* employees. Expect to pay more for top performers. Yes, you will pay a mandatory 13th month bonus. You also have 14 (more or less) holidays a year. Plus 2 weeks of vacation. Have you done your research and do you understand what is involved in termination and severance pay outs if/when you let someone go? You will also be expected to provide health care for your employees. At a minimum an obra social but most private companies provide private insurance. Which can be quite expensive.

Are you aware that you will need a resident of Argentina as a director of the company? Have you factored in the legal/accounting fees? As a foreign company, your books will be under scrutiny. So while people talk about the "blue" rate - it often isn't a factor. Even if your clients pay you in the US, you will need to send that money into Argentina in order to cover payroll and corp expenses. And that means going through central bank and official rates.

I set up a company here in 2008 which had about 15 people so I am rather intimately aware of the headaches. I will tell you that i managed projects here, in India, in China, in Slovakia, in the UK, the US, etc. And Argentina was by far more expensive that India, China and Europe. Work quality was good but work ethics... well, lets just say it is very different than the US.

 

[2GuysInPM]

If you are seriously considering South America, I would suggest Chile as well. Argentina is just cluster-F right now and not biz friendly.

@citygirl - what do you mean 25% raises to employee on a yearly basis? This sounds almost fictional???

Sadly, nothing fictional about that statement. Start reading this forum's many threads about inflation and employment and you'll understand.

 

[dennisr]

The lady knows: Citygirl

I love this one: Annual complementary salary or “thirteenth salary”: It is an additional salary to the 12 remunerations paid each month during the year. Employees are paid this supplemental salary in two installments paid on a semi-annual basis, that is to say, in June and December each year. The amount is equivalent to 50% of the best salary earned in the pertaining six-monthly period.

http://www.deloitte.com/assets/Dcom-Argentina/Local%20Assets/Documents/labor_market_05-2005.pdf

 

[French jurist]

Chile has a specific program for foreigners who want to launch a start-up (don't have time to search the details, info was given to me by a member of this forum who must be cruising the Antartic right now).
It's something like:
- Chile will give money
- Chile will make it easier to get residency & such
And there likely are other benefits.

Some people here might have more details about this program

 

[nicoenarg]

Chile has a specific program for foreigners who want to launch a start-up (don't have time to search the details, info was given to me by a member of this forum who must be cruising the Antartic right now).
It's something like:
- Chile will give money
- Chile will make it easier to get residency & such
And there likely are other benefits.

Some people here might have more details about this program

Is this what you're referring to frenchie?

http://startupchile.org

This website was mentioned on the first page (EDIT: It was mentioned by thomasb).

 

[French jurist]

Is this what you're referring to frenchie?

http://startupchile.org

This website was mentioned on the first page (EDIT: It was mentioned by thomasb).

Oops... sorry didn't see that. I guess that's what I was referring to

 

[lamarque]

Globant one of the biggest Argentina software development companys was adquired by wpp an english firm, so i supose there is some potencial in the software field after all

 

[nicoenarg]

Globant one of the biggest Argentina software development companys was adquired by wpp an english firm, so i supose there is some potencial in the software field after all

Your sentence is a little misleading. They didn't acquire Globant, they bought 20% of it. Globant actually has offices in the US, UK, Luxembourg, Brazil, Colombia, and Uruguay (EDIT: They are HQed in Argentina though, sorry should have already mentioned that). And yes they are doing pretty well but that may have a lot to do with them not solely depending on Argentina.

I don't think the OP was looking into spreading around operations all over Latin America and Europe.