Starting A Business?

[citygirl]

Argentina is one of the 4 countries where the total tax rate is higher than 100% of the (official) commercial profits,

http://data.worldban...-last&sort=desc
http://www.pwc.com/g...tables-2014.pdf

don't try to understand the logic behind it, things are just the way they are in Argentina. However, this implies that if you want your business to survive, you may have to earn part of your income in black.

I read that all the time and it is not in fact accurate. It lists all possible taxes a business might have to pay. Again, I ran a business here 100% in white (consulting) and it was profitable. The biggest hurdles are the one-offs that a small business might face - lawsuits from ex-employees for example or bribes as in Davidglen's case. But taxes, while they hurt, do not prevent a business from being profitable, even when operating in white.

 

[Chet]

all very useful input
very much appreciated
the tax table is concerning, but looking at what it says for other countries and knowing what I actually paid it seems to be rather inflated.
Thanks very much to all.

 

[citygirl]

Ojo - it's not that it is inflated. However, the taxes listed may not be applicable to your business. Keep in mind though generally your biggest issue will not necessarily be taxes, it will be employees. I would advise serious caution if you intend to go down the route of having employees here. Or at least understand you need to factor in 20% (minimum) annual raises, many, many holidays, having everyone want off in Jan, the fact it is a question of when, not if, you will get sued and the cost involved in terminating employees (a minimum of 2.5 months salary but can be much, much more).

Employee costs are the reason my former company eventually decided to sunset the business here, not taxes.

 

[Jaredberryman]

Another major issue you have to cope with here is the bureaucracy. It depends on what kind of business you have, but if you provide a service to other businesses, you are going to need an employee or partner that dedicates themselves exclusively to just going and getting checks from your clients, dealing with banks, and dealing with all the red tape. A friend of mine who is Argentine made a deal with a large company to where they give him all the services of charging his clients and running the administrative stuff, and an office, and he runs the business. The large business takes a cut of the profit while giving him the backup he needs. It's a serious consideration as getting the slightest thing done here is a real nightmare. Renting an office or a site is a nightmare. You will need a ton of paperwork. Traveling to and fro from client's businesses is a nightmare because of the constant traffic, and then they will screw up the check they write you. You'll be forced to go to one specific bank downtown to get your check deposited, and then find that your client wrote the check wrong. You will constantly have headaches with this sort of thing.

If you are doing retail you will have to deal with the inspections and all of that. Building a business here is not for the faint of heart.

 

[Montauk_Project]

I can second what Tex says--just paying our movistar bill (company phones) can be a nightmare. Every month they send the wrong amount (by double or tripple). And this is just a cell phone service! The first employee you will get, even part time, is someone to deal with administration and payments.

but I also want to add, all of our clients come from outside Argentina and it isn´t easy to deal with Brits (will waste weeks bargaining down 10 pounds), UStatsians aka Amercians (don´t believe anything you say and insist on doing it there way), Dutch (very nice, but their organization capacity makes the Argentines look like Germans), Koreans (threaten that they will commit suicide if they don´t get their way), Russians (pretend that they don´t understand English to ignore you), etc Every country has there issues--make an off color joke in the USA and you will get slapped with a lawsuite. The good thing about Argentina is that if you get employees who are loyal to you they will lay down their lives for the good of the company, but finding those people isn´t easy.

 

[Alicia karr]

I ran a business here for 18 months and second what people are warning about employees...labor suits are a way some people support themselves here and are almost always won in favor of the employee.
That being said, I found my biggest problem was that every time the business would start to make a profit new open hands appeared demanding money or old ones demanding more. It was impossible to stay ahead..
Nonetheless it was a wonderful ride, and really helped me integrate here. If you're a thrill seeker go for it. If you're stress aversive don't even think about it!

 

[Gringoboy]

Staying under the radar is the preferred option in this country.

 

[Hybrid Ambassador]

Staying under the radar is the preferred option in this country.

Hmmm, how do you obtain that status? Perhaps becoming on and off so to be stealth ?