BlankWobber
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- Jul 13, 2012
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First post for me – great forum – hi everyone!
As a North American entrepreneur of the ‘caring capitalist’ variety, I have always tried to do the right thing. So when I first opened up our branch office down here about 6-7 years ago, I had no idea how difficult it would be to operate a company that is 100% ‘in the white’. With patience, hard work and most importantly, some simply terrific and talented people (probably the only reason I am still here and actively investing in the place), we have just about managed to achieve this feat. Some of these early war-stories would no doubt make for great posts in the future (if only for their more humorous aspects).
I would love to hear from other expats who are successful entrepreneurs on this forum – I’m sure we could learn a great deal from each other as we trade tips/grumbles/triumphs and otherwise ponder this wonderful enigma known as Argentina. I do not believe that I am naïve enough to think all is wonderful here or that the general business climate is anything other than hostile to the well-intentioned, garden-variety North American entrepreneur. But yet I am reminded every day of why it is still worth it, in spite of all challenges….
We have created good paying, reasonably secure jobs, interesting work and are blessed with truly great people - supplying professional services to the North American market. 100% of our sales are exported in US$. In spite of being constantly bombarded with all sorts of advice and even outright scorn and criticism from some of my other entrepreneurial friends who may chose to run their operations differently than I do, (and with whom I neither agree with nor judge), I have pointedly refused to conduct any aspect of my business in the ‘black’ (why do I even feel the need to mention this?), in spite of the obvious reality that this has created a simply massive additional overhead at times….
We send approx. US $150k a month (US$2 million a year) to fund our Buenos Aires office in working capital – it goes straight into the Argentine banking system, where it is converted into pesos at the official rate, resulting in a near immediate ‘loss’ of between US$40k – US$60k per month (as compared to the prevailing blue rate) – ouch! I sincerely believe that we could do a lot of good down here with that kind of additional money every month. Also, all the ‘stuff’ we buy for our office is local of course and (I insist that) we pay the sales tax on just about every single thing that we purchase. And so, because we Only export, (and also have zero imports by the way), we have no subsequent sales tax credits to offset against the purchases.
My Argentine lawyer has recently suggested, (what he maintains is), a perfectly legal maneuver – whereby, with a suitably-written legal contract in place, we could sell our services on a monthly basis to an established import company here in Argentina, who could then sell them onto our North American office/company for subsequent resale to our existing North American customers. This import company could then claim the export revenues and this in turn would facilitate their current import process on the various restricted items. We would pay them monthly in US$ and they, in turn would pay our Buenos Aires office in pesos (to fund our monthly operating expenses). I would ask for a modest premium on the prevailing offical rate but my real interest is the offsets brought about my the sales taxes to that company. We would not be interested in sending money to anything other than a bona-fide Argentine-based bank/financial institution (i.e. no Uruguay or US-based account chicanery – it would make me look like a money launderer here in the US).
If any forum member knows of an established and honestly run importer who may benefit from this type of arrangement and is comfortable in dealing in these types of monthly dollar volumes, then please message me privately.
Thanks for reading everyone.
BW
As a North American entrepreneur of the ‘caring capitalist’ variety, I have always tried to do the right thing. So when I first opened up our branch office down here about 6-7 years ago, I had no idea how difficult it would be to operate a company that is 100% ‘in the white’. With patience, hard work and most importantly, some simply terrific and talented people (probably the only reason I am still here and actively investing in the place), we have just about managed to achieve this feat. Some of these early war-stories would no doubt make for great posts in the future (if only for their more humorous aspects).
I would love to hear from other expats who are successful entrepreneurs on this forum – I’m sure we could learn a great deal from each other as we trade tips/grumbles/triumphs and otherwise ponder this wonderful enigma known as Argentina. I do not believe that I am naïve enough to think all is wonderful here or that the general business climate is anything other than hostile to the well-intentioned, garden-variety North American entrepreneur. But yet I am reminded every day of why it is still worth it, in spite of all challenges….
We have created good paying, reasonably secure jobs, interesting work and are blessed with truly great people - supplying professional services to the North American market. 100% of our sales are exported in US$. In spite of being constantly bombarded with all sorts of advice and even outright scorn and criticism from some of my other entrepreneurial friends who may chose to run their operations differently than I do, (and with whom I neither agree with nor judge), I have pointedly refused to conduct any aspect of my business in the ‘black’ (why do I even feel the need to mention this?), in spite of the obvious reality that this has created a simply massive additional overhead at times….
We send approx. US $150k a month (US$2 million a year) to fund our Buenos Aires office in working capital – it goes straight into the Argentine banking system, where it is converted into pesos at the official rate, resulting in a near immediate ‘loss’ of between US$40k – US$60k per month (as compared to the prevailing blue rate) – ouch! I sincerely believe that we could do a lot of good down here with that kind of additional money every month. Also, all the ‘stuff’ we buy for our office is local of course and (I insist that) we pay the sales tax on just about every single thing that we purchase. And so, because we Only export, (and also have zero imports by the way), we have no subsequent sales tax credits to offset against the purchases.
My Argentine lawyer has recently suggested, (what he maintains is), a perfectly legal maneuver – whereby, with a suitably-written legal contract in place, we could sell our services on a monthly basis to an established import company here in Argentina, who could then sell them onto our North American office/company for subsequent resale to our existing North American customers. This import company could then claim the export revenues and this in turn would facilitate their current import process on the various restricted items. We would pay them monthly in US$ and they, in turn would pay our Buenos Aires office in pesos (to fund our monthly operating expenses). I would ask for a modest premium on the prevailing offical rate but my real interest is the offsets brought about my the sales taxes to that company. We would not be interested in sending money to anything other than a bona-fide Argentine-based bank/financial institution (i.e. no Uruguay or US-based account chicanery – it would make me look like a money launderer here in the US).
If any forum member knows of an established and honestly run importer who may benefit from this type of arrangement and is comfortable in dealing in these types of monthly dollar volumes, then please message me privately.
Thanks for reading everyone.
BW
