The Business Environment in Argentina

9th de Julio




I am an American and I moved to Argentina last year. I came down over the course of 3 years 15+ times before I moved here permanently. I find the Porteños very educated and friendly. However, it is a totally different world being in a city like Buenos Aires as a tourist and another living here and operating as a business.

Before moving down to Argentina, I read that Transparency International, which is a well respected organization listed Argentina as one of the most corrupt countries in the world to do business in. http://www.transparency.org/cpi/2004/cpi2004.en.html#cpi2004 I thought to myself there had to be a mistake. Why would they write this about a country I loved so much. How could Argentina be grouped with countries like Libya, Ethiopia, Kenya, Angola and the Congo??

Let me tell you something. After living down here and doing business with these locals I can tell you that I'm surprised Argentina isn't ranked further down the list. It is sad to say but the way many businesses here do business is almost criminal. The truly shocking thing is most businesses have done business like this for so long --this is all normal to them. They don't know another way to do business. The Porteños always try to compare themselves to their European descendents but from a business perspective they have more in common with African nations like the Congo, Angola and Ethiopia.

There is no sense of ethics or loyalty for the most part. There are exceptions to the rule but many locals try to extract as much as they can out of the first/only transaction. They try to make as much as they can in the beginning and they don't worry about a longer term mutually beneficial relationship in the future down the road. This is perhaps the biggest challenge I have doing business here.

The reality is that the vast majority of companies here in Argentina would be bankrupt or go out of business in as little as 2-3 months in the USA or the UK. In the United States companies that operate like this quickly go under and are replaced by companies that are organized, ethical and offer good customer service and strong relationships with clients that last for years. That is very rare here. Many companies here think they are doing you a favor by spending money with them or giving them your business. They are so short sighted here. It's truly unbelievable.

Many savoy and intelligent businessmen and women have emigrated to the United States and Europe because they could not do business in their own country. Not only do they not trust the government but they don't trust one another. Family fortunes have been made but then lost due to rapidly changing laws, market conditions or outright theft. It is scary to think about but it is not like the United States. There are not stories after stories of how people made fortunes. There are far more tales of how people lost their shirts. One successful Porteño, named Roberto, who owns and administers www.travelsur.net emigrated to the US emailed me the following, "Argentina, for the most part, is the closest thing to the wild west anywhere, aside from some African countries. And chances are it will forever remain like
this, in between short periods of calmness." I couldn't agree with his statement more.

Many locals are blind to this type of behavior and they believe this is how business is done all over the world. The Porteños that have studied or worked abroad in the USA, UK, Asia or other parts of the world recognize this defect of their own country. My doctors, attorneys, accountants and friends all studied or worked abroad so they understand how difficult it is in their country. Many meetings I go to on a daily basis the locals apologize ahead of time for the system here in Argentina.

However, this kind of behavior is exactly what has caused my company to grow so quickly. Americans and Europeans don't like doing business in this fashion. Individuals and investors that are flocking to Argentina do not trust the locals (for good reason) so they have hired me and my company as a consultant to assist them. It takes more than a good idea to evolve and create a viable business here in Argentina. It takes capital but it takes a good knowledge of the kind of business environment that is in place here. Many foreigners pack up and go home very quickly because they are not accustomed to working like this. They were not educated on how slow the system is here and how much red tape there is. They have never before operated in an environment where there is no loyalty, ethics or professionalism.

Those with a solid business background that have operated in the USA/UK/Europe/Asia, that have a good education and understand business and long term relationships, and are well funded are going to become dominent leaders in their respective fields here in Argentina. The key is having a realistic expection before you come of what the business environment is like. There are many opportunities in Argentina for a foreigner with a good head on their shoulders and a good business plan. There is no hope of coming to Argentina and getting ahead by being an employee. You MUST start your own business here to thrive.

While I am fully aware that it is impossible to change the system on a massive scale, my goal is to create businesses and help others create businesses that will fundamentally help change the business community in Argentina. Since the dawn of time -- no matter how much corruption there was in a society, companies with a solid business model that operated efficiently and properly and were well funded, not only excelled but they caused other companies to rise to the occassion.