Why are business expanding into Latin America?

Why are business expanding into Latin America?

Why are business expanding into Latin America?

Let’s have a look how you can incorporate your company to this wave of expansion

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There are many factors driving this shift to Latin American expansions. One often-cited explanation is the so-called “U.S.-Factor.” Many businesses are moving to Latin America due to:

  • Favorable production and operational costs
  • Fantastic transport links to and from the United States with manageable flight times
  • Huge expanses of coast which equates to massive shipping capacities
  • Similar time zones to the United States
  • Progress in terms of infrastructural indices found in Latin America. The countries are modernizing at an impressive rate, and are more accommodating than ever for key considerations

However, the development that has arguably had the largest impact on convincing companies to move operations to and establish a local entity in Latin America, has been the emergence of startup incubators and accelerator projects. Both private and government-backed projects are common and have facilitated the entry into the Latin market to great success.

 

What Is a Startup Incubator and Is It the same as an Accelerator?

Startup incubators and accelerators are relatively modern concepts, but both nurture innovation. However, both terms are bandied about quite frivolously, and the subtle nuances of each institution are often lost.

Both institutions serve to support the development of young companies, but the difference is where and how the aid is distributed. An accelerator is perhaps simpler to understand, as it does exactly what it says on the tin; an accelerator provides support, consultancy, and crucial cash flow to companies to hasten the rate at which they grow. Candidates normally enter an application process, which will see them selected for the program. With this support and advice, companies have the support they need to pursue (and reach) their goals in a significantly shorter amount of time than had they not been in the program.

An incubator, on the other hand, has the same goal, but ultimately approaches the challenge from a slightly different standpoint. While an accelerator will take an already-existing young business and try to take it to ‘the next level,’ incubators look to offer direction, management, and financial support for a concept and aim to turn it into a functional, profitable business. The slightly more maternal nature of an incubator means that there is no time frame and is perfect for projects of smaller scale.

Is your business ready to implement a global expansion strategy?

We can help you to hire employees in Latin America and anywhere in the world. Today, thanks to teleworking this is possible. You don’t have to know all the labor laws or be an expert. Leave that in our hands. Contact Us

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Four ways how working remotely can benefit our mental health

Four ways how working remotely can benefit our mental health

Four ways how working remotely can benefit our mental health

As part of a new normal, the world is steadily increasing adoption of remote work, with many tech giants already giving their employees an option to work remotely indefinitely. What is the relationship between remote work and mental health?

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According to a survey conducted by FlexJobs among 800 US employees, 48% of remote workers report their work-life balance as very good or excellent, compared to only 36% of employees without flexible work possibilities choosing that option. Two-third of remote workers surveyed declared that they prefer to not come back to the office – even after pandemic. They are also almost half as likely to struggle with poor mental health, compared to employees without flexible work options. In what ways remote-based approach can benefit our mental health?

1. Personalised work environment

Working remotely allows you to personalise your work environment, giving you more flexibility. While offices are designed to suit the needs of majority, not everyone is able to focus with frequent interruptions, loud conversations and seemingly endless train of birthday cakes. You know best (and if you don’t – this is the best time to try and find out) where and on what conditions you are at your most productive. Having that freedom improves our confidence and makes us more relaxed, both being crucial to a sustainable work routine.

2. Healthier routine

Working remotely means that more of our energy and time can be directed at our wellbeing routine. It gives us the possibility of eating healthier home-made lunches and squeezing in more time for exercise and meditation. Working in the place where we live also gives us a chance to improve our sleep schedule, which is known to have an immense impact on our mental and physical health.

3. Lower stress levels

According to a study by PGi, 82% of surveyed remote workers related the possibility of more flexible work arrangements with lower stress levels. This comes from the fact that having control over the way we work increases job satisfaction and slows down the burnout. Working from home gives us a possibility to spend more time with our family and friends (and pets), which helps us to approach new tasks more regenerated and with increased motivation.

4. Improved time management

Working from the office, it’s often difficult to juggle family tasks with job-related workload. Going remote means more control over our day and gives us a chance to prioritise and schedule each day differently. No more conflicts between personal appointments and office life, which makes us more calm, organised and facilitates forward planning.

‍While re-designing our work environment works great in terms of increasing productivity and gives us more time to focus on our mental health, it’s important to keep in mind the flip side – potential feelings of isolation and loneliness. It’s crucial to find an efficient and easy way to communicate with your co-workers from a remote office, and remember to set boundaries between work life and home, as they often may seem blurry.

IS HOME WORK YOUR CHOICE?

‍It is possible and even recommendable for our health to work from our home. This gives us the freedom to work for any company in the world. In the same way, if you own a company, hiring people from different parts of the world can be a good option.
Do you want to know how to do it? In an easy, fast way and saving you all the bureaucratic steps? Contact Us
We know how to simplify your life when hiring employees around the world.

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3 tips for recruiting abroad

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Companies want to have the best employees. Today it is possible to get them anywhere in the world. Are you interested in knowing how to do it? Read the article.

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1. Develop an adjustment plan after recruiting abroad

Once you’ve put in the time and resources to recruit abroad, it’s crucial to ensure your new global employees adjust properly. Having a global team means that your relationship with those employees will be different than with your local teams. Plan to bridge the social distance, make both teams feel important and supported, and provide enough space for the new team to make decisions.

Focus on defining your company so you can communicate those values to new employees. When you bring a local hire into the company, it’s much easier to catch onto the business culture. When someone is far away, even on the other side of the world, it’s crucial to be more communicative.

 

2. Understand local labor laws

Local labor laws can be complex and counterintuitive. Every country has its own set of labor protections and regulations. They can differ between regions or cities within a country, too. Without an in-depth knowledge of local laws, you can write contracts that are unenforceable, mishandle tax information and collection, and other errors.

Misclassifying workers is a frequent error for companies hiring overseas. It can be tempting to label every new hire an “independent contractor,” which keeps costs down. The employer pays fewer fees, taxes, and has fewer responsibilities when dealing with contractors.

However, most labor systems have strict tests for whether a contractor is actually an employee. Misclassifying someone as a contractor who should be an employee can result in huge expenses and lawsuits. The best way to ensure compliance with local labor laws is to use a trusted partner who is familiar with it so you can focus on developing your business.

 

3. Recruit smarter

While there is no shortage of people looking for a job, there is often a shortage of qualified, hard-working candidates. It can be difficult to find workers with the skills you need.

Many companies use their social networks to recruit good workers. You can also expand your reach by engaging with strategic partners that have established international networks to help find qualified employees.

RECRUITING ABROAD IS POSSIBLE

Expanding abroad is a big undertaking, but you don’t have to go about it alone. Work with a trusted team that has the experience to hire talent overseas, can help you manage compliance, and understands the culture. Get in touch with us today: 
Contact Us

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10 qualities that employers look for

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In this article, we’ll review the aspects every employer looks at. You can consider highlighting these skills in your resume and interviews:

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Communication skills

Employers understand the value of effective communication and actively look for this skill in potential employees. It’s important to show your competence in this area verbally, physically and through written communication. When responding via email, double-check the message before sending it to ensure that you are being clear and concise. Another key component to good communication is the ability to actively listen and provide thoughtful feedback, so be sure to stay engaged.

Honesty

Is key quality that employers want in their staff. Some applicants are tempted to exaggerate their qualifications to secure a job, but this is inadvisable. Though it may help you progress through the hiring process, if your potential employer discovers your dishonesty you will never recover their trust.

This quality is also an important characteristic to have beyond the interviewing process. An employee that admits mistakes and learns from them is an asset to any company. 

Loyalty

Honesty and loyalty are two traits that can’t be taught, which is why they are key attributes that employers look for. Prove yourself trustworthy and committed to the success of the company, and you will be invaluable. 

Dependability

The ability to consistently follow-through is an important work trait that employers seek, and one that you can prove you have throughout the interviewing process. Show a commitment to following deadlines by completing tasks as they’re assigned. 

Teamwork

Though not every job requires collaboration, the ability to work effectively and harmoniously in a group is a strength that employers want their employees to have. In fact, they will likely ask you how you function in a team during the interview process, so come prepared with an anecdote that highlights your ability to compromise and collaborate.

Flexibility

The ability to adapt is an important quality that employers want. Prove to them you can tackle tasks and changes as they come. You can also show this skill by addressing improvements that need to be made and developing systems or solutions to the issues.

Confidence

Being self-assured is a key characteristic that employers look for. They seek people to join their team that are confident in their abilities and that know what they want. Confident employees are friendly, engaging and have a clear (and honest) idea of what makes them a valuable asset.

A key component of confidence is having clear goals. Communicating your dreams to potential employers will prove that you are striving for something bigger, and not just looking for a job to pay your bills.

Work ethic

Another top quality that employers look for is a good work ethic. Employees that work hard are always on time and on target. Take pride in your work and others will take notice.

Problem-solving skills
Employers are looking for more than brainless drones to do their bidding. They want people on their team that can pinpoint a need and address it, so be sure to recount instances when you recognized an issue and developed an effective solution.

Ambition

Is a key trait that employers look for because of what it communicates about the worker. It means that they have something they’re working towards, and they are on a path of betterment for both themselves and their circumstances. Don’t be afraid to share your big dream with potential employers. They’ll likely find value in it, and it will positively impact your worth.

Are you looking to expand your staff?

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Hiring Colombian employees

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Do you want to know how to hire them without bearing the costs? Read this article.

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Low wages and modest annual leave requirements make Colombia an attractive hiring destination for international companies looking to grow their remote teams. With an average weekly working time of 48 hours, employees in Colombia are used to working more than employees in other countries and are generally known for their good work ethic.

 

Working time

An employee’s standard working week should not exceed 48 hours, i.e. eight hours per day over a six-day workweek. Every employee must have one day off per week which is usually Sunday but may be shifted to another day if detailed in the employment contract.

 

Overtime

Overtime work must not exceed two hours per day, i.e. twelve hours per week, and must be paid at a rate of at least 125% for daytime work and 175% for work at night or on public holidays.

 

Payroll

Colombian law distinguishes between three different types of payment: minimum wage, ordinary salary (payments higher than the minimum wage which do not include any additional payments such as bonuses or other) and integrated salary (fixed monthly salary which is higher than ten times the minimum wage and set at a rate 30% higher than usual, thus including all additional payments such as bonuses).

 

Minimum Wage

In 2021, the national minimum wage in Colombia is set at COP 908,526 per month (not including transportation allowance).

 

Sick Pay

If an employee is unable to work because of sickness or injury, the employer is obligated to provide sick pay equal to the employee’s usual wages for the first two days of absence. Starting with the third day of sick leave, sick pay is covered by Social Security at a rate of 66.67%. However, payments are limited to 180 days.

 

Bonuses

Except for those earning an integrated salary, employees in Colombia are entitled to a 13th salary (Prima de Servicios) which is to be paid out in two installments, one in June and the other one in December.

 

Taxes and Social Security Contribution

Employees and employers in Colombia are subject to the following tax and social security contribution rates (as of 2021):

EMPLOYER
31% corporate tax rate
19% VAT (standard rate)

EMPLOYEE
Individual income tax rates range from: 19% to 39% *

SOCIAL SECURITY
Around 30% of employee salary, of which:

  • 8.5% health insurance
  • 12% pension plan
  • 9% diverse social security funds (certain contributions only apply to income exceeding ten times the minimum wage)
  • Plus 0.522% to 6.96% for coverage against professional risks.

Please note that social security contributions for integrated salaries are calculated based on 70% of the employee’s income.

8% – 9% of employee salary, of which:

  • 4% health insurance
  • 4% pension plan (additional 1% on monthly income exceeding COP 3,634,000)

Employee Benefits

Leave such as annual leave, maternity, paternity, etc.
30 days of salary during the first year and 20 days of salary for every year thereafter, for termination of the contract without just cause.

Hiring in Colombia?

Not sure if you should start with a contractor or go ahead and hire a full-time teammate in Colombia? ROOTS EOR makes things easier for you! being able to hire employees in Colombia without having to bear the cost. Contact Us

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