Three things to consider when expanding into Brazil

Three things to consider when expanding into Brazil

Feb 4, 2022 | Remote team, Brasil, Brazil, Global Business Expansion, Latin America, South America, Why choose us

Three things to consider when expanding into Brazil

A community which is rising in prominence on the world stage in the tech field.

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Brazil is one of the ten largest economies in the world with a deep talent pool to draw, especially a country full of developers, programmers, coders, and technologists with in-demand skills.

While there are rich rewards to be found in the Brazilian marketplace and hiring pools, expansion is not without its challenges.

 

1. Get to know the Brazilian people

The Brazilian people are famously open, gregarious, and fun-loving. In addition to the fact that Brazilians speak Portuguese—and not Spanish—there are other important facts you should consider.

Brazilians are shrewd negotiators, entrepreneurial, and creative in their approach to business. These qualities are sometimes overlooked as Brazilians put a large emphasis on building relationships first before engaging in business.

As a result, patience is important when working with Brazilians. Be prepared to talk, over a cafézinho (small dark coffee), about social, non-business-related topics during meetings for a much longer time than is customary in the U.S. or Europe. Enjoy the process of building relationships with your Brazilian counterparts and try not to rush—business will eventually be discussed.

 

2. Prepare for Brazilian labor regulations

Like many other countries in the LATAM region, the Brazilian market is still mired in rigid rules and practices. Companies that expand into Brazil or engage talent in the country must think about the impact of higher-than-normal labor costs and the challenges of a complex bureaucracy.

Despite these hurdles, there is light at the end of the tunnel. More and more multinational corporations move into Brazil with the goals of engaging talent that meets their budget, finding professionals with the skills they need, and reaching new customers and clients. As a result, the Brazilian government is making strides towards creating a more welcoming employment market. That means loosening some strict employment laws and making it easier for international companies to engage talent.

As such, it is now easier than in previous years to engage temporary and contingent employees, handle payroll, and comply with employment regulations. Still, it’s wise for your internal HR, legal, or finance teams to constantly stay up-to-date on classification rules, salary requirements, and more.

 

3. Understand Brazil’s digital compliance rules

Companies that do business in Europe are already familiar with the challenges of adhering to the General Data Protection Regulation (GDPR). Those that move into Brazil face a new obstacle: meeting the requirements of Brazil’s Lei Geral de Proteção de Dados (LGPD).

Like the GDPR, the LGPD sets strict rules for how companies acquire, manage, and use personal data from customers. Personal data refers to anything related to names, health history, political opinions, sexual orientation, web data like IP addresses, and more.

The LGPD requires companies to appoint a Data Protection Officer (DPO) to ensure that their company meets LGPD standards. The DPO must maintain contact with Brazil’s compliance authorities (locally known as the Autoridade Nacional de Proteção de Dados) while ensuring the company continues to compliantly manage user data.

Are you thinking of expanding your business in Brazil?

Would you like to add a Brazilian talent to your team? We can help you to do in a safe way, Contact Us

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Why are business expanding into Latin America?

Why are business expanding into Latin America?

Dec 30, 2021 | Employer Of Record, Latin America, Salaries, Start up

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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Employer of Record in Argentina

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Hiring Colombian employees

Hiring Colombian employees

Dec 9, 2021 | Employer Of Record, Colombia, EOR, Featured, Human Resources, Latin America

Hiring Colombian employees

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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Employer of Record in Argentina

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Employer of Record in Argentina

Employer of Record in Argentina

Nov 24, 2021 | Employer Of Record, Featured, Latin America, Remote team, Remote work, South America, Why choose us

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Argentina is a viable option for companies looking to hire remote teams. Roots EOR simplifies the process of Employment in this country. Want to know more about us? Let´s get started!

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The employee onboarding process is not very cumbersome in Argentina. Companies look for resources online using popular employment sites such as Monster. Professional sites like LinkedIn also play a significant role in hiring employees at a global level. Other local job search sites like Bumeran, ZonaJobs, etc. also help companies in scouting the best talent. The recruiters then conduct several rounds of testing to analyze and understand the candidate’s potential and choose the best fit for the role.

About 78.86% of people in Argentina are employed in the services sector. Therefore, a lot of jobs arise from various services like teaching, etc. However, due to the pandemic, most employees are working remotely. This has attracted a lot of global talent to Argentina.

The process of handling recruitment from scratch can be extremely tiring for companies. With Roots EOR you can hire employees with much more ease and convenience. Roots EOR takes care of all the steps involved in the onboarding process so that you can focus on the other essential aspects of your business.

Argentina’s labor laws have multiple provisions, including employee welfare funds. You must be mindful of these provisions if you are hiring in Argentina. Countries have laws and provisions to safeguard the interests of the employees working in these companies.

A large number of people working in Argentina belong to other countries. These laws also safeguard the interests of the foreign nationals who work there. There are several contracts between different countries; Argentina’s laws are formulated accounting for all these factors.

Best resources at lowest cost

Argentina has numerous employee entitlements such as leaves and employee health benefits. As a company, you should be aware of these employee entitlements.

But without doubt Argentina is a promising and convenient place to invest. Employment laws in Argentina are congenial for employers and focus on improving employment in the country. Still, Argentina’s business market has its share of complexities. Collaborate with Roots EOR to sail through it all smoothly. Our team will handle cross-border payments, payroll, compliances, benefits, taxes, and work permits in Argentina ensuring your complete focus on your business scale-up. Roots EOR has resources that can help you to manage the Argentinian employees’ entitlements. To know more, contact us.

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The best countries in Latin America for hiring employers

The best countries in Latin America for hiring employers

Sep 14, 2021 | EOR, Employer Of Record, Latin America, South America

The best countries in Latin America for hiring employers

south american woman, free lancer.
Some countries are becoming increasingly attractive to companies looking for expanding their teams.

With time zones close to those of the United States, strong communication in English and the availability of qualified employees, Latin America offers considerable benefits for companies seeking new opportunities for expansion.

 

Main countries of interest in South America

According to a study by Agile Engine, the top four countries to hire software developers in Latin America in terms of absolute numbers are: Argentina, Brazil, Mexico and Chile.

 

Argentina

It may come as a surprise, but if any company in the US is considering outsourcing software development to Argentina, they can expect top-notch service, smooth communication, and excellent developer quality. Among Latin American countries, it is considered the first option.

Seven Argentine universities are listed among the best global universities. In Coursera’s Global Skills Index Report 2020, Argentina ranked 22nd in the global ranking for skills in data science, including technologies such as Python, SQL, R, TensorFlow, Cloud APIs, NLP and others.

Argentina is the leading Latin American country in a technology skills category that includes technologies such as C, AI, JavaScript, Web Development, UX Design, Cybersecurity, Convolutional Neural Network, Cloud Computing, Internet of Things (IoT) and Application Programming Interface.

 

Brazil

The New Economy is breaking records! The Brazilian innovation ecosystem had, in the first half of 2021, a volume of investments 45% higher than the first half of 2020. There were US$ 5.2 billion in 339 rounds of investments, according to the Inside Venture Capital report. Analyzing the semester, the month of June was also historic: US$ 2 billion were invested in more than 63 rounds – the best result for a month.

Brazil attracts many global companies that want to take advantage of the benefits that remote engineers have to offer. Many talented developers have worked with global organizations on projects, learning new ideas and skills in the process.

The Brazilian economic scenario and the expansion of innovation in recent years influences the performance of the IT services market and lead companies to reduce expenses and focus on maintaining the operation and increasing efficiency with the adoption of emerging technologies such as cloud computing, intelligence artificial (AI), blockchain, Internet of Things (IoT) and 5G, operated by a mix of large, small and medium-sized companies.

 

Mexico

Mexico is no longer a hidden gem for software development outsourcing or nearshoring due to its proximity to the United States. As an outsourced partner, Mexico benefits from a strong technology sector workforce, competitive salaries and mature infrastructure.

Mexico has grown rapidly into a globally competitive market in the information technology outsourcing industry and is a dynamic business hub. The capital is an international city where English is common.

The country is among the 15 largest economies in the world. According to Kearny’s Global Services Location Index, Mexico was ranked 11th in the top 50 countries for providing IT. The Monterrey Institute of Technology and Higher Studies (ITESM), has 30 university campuses in 25 cities. ITESM is well known for producing outstanding talent with many industry ties.

 

Chile

The sanitary crisis, created by the COVID-19 outbreak, is accelerating Chile’s digital transformation. As a result of the pandemic, many firms had to adopt several digital technologies, such as video conferencing, document sharing, cloud solutions, information security, or online selling and buying, to keep their operations running.

Employers have been pushed to work with remote teams and employees have started to learn to interact with colleagues virtually and manage their time online from home. This is resulting in a steep learning curve. Authorities approved a telework act that entitles workers to provide their services from home or any other place other than the establishments of the firm, maintaining the same working conditions as onsite workers. Source: Organization for Economic Co-operation and Development (OECD) Economic Surveys: Chile 2021

 

From a population standpoint, Brazil and Argentina tend to be the best-known South American countries for IT staff augmentation. The reason for this is simple: a larger base of talent means better chances of finding strong developers suited to your needs.

It seems to be a good time to recruit employees from Latin America. Do you want to know how? Contact Our Advisors