Doing Business in Argentinia

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Undertaking business in a foreign country is often a challenging experience. Different traditions, attitudes and protocols can serve to inhibit effectiveness and cause frustration.

When conducting business overseas, you must remember that the people with whom you are dealing are not wrong, they are just different. However, you can prepare for these differences and learn how best to deal with the hurdles you may face.

Following are just a few points that you should be aware of when conducting business in Argentina.

Building Business Relationships

Business meetings in Argentina need to be carefully scheduled, with agreed agenda points. Be sure that meetings lead to action, as Argentineans traditionally see them almost as social occasions.

Also allow time for meeting Argentine contacts outside business hours. A less clear cut distinction is made between work and leisure and the most profitable time with Argentine business people is often spent outside the office or factory in restaurants and at barbecues.

Care must be taken to distinguish between what Argentine firms offer to supply and what they actually deliver. Argentina shares the Latin American custom of not wanting to say no, meaning that it will be up to you to assess whether or not they can deliver on their promises.

It is important to ensure you give the impression that you are committed to investing and doing business in Argentina for the long term, not just on a one-off occasion. This helps break the vicious circle of unfulfilled promises on both sides.

Government and Law

Argentines are very proud of the fact that Argentina now has a working democracy. However, particular care needs to be taken in any dealings with government officials. Argentina still has a huge amount of bureaucracy and dealing with this takes a lot of time. Corruption at all levels of this bureaucracy is still rife.

Remember to enlist local expertise for legal matters. Due to the recent changes in business as well as the many years of government control of industry and commerce, it is often difficult to find the best and most appropriate way to conduct business.

It is not advisable to raise the subject of military government and be very careful to avoid the topic of the Falklands Islands as almost every Argentine is convinced that they should have sovereignty over the islands.

Argentinian Heritage

Argentina is very proud of its European heritage. Most of the population, especially in the capital city Buenos Aires, have ancestors who immigrated to Argentina between the end of the 19th century and the middle of this century.

Buenos Aires is not just a Spanish city, but also has strong traditions inherited from Italy, Germany and Eastern Europe. After New York, it is the city with the largest Jewish presence in the Americas.

However, it is extremely important not to confuse Buenos Aires with the whole of Argentina. Although a third of all Argentines live in greater Buenos Aires, the Argentine interior is very different with more traditional ways and a greater presence of mixed race and indigenous traits.

Do remember that Argentina is not to be confused with the rest of Latin America. The 35 million Argentines are as different from Mexicans as British are from Russians. They share the Spanish language, but often even that is spoken quite differently.

The Business Environment

Argentine industry and business has been going through a process of great change in the 1990s. After being protected and inward-looking for many years, Argentine companies are only now beginning to learn that they must compete nationally and internationally.

Many local companies contain a mixture of the traditional and the modern - they are often family run and likely to have many more typewriters than functioning computers!

Much of the Argentine industry is still based on agriculture and agricultural products. Companies involved in heavy industry, such as automobile manufacturing or construction, are largely foreign owned.

Do take note of the fact that Argentina is now a dynamic part of MERCOSUR regional grouping of countries. (The other members are Brazil, Paraguay and Uraguay). Argentina hopes to supply the technologically sophisticated part of this market, as it cannot generally compete with Brazil in terms of scale.

The business environment in Argentina was thrown into turmoil at the end of 2001. After a decade of economic stability, with one Argentine peso valued at one US dollar, this exchange rate was abandoned, and the local currency left to float freely. This caused a massive withdrawal of capital from Argentina, and this provoked a banking and financial crisis. Long-term planning became extremely difficult, and the outlook for foreign investment is very uncertain. Extreme caution is advised, as the economic uncertainty is likely to last for many months.

This information was supplied by Nick Caistor, is a senior producer with the BBC Latin America Service. He has worked in Argentina for the past twenty years and frequently travels throughout the whole of Latin America. He is a speaker at Farnham Castle May 2002