After talking about the benefits of expanding commercially in European regions such as Spain and France, today I wanted to jump across the pond to tell you 5 reasons why European tech companies should expand their business in LatAm. If you own a tech company, this is of interest to you and this is what you need to know.
But first, why LatAm? Well, it is a region that has been growing steadily in terms of technology and business. Moreover, it is geographically located in a strategic place for European companies, which facilitates global expansion. So without further ado, here are 5 reasons why you should consider expanding your technology business in LatAm:
1. Great market opportunities
LatAm has a population of over 650 million people, making it one of the largest regions in the world in terms of population. In addition, the region’s technology market is constantly growing, which means that there is a great demand for technology and services in many sectors, such as education, healthcare, e-commerce, among others.
Some of the best countries to expand into in terms of market opportunities are Brazil, Mexico, Colombia and Argentina, which are the largest countries in the region in terms of population and economy. Each of these countries has its own strengths and weaknesses, but all offer great opportunities for European technology companies.
2. Lower operating costs
One of the main advantages of expanding into LatAm is that operating costs are generally lower than in Europe. This is because wages are lower, and production and real estate costs are also lower.
For example, Mexico is known to have one of the lowest average salaries in the region, which means that you can hire a team of software developers for a fraction of the cost you would have in Europe. In addition, the cost of real estate is also lower, which means that you can rent or buy an office for much less money than in Europe.
3. Importance of technology
LatAm has a wealth of tech talent and has seen great success in creating successful tech start-ups, including many tech unicorns. Some of the most famous unicorns include Mercado Libre, Rappi, Nubank and Cornershop. These companies have managed to expand globally and have become leaders in their respective sectors.
This gives us an idea of how important the technology sector has become in the region and how open they are to anything that smells of technology and innovation, not to mention the great talent that LatAm is developing in this sector.
4. Tax and financial benefits
Many LatAm countries offer tax and financial benefits for companies that decide to expand there. For example, Mexico offers tax incentives for companies investing in certain sectors, such as technology.
In addition, many countries in the region have tax treaties with European countries, which means that European companies can avoid double taxation and reduce their tax burden.
5. Global growth and expansion
Expanding into LatAm can help European technology companies grow and expand globally. The region is a bridge between North and South America, which means that a presence in LatAm can help companies expand into both markets.
In addition, LatAm is a region in constant growth and development, which means that companies establishing a presence there have the opportunity to grow with the region and increase their global reach. Many successful technology companies in LatAm, such as Mercado Libre and Rappi, have managed to expand internationally and become leaders in their respective sectors.
In conclusion, LatAm offers great opportunities for European technology companies due to its growing technology market and strategic geographic location. Lower operating costs, access to technology talent, tax and financial benefits, and the possibility to grow and expand globally are additional reasons to consider expanding in the region. Countries such as Brazil, Mexico, Colombia, Argentina, Chile Peru and Ecuador offer great market opportunities and each has its own strengths and weaknesses, so it is important to carefully evaluate which is best for each company.
So, knowing this… Are you going to miss all the opportunities that the “new continent” offers you?
At Springboard35 we have been helping technology companies to expand in Southern Europe and LatAm for more than 20 years, so we could say that we are experts in it. If after reading this post you are thinking about expanding in LatAm but don’t know where to start… then we need to talk.
We will help you speed up the process and jump over the entry barriers associated with entering a new market, allowing you to penetrate quickly, safely and more economically than setting up your own team there; after all, why would you do that if we already have a specialised local sales team on the ground?