Work Abroad but earn in USD

Friday, January 25, 2008

Origins of Anuva: Starting a Business in Argentina II

Would You Like An-Uva? (“Uva”=Grape)

The idea for my wine club and wine tasting service spawned about 2 years ago when I took my Dad to Mendoza. My father is a man who has never like alcohol in any form—no beer, no wine, no spirits. Not for any health reason, mind you, but simply because he didn’t like the taste. But after my own awakening to the joy of Argentine wine, I figured he might like a drink at the foot of the Andes. So when I witnessed him purchase 2 cases of a young Malbec at an out of the way bodega (winery), I thought I could make something happen from this.

I knew there was a company that was already doing similar work to what I envisioned so my first thought was to pitch them the idea to see if they were interested. With little response after a few months I stopped trying and began to gather info, money and people on my own. When my cousin became interested in the project, we decided to form a partnership and start a business. If we only knew what we were in for….

Coming up with the name alone proved to be a chore. We were almost the following: Club Argenwine, Nice Legs Wine Club, and the Argentina Wine Experience. Yuck! So we were musing about Spanish words having to do with wine that we could play with and when we happened upon “an” plus “uva” it stuck.

Anuva as it turns out also has meanings as a girl’s name in both Indian and Russian. In the former it means “knowledge” and in the latter “a new beginning.” Normally I tell a little story about the name Anuva at tastings so when we had a Russian man at one of our tastings and he confirmed for me meaning of Anuva in Russian I was beaming. Please see the following link for where I got the info: Thrilled with the multiple meanings of Anuva, we set to work executing our plan.

Starting a business in a foreign country can be more complicated than starting a business in your home country for obvious reasons, but also has advantages. The most obvious difficulty is the linguistic and cultural barrier. Many a time, mal-interpretación (misunderstandings) happened to myself and my business partner, but you learn and you move forward. The most important thing is to know what you want and to know exactly how far you are willing to go in any given deal or negotiation. Gray area makes for victimization. Especially in Argentina, where people like to do business more verbally and in person than written and over the phone, misunderstandings can arise. You may say, “that’s odd, I would think that over the phone and in writing one could misunderstand more.” Well, it’s not so much that one can understand any more or less through the different media of communication, its that writing things down, especially, gives a record of data. This is especially important when negotiating prices.

Also important when negotiating prices and running your business is know the tax structure. Are you going to be a local business in Argentina (I do not recommend this unless you want a “lifestyle” business like a restaurant or bar where you will have to be physically present constantly)? Are you going to export? Import? Have a business in another country that makes its money outside the country but deals with many other Argentina companies? This is all important not just to figure out how to move your money (from customer to merchant account) but also how your money will be taxed, what tax laws you can avoid by using different set ups, and what commissions you will have to pay to intermediaries. IVA (vat tax) is 21% in Argentina!! That means that everything that is bought or sold domestically will have this tax applied! But this is not the case for exports. No IVA on FOB prices. But beware of bank commissions as well…

Transferring money in and out of Argentina can be like trying to take off a pair of skin tight jeans that are soaking wet after a huge meal. Banks, like other massive bureaucratic institutions, love their rules, have their flunkies that do not ever attempt to think outside those rules (and in some cases do not even know them), and in general are no fun to deal with. But they are a necessary evil. So if you have to bring a lot of money into Argentina to start up your business, take the time to talk to the casas de cambio, banks, and a lawyer or escribano (literally “notary” but more like a high level contract lawyer) to make sure you know that you can transfer the money into the country AND AND AND get it out of the bank. Your money is no good unless you can use it. I speak from experience. FYI a person to person wire transfer will only allow you to withdraw 1000 USD per month from a common account here. No importa if you are Argentine or American. You can use Moneygram or Western Union but they charge a lot and have limits of around 2500 USD per person per month. So get your game plan working and hope for the best but plan for the worst.


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