Starting a business in Argentina

EDITORS NOTE: Here is another post from our new friend Daniel K in Buenos Aires, the owner of Anuva Vinos. Having just started a business in Argentina, Daniel knows what he is talking about. This is the first post by Daniel on the subject of starting your own business in Argentina, more to come!

I believe that starting a business in Argentina, or any country really, begins when a great idea meets the inspiration to execute the legwork involved in taking the idea from concept to reality. After doing tremendous amounts of research, planning and strategizing, the business (if the initial idea was good enough) simply requires DOING the work involved. Much easier said than done.

But what would the difference be in starting a business in Argentina vs. starting a business in the U.S. or some other country?
1.Knowing the culture and language: which then effects your…
2.Business Plan.
3.Sales, Marketing, Operations, Management, Accounting, Finance, Legal.
4.Execution.

Going in order, knowing the culture and language of the place where you want to do business is absolutely crucial. This part of starting a business feeds into the rest of the aspects I have outlined above as well, and may even be the inspiration for your idea. If you really understand the culture of where you reside—for example Argentina—and can make accurate comparisons to other cultures of perhaps where you come from, you can see the opportunities in the market.

Argentina, for example, tends to be a less organized, more laid back, “traditional” culture, where Spanish is by far the predominant language. If you expect things to run the way they do in your home country, forget it. You will drown. You must be able to adapt to their way of doing things because, as previously referenced, “Es así” (that’s the way it is). So if you go into the DGEP or INV or AFIP (various governing bodies—secondary school, viticulture, and taxes, respectively) and expect that they will know how to get the appropriate forms in order for a student exchange, wine analysis or registration of a monotributista (like a sole-proprietor) be patient, because you will have to go to several different floors, offices, stand in different lines, etc. in order to get your questions answered. Also, in this instance, the importance of knowing the language on a fluent level cannot be underestimated, as government officials tend to not know English. If you have access to a large amount of capital, however, you may pay bilingual lawyers and accountants to do these tramites (paperwork) for you. But they will certainly charge you for it.

The Argentine government is also only barely arriving to the digital age. In fact, all of the government offices that I have been to still require in-person signatures and sellos (stamps or seals). Only recently have online forms and downloads become available. Expect to have to go in person, expect to have it take twice as long as you think it will, and expect to have to go back at least once because the person who attended you actually gave you the wrong information. Not out of malice, but simply a very narrow view of what they do. I find it to be tremendously similar to any other bureaucracy.

Remember also that many operations require a DNI (Documento Nacional de Identificación) which can be obtained in several ways. The easiest is to marry an Argentine, although many would argue to the contrary about the relative “ease” of this method. The Visa por Rentista can also be obtained fairly easily, but does require a lot of paperwork and patience. The basic requirement for it is proof of solvency. Many of the other forms of obtaining a long-term visa, most of which include the right to obtain a DNI, can be found at the following link, which of course, is only in Spanish—clear evidence of the need to understand the culture and speak the language. Argentina Ministry of Interior - Immigration Information

Learning the Language

Its been more than a year since I've been living in Argentina and I wanted to respond to this question about how long it takes to learn the language and what my experience has been.

Reader's Question

I'm thinking about moving to Argentina, but my Spanish isn't that great. I read some of your early articles and saw that you, too, moved there without being fluent in Spanish. How easy/difficult has it been? Do you enjoy it? Do most Argentines know English? How long did it take until you could have meaningful conversations with people?

Having Fun Learning Spanish

For a lot of us, this is a very relevant question. Moving overseas is stressful enough, but learning a foreign language can be a scary prospect. I can tell you that from my experience, it hasn't been easy. However, it can be really fun as long as you surround yourself with people who don't mind giving you a helping hand.

Over the last year, I've laughed a lot with my friends over the mistakes I've made and they've been more than willing to correct me and teach me things. People who are used to hearing you speak in English also find it really funny when you start using some of the local slang with them. All this makes learning the language more fun.

Speaking in English

Although many Argentines do speak English, I've found that, at least in a social setting, you'll have a hard time getting them to speak it. Most are very embarrassed about their level of English. They have this idea that if they are going to speak a foreign language, they should speak it perfectly or else not at all. Two crazy examples...

I've been dating a girl for 2 months now and the entire time she's said perhaps 10 sentences to me in English. It isn't due to a lack of ability either. She can watch a movie in English without subtitles, read an English book, and even go to an English-language theater. During the day she occasionally speaks to English speakers in her job. However, outside of a work context, she just won't speak it.

In fact, when we starting dating, she went and enrolled in an English class. It sounds crazy, you have the opportunity to learn and improve your English for free, but instead you go and enroll in a class and pay someone to talk with them. Yet, that's the attitude you'll find here.

Another example happened at a party about a month ago. I met a girl there who worked as an English teacher. She was Argentine. However, with all her friends there, she wouldn't speak English with me. My guess is that she thought I would critique her English in front of her friends or something. Due to these experiences, I think expats shouldn't hold out much hope for people to speak English with them outside of a business setting.

Making The Effort

Since the beginning, I never lived with a host family here (always had my own apartment) and I spend most of my day working in an office where everyone speaks English. In addition, there's an English-language newspaper here, there are movies and TV in English, and even expat bars. Once you get yourself a secretary who can take care of all the daily chores like paying bills, translate when needed, etc., it actually is possible to live in Buenos Aires without learning Spanish.

For my first 6 months or so, I was like many of the Argentines I described above -- I was embarrassed about my level of Spanish and didn't like using it. I felt like everyone would think I was an idiot for speaking incorrectly. I wasted a lot of time by not practicing when I had the opportunity to do so. I told myself I wasn't doing anything wrong, since I kept up with my Spanish classes. However, I could have been doing a lot more to immerse myself.

No Light-bulb Moment

I used to think that one day, after x-number of Spanish classes or after speaking for so long, that I'd wake up and suddenly be able to start understanding things. Well, learning a language is not like that. It is a very gradual process and sometimes you won't even realize that you're actually learning.

There's no magic moment where you just understand everything. Each day you pick up a few more words, improve your accent a little, improve your grammar, get more confident speaking, etc. In fact, the only time I realized how much I'd advanced is when I started speaking to people I hadn't seen in a few months. They would be the ones who would tell me that my Spanish skills improved quite a bit.

Opening Up New Possibilities

Once of the greatest things about learning the language is that you open up a lot of new possibilities. I have friends now who don't speak English. I'm able to communicate directly with business partners, whereas before I needed a translator. I only recently realized just how funny some people are.

However, perhaps the best benefit is that I'm able to date much more successfully. People say that love is a universal language and men and women from anywhere can communicate without words -- bull! If you can't talk to the person sitting across from you, unless you're Brad Pitt, you have about a 0% chance of anything happening.

So, I wish all you language learners out there plenty of good luck and keep practicing! It'll make your time in Argentina a whole lot more enjoyable.

Finally Starting Spanish Lessons

After being here a little over a month, I took the plunge on Monday and went down to IBL to register for Spanish classes. I made the mistake of walking in and speaking in English when I arrived -- a habit I developed at my office. If I know someone speaks English I just start talking to them in English and not in Spanish.

Well, they pegged me as a beginner and handed me a placement test. Thirty minutes later I had finished the test and turned it in. It was the "level 1" test and so I scored a perfect score. Seeing that, they gave me the test for level 2. This time I had 2 or 3 errors. They apologized again and brought in the test for level 3. This time I managed to get only about 50-60% of the answers right -- putting me level 3 territory.

After they started going over my incorrect answers on the level 3 test, the teacher stopped herself and said, "Wait a minute, you are taking a level 3 test, we should be talking in Spanish." Well, the moral of this story is -- when you go in to a language school, try to speak as much of the language as you know -- otherwise you'll be spending an hour and a half taking language tests.

After being here a month, I've been amazed at just how little Spanish I've actually been forced to use -- much less than the average tourist or immigrant. Here in Argentina they have English-language TV, an English newspaper, and English menus in restaurants. In addition to that, I work with English-speaking coworkers who are focused all day on selling services to English-speaking customers. It just so happens that all my friends here speak English as well. When I go see a movie this weekend, that'll be in English too.

So, here come the Spanish lessons. It looks like I'm going to need to make a concerted effort to actually learn Spanish while I'm here. It's not just going to arrive in my brain through osmosis. Darn, and I thought it was going to be so easy!

Argentine Wines

What a crazy week its been. I've been so busy this last week there hasn't been any time to write blog entries. Well, on Saturday last week, I was invited to dinner by the mother of one of my employees. In addition to preparing a fantastic meal and indulging my pathetic attempts to speak in Spanish, she gave me a list of Argentine wines to try. I thought I'd share the list here for anyone looking to try some Argentine wines once they get here:

List of Argentine Wines

• Castel Shandon
• Don Valentin Lacrado
• Luigi Bosca
• Carrascal
• Font de Cave
• San Telmo

At dinner we were served the Don Valentin Lacrado and I enjoyed it. I haven't tried anything from the rest of the list yet, but perhaps someone else can add their suggestions (Argentine wines only please).

Working in Buenos Aires

A reader wrote in asking about seeking employment in Argentina. I'd like to address the question as best I can and then provide some other alternative recommendations. As always, comments first, response second.

Reader's Comments

I just returned from Buenos Aires yesterday morning and I'm already DYING to go back. I noticed your posts on blogspot are about a year old. How are things going for you these days? I'm extremely interested in relocating... the only problem is that I LOVE my current job. My friends have tried to convince me to apply for a Fulbright, but I don't speak Spanish.

Any advice you have on making a living down there for people who don't speak the language would be great.

Making a Living in Argentina

So, you don't speak Spanish, but want to try and find a job in Buenos Aires. I've received a lot of questions about this lately -- people who want to go to Argentina and then find work. Without Spanish language skills it will be hard to do. Since this is such a common request, I went ahead and contacted a few HR people I know to see if they'd look into this for me. Maybe it will be feasible to have a sort-of "reverse HR search", where recruiters try and match up employees to jobs rather than jobs to employees.

Mainstay Expat Jobs

The standard jobs for expats who don't have the language skills include teaching English, working in the tourism industry, or buying a tourism-oriented business like a hotel or tour operator. These are all common jobs that you could look for that don't require any Spanish knowledge. However, you'd probably be competing with a lot of other expats (as well as locals) for these positions. Remember, there are a lot of locals here that speak English and might be willing to work for less than you are.

Running Your Own Business

As someone who is self-employed, I've always found it more reliable to create your own position. If you don't feel comfortable starting your own business, there are literally hundreds and hundreds of businesses that are for sale in Buenos Aires. I've seen corner stores for sale for as low as $6,000 USD and restaurants for sale for as low as $20,000 USD. As an American, your US Dollar has a lot of buying power here. You could probably very easily buy yourself a job here.

Now, you may not find owning a corner shop or restaurant all that glamorous, but that kind of business is something that immigrants without language skills have done successfully all over the world. A lot of these corner shops are run by (let's be honest) fairly uneducated people who are in the country illegally. As a successful, educated, and motivated American expatriate with business experience, you could probably do very well for yourself and out-compete these people.

Using basic EOQ ordering, forecasting, and inventory planning models, you could probably squeeze out more profit from these little stores than the current owners are getting, buy/open more stores, and repeat. Soon you've got a little chain on your hands. Business in Argentina is not as professional or computerized as the United States. People still go to a main office and wait in line to pay their utility bills! Give me a break, this is the 21st Century... modernize already!

Let's look at something besides corner shops. My line of work, project management, has had a professional organization in the US since 1969, the Project Management Institute. The Argentina chapter of the PMI only just recently opened in 1996. While I'm sure that there were plenty of companies using modern project management techniques before 1996, I'm sure the drive to open a local PMI chapter was from American and European companies operating here.

A US or European businessperson coming here and bringing modern business techniques with them will probably have one leg-up on the competition. Let me clarify that this post is not meant as an insult to Argentine business people or other immigrant owners of corner shops. Its just that I've noticed that most of the major brands here are American or European brands.

Learning Spanish On The Cheap

If, like me, you're heading to Argentina and you're serious about integrating into soceity, learning Spanish is going to be a priority. If you've been reading this blog since the beginning, you'll know that there are plenty of language schools in Buenos Aires. You can read my previous post on this issue if you want to learn more about them.

If, like me, you're busy and don't have time to take group classes, this could be a pretty large on-going expense. With the influx of foreigners into Argentina, language schools have raised prices and the going rate for private lessons is about $15-20 USD per hour. If you're like me and plan on doing 8 hours a week for the long-term, this is going to add-up quick. At $17.50, the price would be $560 USD per month.

You might be thinking I shouldn't be complaining about $500-odd dollars a month, but the businessman inside won't let me sit idle when I could cut costs.

Money Saving Idea For Group of 5-10 Expats

For $560 USD in Argentina, I could probably hire my own full-time Spanish teacher. The thing is... I don't need 40 hours a week of Spanish instruction. Scratch that... I probably do need it, but I'm not going to use it. I want to learn Spanish, but I want to have a life also. The thing is, I'm willing to bet there are 5 or 6 other expats out there who would like to improve their Spanish as well and would want 4-10 hours a week of private instruction.

Suppose 5-10 of us who were interested formed a pool. The pool could hire a Spanish instructor for, say, $500 or $600 USD / month. For the sake of example, let's say $600 since we'll be making this poor teacher travel all over town to each of our houses or offices. For $600 a month, we're buying 40 hours of instruction per week or 160 hours per month. Of course, we'd have to work the schedules out between everyone in the pool, but I'm certain that's something that could be accomplished.

By doing this, the group of us would cut our hourly cost from $17.50 USD to $3.75. That $560 monthly expense for 8 hours a week of instruction has just now dropped to $120 per month, a savings of $5280 per year.

Contact Me If You're Interested

As always, contact me if you're interested in something like this. We'd need a "group contract" or some other set of rules that everyone agreed to so that no one took advantage. We'd need to specify what happens when someone needs to go on vacation, cancel a lesson, or wants to leave the pool. Everyone would also probably have to pay a certain amount up-front. We don't want someone coming in the pool and then backing out after 1 week. There'd be a certain amount of logistics to work out, but that's not something that can't be dealt with.

I'd be happy to have my HR department to conduct the search, but we'd want to give everyone in the pool an opportunity to interview the candidates. This teacher would be teaching all of us, so we'd want to all be comfortable with the person we end up hiring.

Learning Spanish In Argentina

If you're coming to Argentina and you've decided to take Spanish courses while you're here, congratulations are in order. Not only will the porteños appreciate your attempt to speak their language, but you'll also be on your way to becoming a better ambassador of your country. If you've traveled outside the United States, even a little, you already know that Americans are probably the only people from a developed nation who do not generally speak a second language. It says something about our culture when we expect the rest of the world to speak our language, but we make no effort to learn another language ourselves.

There is no question that the best way to actually learn a foreign language is to study it directly in a foreign country. If you're coming to Argentina for the sole purpose of learning Spanish, there are several things to consider. If you're going to be in Argentina for an extended period and you want to take Spanish lessons on a part-time basis, there are other issues to think about.

Full Time Spanish If you're going to go all-out and make learning Spanish the primary focus of your trip, you first need to ask yourself, "Is Argentina the country where I want to learn Spanish?" Now, I'm not one to discourage people from coming to Argentina, just the opposite, but there are several issues to consider. Porteños have a very distinct dialect and it will be forever known to the rest of the Spanish-speaking world that you learned your Spanish in Argentina. That may be an issue for you or not; it just depends on where you will be using your Spanish. Additionally, if you want to become fluent, you'll need to really live here for 6 months or so, with a host family, if possible. Argentina isn't the cheapest Latin American country. Ecuador, Peru, or even parts of Mexico will be cheaper than Argentina. If you're going to be living in a place for 6 months, you may want to pick someplace that will be easier on the pocketbook. Even after the devaluation, prices for language institutes have not dropped. You'll be charged in dollars, not the newly devalued pesos. On the other hand, Buenos Aires offers a fantastic nightlife and a better overall living experience than Quito, Cuzco, Oaxaca, or Guadalajara. If you're going to be living in a place for six months while you attempt to become fluent, you're probably going to want to find a place where you can go out and have some fun at night. Buenos Aires fits the bill. Coming from Arizona, where the bars close (by law) at 1:15 a.m., Buenos Aires is certaily a big change. You'll find bars and clubs here that are open all night long and you'll still find people arriving at 2:00 a.m. and beyond.

Part Time Spanish Learning Spanish part time in Argentina carries its own set of challenges. First, what is your schedule like when you're here? If you're going to be traveling around the country extensively for tourism, it probably isn't possible to take Spanish lessons. If you're going to be in Buenos Aires or Cordoba, or another city for a longer period of time, you'll have more luck. If you do intend to be in the city for a good amount of time, what is your schedule going to be like there? Will you be in meetings from 9:00 AM - 6:00 PM all day? Will the weekends be your only free time? The reason you must consider all these schedule issues is that the most economical way to take Spanish lessons in Buenos Aires is typically through group classes with other foreigners. These classes are typically geared toward people who are staying with host families and learning Spanish is the primary objective of their stay in Argentina. If you're visiting on business and you're going to have work during the weekdays, it probably isn't going to be possible for you to take group classes at a language school. You're going to want to look for private individual tutoring that can work with your schedule. There are even tutors available who will come to your place of business or your hotel/apartment and tutor you there, saving you a good deal of travel time to and from the language school. Your needs will vary depending on the complexities of your schedule.

Learning At A Language Institute

If you want to learn Spanish at a language institute, there are a number of choices for you in Buenos Aires. A strong expatriate and foreign community has been developing in Bueons Aires since the devaluation and there are a number of Spanish institutes to meet the needs of foreigners who want to learn the language. Included below is a table that will get you on your way to finding a place to study.

Note: I have not used any of these institutes personally, so you will want to check references before you make a comittment to any particular school. Ask the admisstions director for a list of previous students and give them a call or send an e-mail. Just like in the United States, you're going to need to do your due dilligence before comitting yourself to any specific place. It will be difficult to change schools once you are in Argentina if you find out that you dislike the Spanish school you're studying with. So, make sure you or an assistant puts in some quality research time before deciding on a school.

No	School Name	Group Price (1 hr)	Individual Price (1 hr)
1	Argentina I.L.E.E.	$10	$16
2	Universidad De Belgrano	N/A	N/A
3	CEDIC	$6	$9
4	International Bureau of Language	$4.35	N/A
5	Latin Immersion	$8.50	$13.50
6	Asociación Argentina de Docentes de Español	$5.35	$6.42

Please Note: All prices in the above table are as of 4/11/04, using data from the schools' own websites. Peso-based prices have been converted to USD at the current exchange rate of 2.80:1. Prices & exchange rates may have changed since publication. You should check with the individual school to obtain up-to-date pricing information.

The Selection Process

As you can see from the list above, the prices vary widely. The quality and professionalism of the schools varries widely also. Remember the old adage, you get what you pay for. Before you even start to negotiate price with a Spanish school, make sure you contact their references first. It isn't even worth considering a school if they can't provide you with references and they don't want you to speak with their former students. Once you've checked references and narrowed down your list, then it is time to start the negotiating.

Hints For Getting The Best Deal

Although I never attended a langauge school, I was considering it at one time, so I did contact them to negotiate the pricing. If you are staying for an extended period (4 weeks or more) or you are coming down in a group of 2 or 3, you may be able to negotiate a discount. However, be careful about the way you go about this. Do not say, "I know you are overcharging foreigners, so I want the local price." You will not get anywhere. Remember, Argentina is a capitalist country and the businesses deserve the opportunity to make a profit. However, if you go about it tactfully and say you are looking for the best deal possible, they will respect that and probably take 10-15% off the listed price in an attempt to earn your business.

Independent Private Instruction

Although most of the language institutes offer private classes, a language institute is not your only option for private instruction. In fact, I'd urge you to consider other options as well. Going with a language institute will give you high quality instruction from teachers who are experienced teaching to foreigners. On the other hand, you're going to be paying foreign prices. Don't think for a minute that porteños pay the same rates when they go to an institute to learn English.

One excellent option (the one I ended up using) was going with an independent private instructor. The instructor I used was actually a Spanish teacher at one of the many language institutes in Buenos Aires, but she taught me on an individual basis -- she was moonlighting. This option eliminates the middleman (the language school) and lets the Spanish instructor make a little more money for herself on the side and it lets the student pay a more reasonable price. The quality of instruction is the same, the hours can be tailored to your schedule, and the instructor can come to your residence or place of business. I found it to be the ideal option.

Finding Someone To Teach You

Of course, most private instructors are not going to have websites. And the ones who are moonlighting from their day job as an instructor in a language institute are certainly not going to advertise what they are doing. So, you have to ask around to find someone. If you don't have a large network of contacts in Argentina, you can often times rely on a local to help you out. If you're being sent to Argentina by your company, surely you have a contact there in your company's Argentina office. Give them a call and ask if they know anyone. Perhaps they can give someone a call at the one of the universities and see if someone's available.

It can take some more work to find someone this way, but if you plan on taking a lot of classes and you need someone to work around your schedule, this is the best way to find someone at a reasonable price.