Kreston BA Argentina
April 11, 2024
April 11, 2024
March 25, 2024
Kreston Global has today welcomed Kreston BA Argentina to the Kreston Global network.
Kreston BA Argentina has been established to serve local private, public, and listed enterprises as well as international companies looking to invest in Argentina, at every stage of their business lifecycle.
Kreston BA Argentina is run by Ricardo Gameroff and Esteban Babino, who have nearly six decades of local and international experience from big four accounting firms between them as well as holding CPA, CFE and MBA certifications in Argentina and the United States. They are fluent in English and possess a deep understanding of both local and global business cultures. The new firm has a total of 10 employees based in Buenos Aires and provides a wide array of customised services covering all aspects of accounting and professional needs, from tax and legal planning to business process outsourcing solutions, financial audits, corporate fraud, internal audit and risk and legal advisory. The firm’s client base includes blue-chip clientele spanning energy, mining, manufacturing, oil & gas, utilities and agribusiness.
The addition of Kreston BA Argentina to Kreston Global’s network further strengthens its Latin America region, which consists of 25 member firms across 17 countries providing a range of financial, audit and accounting, taxation and other advisory services to large and mid-sized businesses requiring inbound and outbound growth support and set up.
Liza Robbins, Chief Executive of Kreston Global, said:
“I’m delighted to welcome Kreston BA Argentina to our network. Our Latin America region is full of energetic and collaborative firms who regularly work together on client and employee initiatives. Argentina is a really important location in the region as the country embarks on a new economic strategy. With Ricardo and Esteban’s backgrounds and their vision, I have no doubt that Kreston BA Argentina will be a great addition to our network”
Ricardo Gameroff, Managing Partner at Kreston BA Argentina said:
“We are extremely energised to be joining the Kreston network and benefitting from its highly connected infrastructure full of firms who enjoy working together. It has a great name for servicing entrepreneurial international businesses around the world and we see the synergies it will bring for our clients and our new venture. ”
March 22, 2024
Investment opportunities in Latin America have developed rapidly over the last few years, with private financing opportunities in the sustainable energy sector becoming a focus over the next few years. This opportunity was highlighted in the 2023 World Investment Report, published by the United Nations Conference on Trade and Development (UNCTAD).
• The flow of foreign direct investment (FDI) in Latin America and the Caribbean increased in 2022 by 51%, representing a total of $208 billion USD, largely due to the existence of greater demand for commodities and minerals called “critical” (lithium, nickel, cobalt, graphite, manganese, among others).
• In Mexico, the second largest recipient of FDI in Latin America, only behind Brazil, the FDI increased 12% in 2022, representing $35 billion USD, with new investments in equity instruments and reinvested earnings.
• Net worth in cross-border mergers and acquisitions (M&A) in Mexico increased to $8.2 billion USD (in the year 2021 it represented less than one billion).
• In the last five years, there has been an increase due to trade agreements between countries such as the Asociación Latinoamericana de Integración (ALADI, of which Mexico is a member) and the Mercado Común del Sur (MERCOSUR).
• Cross-border M&A activity increased by 80% ($15 billion USD) The manufacturing sector recorded the highest increase in net sales, particularly in food, beverage and tobacco, chemicals, paper, and paper products.
The indicators are of interest when taking into consideration that, in the same year, 2022, the FDI reported a worldwide decrease of 12% (1.3 trillion USD) generated mainly by geopolitical tensions (war in Ukraine) that had an impact on the financial sector, which generated a lower volume of FDI in developed countries (the volume of negotiations fell by 25%, where the volume in M&A worldwide decreased by 9%).
There is a trend of increase in FDI in developing countries, including countries in Latin America where there is still a deficit in annual investment concerning their activity to achieve the Sustainable Development Goals (SDGs) related to renewable energies, as agreed in the 2015 Paris Agreement to which Mexico is a party (agreement to reduce global warming), revealing the 2023 World Investment Report that international investment in renewable energies has almost tripled since 2015, with three countries being the most benefit in 2022: Brazil, Chile and Mexico, attracted three-quarters of all renewable energy projects announced in the Latin American region in 2022.
This report also reveals that in developing countries there is no direct and significant domestic investment in renewable energies, which means that these countries turn abroad to look for financing up to three-quarters of the cost of projects in this type of energy.
The report points out that developing countries require annual investments in renewable energy for amounts close to $1.7 trillion USD to achieve the SDG targets, although in 2022 FDIs were reported for only $544 billion USD, therefore the UNCTAD makes an urgent appeal to support developing countries, so they can attract significantly more foreign direct investment for their transition to renewable energy.
It is expected that in the coming years there will be an increase in financing in developing countries to invest in the transition to renewable energy and thus achieve the SDG goals for 2030, where, for example, Banks shall have to transform their business models and risk approach to take advantage of their funds to attract a greater volume of private financing for the transition in developing countries.
At Kreston BSG we understand the impact these trends will have on our clients within the green energy sector that will be impacted by the Sustainable Development Goals (SDGs) by 2030.
Sources
Graduated in Public Accounting at La Salle University and is in the process of graduating as a lawyer from the National Autonomous University of Mexico. He is currently the Managing Partner and in charge of the Tax and Consulting Area of the Kreston FLS SC Firm in Mexico City.
March 13, 2024
Setting up a business in Mexico has been a strategy of global businesses in the region, looking for ways to sidestep geopolitical challenges creating pinch points in supply chains. This presents an opportunity in some regions, businesses pull operations geographically closer to avoid costly delays and unpredictable prices.
Mexico is a benefactor of the US moving away from manufacturing in Asia, with US firms setting up operations closer to home Mexico, capitalising on lower labour costs, geographical proximity and free trade agreements. Enrique Pastor, Tax and Business Processes Partner at Kreston FLS in Mexico City shares his experience in setting up businesses in Mexico for the last two decades.
Whether you want to take advantage of nearshoring benefits or have your own expansion plan, before establishing a company in Mexico, it is important to consider several factors.
Conduct a detailed analysis of the Mexican or North American market if you are an exporting company to understand consumer preferences, competition, and business opportunities.
The legal and regulatory requirements for operating companies in Mexico, including obtaining permits, licenses, and compliance with labour and environmental regulations, must be considered. There are various legal entities to establish a company in Mexico. The most suitable depends on various criteria, so proper advice is essential to define the most appropriate. Regulatory issues are a speciality in professional consulting; do not embark on a venture without being sure of the regulatory requirements, which can vary even by city.
Have a plan for recruiting, training, and retaining human talent in Mexico, considering cultural and labour differences. Issues such as social security costs, union relations, and other matters must be analysed to define operational strategies in the country
Evaluate the political and economic risks in Mexico, including the recent strength of the Mexican Peso exchange rate.
Although the country has good communications, its size can affect the timing and quality of supplies. Consider this before deciding where to establish the company. Trade agreements Mexico may have the highest number of treaties to avoid double taxation and treaties to boost trade, so consider that besides the North American market, there is a whole world that could buy from you.
Consider establishing in the Isthmus of Tehuantepec area, where a project connecting the Pacific
and Atlantic Oceans by rail, complementing the Panama Canal, offering shorter crossing times and competitive costs and will offer significant real estate and industrial development opportunities. This could be beneficial if your market is not exclusively North America.
Mexico offers a variety of fiscal incentives to promote investment and economic development in various parts of the country, including development zones, border incentives, and programs like IMMEX and the Inter-Oceanic Train of the Isthmus. These range from one-third discounts on the Income Tax rate and 50% off the Value Added Tax to immediate deductions for investments in specific industrial areas or sectors.
To promote foreign investment interest in Nearshoring, the federal government enacted in October 2023 a Fiscal Incentives Decree for the 20 export production sectors listed below.
The benefits, which are the accelerated deduction of investments for companies, vary from 56% to 89%
in 2023 and 2024. An additional deduction of 25% for three years for worker training expenses, focusing on human capital development, is allowed in the Income Tax. The incentives are available in all states and municipalities of the country, extending the opportunity window by one year for interested companies
The sectors benefiting from these incentives include fertilisers, agrochemicals, food products, pharmaceuticals, electronic components, medical equipment, batteries, electrical cables, automotive engines and parts, electrical and electronic equipment, and non-electronic medical devices, among others.
A fiscal incentive is also offered for the production of copyrighted cinematographic or audiovisual works intended for export. Mexico is an attractive destination for nearshoring and the domestic market due to its strategic location, competitive costs, access to the US market, and fiscal and regulatory incentives. However, it’s crucial to consider the mentioned factors thoroughly to ensure a successful establishment in Mexico.
If you are looking for advice on establishing a business in Mexico, please get in touch.
German Moya is a distinguished Tax Manager at Kreston Ecuador, serving since April 2020, and concurrently holds the position of Jefe de Impuestos & BPO at CMA CONSULTING since November 2018. With a solid foundation in accounting and taxation, German has enhanced his expertise through a Master in Financial Management from Universidad Internacional de La Rioja (UNIR) and a certification in Tax Management from Universidad Espíritu Santo. He is also a licensed professional accountant, accredited by the Colegio De Contadores Bachilleres y Publicos Del Guayas since May 2016.
Germán Moya, Tax Manager at Kreston Ecuador, explores the significance of Ecuador’s Investment Contract, a tax incentive for Foreign Direct Investment. Are reduced income tax rates, exemptions and successes in the mining sector attracting investors?
Ecuador has a tax incentive to promote Foreign Direct Investment (FDI) called the Investment Contract. This legal condition originates from the Organic Code of Production, Trade, and Investments, published on December 31, 2010.
Why sign an investment contract with the Ecuadorian State? It is a legal framework that provides protection and stability to taxpayers who apply for tax benefits.
This process begins with a request addressed to the Ministry of Production, with a detailed project description according to the forms published by the same entity. The investor must have no outstanding obligations with the State. The minimum amount to initiate a contract subscription request is USD$ 1 million. This investment can be executed over time, with the investment within the first year being at least USD$ 250,000.
One of the tax benefits generated by Investment Contracts is a remarkable reduction of up to five percentage points (5%) in the income tax rate. The cumulative reduction cannot exceed the amount of the investment or the granted term (up to 15 years) for the contract benefits (whichever occurs first).
Current legislation also benefits Investment Contract subscribers by exempting them from the Foreign Exchange Exit Tax caused by payments made abroad to import capital goods and raw materials. This exemption requires that imports have a direct relationship with the investment project. Likewise, the exemption of all foreign trade taxes is considered, except for customs service fees.
Investment
As the Ministry of Production reported in its official channels, in the last five months of 2023, the Ecuadorian government signed 17 investment contracts for approximately USD $879 million. In the first semester of 2023, FDI recorded a value of USD $107 million, representing a decrease of 86.9% (-USD $705 million) compared to the same period in 2022. The main destination sectors for FDI are
“mining and quarrying,” “commerce,” and “transportation and storage.” These three sectors recorded a positive flow of USD $117 million. The highest foreign direct investment, totalling
USD$ 92.2 million, originated from the United States, China, and Chile during the first semester of 2023.
Those making investments in medium and large-scale metallic mining are entitled to benefit from
tax stability for a specified period, starting from the subscription of an investment contract. This benefit refers to strength regarding;
a. All rules determining the taxable base of the Income Tax and the amount of the tax to be paid, in force at the date of contract subscription;
b. Concerning rates and exemptions from the foreign exchange exit tax and other national direct taxes; and,
c. Concerning rates and exemptions from the Value Added Tax for companies making investments to exploit medium and large-scale metallic mining, whose production is destined for export. This tax stability can also be granted at the parties’ request in the investment contract for companies in other sectors, including primary industries, making productive investments for the country’s development, provided that the investment amount exceeds USD $100 million. Ecuador has abundant mineral resources, making it attractive for mining investment.
Additionally, Ecuador has developed extensive legislation regulating mining activity in all its phases. It now has human resources with experience in this field, both for its control by the State and for its technical, environmental, social, and financial management. Mining projects in Ecuador are highly feasible to benefit both the country and investors.
If you are interested in doing business in Ecuador, please get in touch.
Wellington Calobrizi, Partner at Kreston KBW Auditores, brings expertise in Direct Taxes and an experience in projects with major brands. As a partner at b2finance, he established their first office in Curitiba-PR, specializing in Audit, BPO, Tax Consulting, Valuation, and IT services. With a degree in Accounting Sciences from FECAP, Wellington is known for his entrepreneurial spirit and knowledge in tax consultancy.
Tax reform in Brazil a topic that had been stagnant for decades, is gaining momentum. As a thriving economy in Latin America, the pace at which regulation is now being brought into law is testing the business industry. Recently, new tax law was given approval in the Chamber of Deputies in July 2023 and then underwent Senate deliberation by October 2023.
Once a central focus of national discourse, this reform held the promise of transformative changes within the country’s tax sphere. During this upheaval, the pressing question emerged: How would small businesses fare with these changes, and were there potential advantages awaiting SMEs? To provide clarity, BWise analysed the tax reform for clients, highlighting its possible implications for the day-to-day operations of small businesses in Brazil.
The narrative surrounding tax reform in Brazil has spanned decades, culminating in a historic milestone with the approval of the text of PEC 45/19, a pivotal piece of legislation at the heart of the reform. Several vital considerations emerged as the proposal underwent scrutiny in the Federal Senate.
Firstly, the proposed unification of taxes under the Value Added Tax (VAT) system signified a monumental shift in the country’s tax structure. Federal taxes, including IPI (Tax on Industrialized Products), PIS (Social Integration and Formation of the Assets of Public Servants), and Cofins (Contribution to the
Financing of Social Security), were slated for restructuring. Simultaneously, state and municipal taxes faced an overhaul with introducing the Goods and Services Tax (IBS). This restructuring aimed to bring coherence and simplicity to the existing tax framework.
Additionally, the reform introduced a Selective Tax (IS) targeting products that impacted health or the environment, marking a commitment to sustainability and public health. The determination of tax rates was governed by a Complementary Law, adding a layer of legislative precision to the reform. Further deliberations included discussions on exemptions and cashback mechanisms, focusing on sectors and populations with lower purchasing power.
For small businesses that fall under the umbrella of Simples Nacional, with a
revenue ceiling of up to R$ 4.8 million, the impact of the tax reform was
less pronounced. These businesses could continue to leverage the benefits of the existing regime, albeit with a shift in the tax vocabulary. Nevertheless, several considerations were pertinent:
The reform aimed to streamline and simplify the tax structure, potentially reducing the number of taxes. Even for businesses under Simples Nacional, which already followed a simplified tax model, decreased tax costs could
be contingent on the proposed rate changes. The reform introduced an opportunity for Simple Nacional companies to use tax credits, a previously unavailable feature within the regime. This alteration could lead to a more dynamic financial landscape for these businesses.
Another benefit was the possibility for Simples Nacional companies to opt for the value-added tax (VAT), although not mandatory. The decision to embrace VAT could be beneficial depending on the company’s position within the broader business chain. While suppliers or entities heavily involved in inputs might have found VAT to have positive advantages, service providers might still have considered Simples Nacional a more attractive model.
Businesses were encouraged to seek specialised accounting advice to fully
understand how these tax updates impact doing business in Brazil. This was especially vital as tax planning, facilitated by online accounting models, became an accessible tool for small businesses to evaluate the feasibility of transitioning to the VAT proposed by the tax reform. BWise can offer strategic support, empowering small businesses to secure sustainable growth.
For more information on doing business in Brazil, click here.
Tatiana Andrade, Director at Kreston KBW Brazil, is a seasoned professional with expertise in advanced English, accounting, tax management, and consultancy. With a strong background in auditing, she excels in leading teams, supported by an MBA in human development for managers. Tatiana’s commitment to excellence ensures top-tier service delivery in the complex financial landscape.
Tatiana Andrade, Partner of Kreston KBW Auditores, shares that investing in Brazil will see economic growth, driven by market reform and ESG, attracting international and local business optimism.
Brazil’s economic activity expanded by 2.45% in 2023, surpassing initial forecasts that growth would be tepid in the face of high interest rates. At the beginning of last year, private economists estimated that the economy would grow by less than 1%, whereas current forecasts indicate an expansion of 2.9%, according to a weekly survey conducted by the Brazilian central bank.
This makes Brazil the most successful Latin American economy. With a new government focus on market and tax reform and a strong emphasis on ESG, local firms are predicting a boom year, as international clients flock to its shores.
“Particularly in the second half of 2023 and in the first two months of 2024, we saw a significant increase in the demand for foreign companies wanting some type of assistance to set up or increase their business volumes in Brazil,” said Tatiana Andrade, Partner of Kreston KBW Auditores. “This shows an excellent medium and long-term scenario. As an example, the search for new international clients in our office increased by around 40% compared to the same period of the previous year, a significant increase for our international area.”
Within Kreston KBW Auditores, Andrade has noticed that the services sector is the one with the most demand for consultancy skills, particularly technology and digital marketing.
The Brazilian tax system has long been complicated and frustrating, and while reform has been promised, it is still a long way away. In 2023, the Brazilian Congress approved a major tax reform that had been held up for voting for many years. However, the approved proposal will take around 10 years to be fully implemented and divides opinion among tax experts as to how much benefit it will bring to businesses.
Andrade believes that when reform does come, it will not bring much in the way of simplification and that the increase in the tax burden will go from the current 20% to approximately 28%. But that is good news for the local office.
“We have been fielding a lot of enquiries, from national and especially international clients, who are very eager to see how much this will impact their operations,” said Andrade.
The international market is an important one for Kreston KBW Auditores, as this is where it can add the most value. International clients count on complete assistance from the opening of the company and the geographic location strategy, to assistance with tax planning. The founding partners have extensive experience in the national and international market and all came from auditing multinationals, including the Big Four.
With a new left-wing government in power that is keen to work with foreign
investors, a maturing business environment and an aggressive push for corporate transparency to aid ESG reporting, Andrade is expecting 2024 to be a successful year.
“Our strategy is to grow by 20% in relation to revenue,” she said. “We have been strengthening our team with some major hires in 2023 and now we are feeling the effects of these new hires. An interesting moment for our office is the increase in demand for ESG, our partner in the sustainability area will have a great challenge ahead. We believe that the ESG area will grow by more than 100% compared to previous years.”
ESG is an important driver for Brazilian companies as they seek corporate transparency. It means skills such as auditing will become even more important, as auditors will be key to ensuring the quality of ESG information from audited companies to investors, stakeholders and regulators.
“In Brazil, companies listed on the stock exchange must disclose in their financial statements the effects of ESG on their operations,” said Andrade. “Although it is not mandatory for all Brazilian companies, many funds only invest in those who have a well-defined ESG policy, so companies, even if they are not obliged, have sought us out to help implement ESG in Brazil.”
Technology has had a huge impact on the way accountancy firms do business and the Brazilian office now sets aside a portion of revenue to be spent keeping abreast of new developments.
“A minimum of 3% of revenue must be for investment in technology and R&D,” said Andrade. “In previous years we have surpassed the 5% mark of our revenue, but I think that has had a direct result on our annual growth, which always exceeds two digits.”
As Brazil blossoms under a new government, there is no reason why new entrants to the market cannot ride this wave of optimism.
For more information on doing business in Brazil, click here.
Discussions about ESG strategies have been becoming increasingly common on a global scale, with ESG in Brazil actively developing its own initiatives. A complex and strategic move that is shifting dynamics in the global economy, the culture of environmental, social, and corporate governance brings a myriad of issues that warrant careful analysis.
On the legislative front, the House of Representatives in Brazil passed PL 2148/15, which proposes the regulation of the carbon market in the country and the establishment of the Brazilian System of Greenhouse Gas Emissions Trading (SBCE), which sets emission caps and establishes a market for the sale of credits. For now, we are waiting for the proposal to undergo analysis and approval by the Senate.
Besides establishing unprecedented regulations in Brazil, initiatives like this significantly influence the national business environment, not only concerning domestic aspects.
In this scenario, there is optimism for Brazil and for Latin America. According to information from the UNCTAD‘s World Investment Report 2023 – United
Nations Conference on Trade and Development – foreign direct investments in Latin America and the Caribbean increased by 51%, reaching $208 billion in 2022. In Brazil, the increase was 70% ($86 billion).
According to the report, international investments in SDG sectors and activities – which relate to the Sustainable Development Goals established by the UN – also increased in 2022, resulting in the growth of projects in infrastructure, energy, water, sanitation, agricultural systems, health, and education.
Firstly, PL No. 2,148/2015 establishes a limit for greenhouse gas emissions within the corporate scope. Thus, it proposes that companies surpassing pollution levels must offset their emissions by buying credits, while those falling short of emission caps receive quotas that are tradable in the market.
The purpose is to create incentives in a way that can curb emissions and consequently the climate impacts caused by companies.
In a second stage, the regulated market of offset credits and generation of credits based on the level of greenhouse gas emissions, linked to the SBCE, comes into play. The proposal suggests a system in which Brazilian emission quotas (CBE) and certificates for verified emission reduction or removal (CRVE) can be traded.
Regarding regulation, studies already indicate that it could lead to positive economic shifts: according to research from Banco BV (BV Bank), the regulated carbon market could generate R$ 48 billion annually for the country.
In addition to encouraging new practices in business operations, the implementation of a market guided by an ESG vision brings forth debates and initiatives in the tax aspect of organisations as well. In recent years, there has been discussion about the adoption of carbon taxes in Brazil and their potential consequences in terms of economic, financial, and social aspects.
However, a point that is not always recalled and brings with it particular challenges involves transfer pricing within the context of globalised markets or even in the transfer of goods and services between companies of the same group but headquartered in different countries.
On top of the requirement that the arbitrated price complies with RFB regulations in the case of Brazilian companies–responding to the pillars of corporate and tax governance–the new adoption of ESG indicators influences the macroeconomic dynamics between countries/multinationals themselves.
Therefore, the challenging aspects related to transfer pricing from an ESG perspective encompass everything from the costs of the value chain to a more detailed analysis of a company’s risks and its transfer assets concerning sustainable practices from an organisational standpoint.
Finally, in Brazil, the investment sector is one of the drivers of ESG practices in the market. Recent studies indicate, for example, that investors in Brazil also base their decisions on ESG disclosures from companies.
Thus, paying attention to the new economic paradigms that are moving towards sustainability has become imperative for companies, not just in terms of rhetoric, but especially to remain attractive and competitive in markets where sustainability is no longer a distant goal.
For more information on doing business in Brazil, click here.
March 7, 2024
Investing in Puerto Rico has proven lucrative, experiencing an 11% growth in its economy since 2019, despite the challenges felt globally from COVID-19, a global recession and increasing supply chain challenges. So far in 2024, the International Monetary Fund records the island as having the highest GDP per capita in the Caribbean.
Puerto Rico (PR) can claim several advantages that can be attributed to this growth. It is a strategic Caribbean geographic location, offering political stability, modern infrastructure, and a highly skilled bilingual workforce (Official languages are Spanish and English). It is the main air and sea access hub in the Caribbean, with multiple flight options to and from the major cities of the United States, Latin America, and Europe.
Secondly, Puerto Rico enjoys the United States constitutional, legal, financial, and regulatory protection, including among others, intellectual property, Homeland Security matters, and banking system. The U.S. dollar is also the official currency, and no passport is required for U.S. citizens.
Thirdly, Puerto Rico enjoys fiscal autonomy and has a number of tax incentives to attract investment. Puerto Rico recently published legislation designed to boost remote PR workers. The governor, Pedro Pierluisi, signed the new act into law on January 17, 2024. This legislation builds on Act 52-2022, targeting the enhancement of the foreign private sector’s remote work force in PR.
During 2019 PR enacted legislation to compile all previous PR tax exemption laws into Act 60, that has attracted foreign and local businesses, and non-resident high net worth individuals who relocate to PR, contributing to the overall economic health of the island. The benefits cover a number of industries attractive to investors, most notably:
Among its benefits, Act 60 grants a reduced income tax rate from 37.5% to 4% on eligible activities as well as 100% exemption on distributions from earnings and profits on those activities, designed to stimulate growth in key industries and attract investors to the country. The tax decree also provides exemptions on indirect taxes (municipal license, property taxes, excise tax, among others) that ranges from 50% to 100% of exemption, making investment even more appealing to local and foreign businesses.
Non-resident high net worth individuals who relocate to Puerto Rico also benefit from additional tax grant benefits under Act 60. Also, there are other tax incentives for those engaged in providing highly skilled medical professional services (physicians), professional researchers or scientists, small and medium enterprises (PYMES), young entrepreneurs, public porters of air transportation, maritime transport services, infrastructure investment and agriculture.
This legislative update is a key component of Puerto Rico’s strategy to stimulate economic growth, attract global talent, and encourage the development of a diverse and resilient economy, emphasising the significance of investing in Puerto Rico.
If you would like to speak to someone about doing business in Puerto Rico, please get in touch.
Ricardo is a fraud, audit and risk expert with over two decades at Ernst & Young (EY), where he served as an Audit and Forensics Partner across Canada, Chile, and Argentina. He led major clients in utilities, retail, manufacturing, and mining sectors, including Coca-Cola, McDonald’s, Siemens, Fluor Daniels, and others. Ricardo is a Certified Public Accountant (CPA) in the United States, Chile, and Argentina, a Certified Fraud Examiner (CFE), and holds an MBA designation. He’s also a university professor at Universidad de los Andes and a published author on occupational fraud.
Investing in Argentina may be closer than you think. Political turmoil and economic headaches have given Argentina miles of bad press in recent years. Yet another story is that the country is opening up to overseas companies, with foreign direct investment increasing 122.5% to USD 15 billion in 2022, according to the World Investment Report published by UNCTAD.
Argentina’s economic landscape has been transforming under President Javier Milei’s leadership since his November 2023 victory. His commitment to significant economic reforms, including addressing high inflation, deregulating various sectors, and privatising state-owned enterprises, has boosted investor optimism. All these factors combine to make Argentina a more attractive destination for international companies than ever before.
However, navigating the complexities of the Argentine market requires careful planning, local expertise, and strategic partnerships. Kreston BA Argentina is positioning itself as one of the only firms that can offer all of the above under one roof.
‘Diversification is one of the best opportunities Argentina can offer firms looking to expand their global footprint, in areas such as services, manufacturing, agribusiness, energy, and mining,’ said Ricardo Gameroff, Managing Partner of Kreston BA Argentina. ‘It is rich in natural resources, is investing heavily in renewable energy infrastructure and plans to promote private participation in infrastructure projects through public partnerships.’
As well as providing investment opportunities, there is a possibility that nearshoring could become more attractive on Argentinian soil.
‘Its strategic location in South America, coupled with its access to major markets in North and South America, positions it favourably for nearshoring initiatives,’ said Gameroff. ‘Argentina can also offer a well-educated and skilled workforce, with low labour costs, while the government is keen to attract foreign investment with tax breaks and investment promotion programs.’
But there is no denying that Argentina, despite its focus on reform, still does not offer the easiest entry to the market for global companies. Gameroff feels there is a gap in the local market for the kind of tailored, end-to-end service clients are going to need if they are to establish operations quickly.
For instance, hyperinflation and currency fluctuations pose a real problem for local and international companies in their day-to-day operations. But while these problems might seem daunting, Gameroff believes they can be overcome.
It is important to understand the local economic landscape to mitigate risks and capitalise on opportunities – BA Argentina will help clients with risk management, compliance and regulatory support, as well as continuous monitoring and adaptation to anticipate changes that may affect clients’ businesses.
‘By staying proactive and agile, we can adapt our strategies and recommendations in real-time to help our clients,’ said Gameroff.
Being able to adapt to each client is what will make BA Argentina unique. ‘Our firm distinguishes itself by offering a diverse portfolio of services that can be customised for each client,’ said Gameroff. ‘We are also able to work with clients at every stage of their business lifecycle, from inception to international expansion. This simplifies administrative complexities for our clients as we can be their single point of contact.’
To offer this kind of service, everyone at Kreston BA Argentina is not only an expert in their field but also in the local market. As a member of Kreston Global, this local knowledge is partnered with a global perspective.
‘Being part of the Kreston network means we can anticipate international trends, share best practices, and equip our clients to navigate global challenges and opportunities,’ said Gameroff.
The management team brings multidisciplinary experience across diverse industries, while the partners bring extensive international experience and qualifications to the table. With backgrounds that include executive roles in firms such as EY in Canada, Chile, and Argentina, Kreston BA Argentina has a deep understanding of global business practices, regulations, and industry standards. In addition, Gameroff is a CPA in the United States and Argentina, fluent in English, and has vast experience serving international clients.
The new firm is looking to target both local businesses and international companies as it builds a robust client base across a variety of industries. Diversification and strategic partnering are going to be key to developing sustainable growth.
‘As we gain traction in the market and better understand the evolving needs of our clients, we will explore opportunities to expand our service offerings and diversify our revenue streams,’ said Gameroff. ‘This may include introducing specialised services in emerging areas such as technology consulting, sustainability reporting, or regulatory compliance. We will be keen to forge alliances with law firms, financial institutions, technology providers, and other complementary service providers, we can offer comprehensive solutions and access new market segments.
While the local economic conditions in Argentina may pose challenges, Gameroff believes that with the right expertise, strategic planning, and proactive measures, businesses can thrive in the Argentine market.
‘At Kreston BA Argentina, we are committed to supporting our clients in overcoming obstacles and achieving their business objectives despite the prevailing economic conditions,’ he said.
If you would like to speak to someone about doing business in Argentina, please get in touch.
Francisco’s academic background spans degrees in Law and Public Accounting and two master’s degrees in Business and Tax Law. He participated in the High Business Management Program at IESDE Business School. An expert in legal and tax matters, with special attention to international taxation. He advises national and multinational companies with extensive experience in wealth, succession consulting, and business restructuring operations. He has been a professor of tax matters for over 20 years. He is an active member of the College of Public Accountants of the State of Puebla, the International Fiscal Association, and the tax commission of Coparmex. He regularly contributes to various national publications specialising in tax matters, regularly participates in specialised radio programs, and has taken part in international congresses on tax issues. In 2003, he was certified through examination by the Mexican Institute of Public Accountants, A.C. (IMCP), with recognition for obtaining the highest score nationwide. He is currently a member of the board of directors of Kreston Global and the Regional Director of Kreston Latin America.
March 6, 2024
The outcomes of Latin America’s elections in 2024 will have implications for the business environment in each country, influenced by the anticipated policy directions and governance styles of the leading candidates or incumbent parties. This year, six countries in Latin America will change presidents: Mexico, Panama, Uruguay, Venezuela, the Dominican Republic, and El Salvador. Francisco Bracamonte, Tax Partner at Kreston BSG, Mexico, shares his thoughts on the changes to expect.
The only election that has taken place so far is in El Salvador, where despite the constitution prohibiting reelection, the current president Nayib Bukele was reelected. This country has had some success in reducing criminality but with serious questions regarding respect for human rights.
The rest of the countries will have elections during the remainder of the year. Mexico, the most populated country among them, will hold elections. The competition is between the candidate of the governing party (left-populist) and the candidate of the opposition alliance (centre-right).
Although it is expected that Mexico will benefit from the nearshoring process, receiving additional investments relocated from China, the depth and speed of these investments will depend on the election results. The business climate in Mexico will be tied to the election outcome because both options have different focuses in important areas. For example, the governing party aims to limit private investment in energy, particularly green energy, while the opposition proposes continuing the policy of an open and competitive energy market.
In general, elections in Latin America will share some characteristics:
a) disillusionment with democracy, particularly with traditional parties.
b) the rise of populist candidates offering easy but inefficient solutions.
c) weakening of the rule of law, ranging from Venezuela, which will not have free elections, to hybrids like Mexico and El Salvador, which have relatively free elections but with many questionable practices.
d) increased polarization and lack of open dialogue between different political groups; e) illegal money and corruption.
Despite these challenges, Latin America will present investment opportunities for multinational companies:
a) Low labour costs with a medium level of education and every day more people speaking English.
b) Except for Venezuela, most countries recognise the necessity of private investment for development and poverty reduction.
c) Minimal differences in language and culture among countries, allowing Latin America to be considered as one region for investment purposes.
d) A tendency toward low inflation and interest rates, which will accelerate GDP growth in the coming years; e) significant mineral resources and key raw materials.
There are not expected to be significant changes in the investment climate that multinational companies need to consider. Mexico will continue to be a natural destination for certain investments, particularly in automotive and other industries strongly tied to US production chains. Similarly, other countries will serve as natural markets for specific industries, such as semiconductors, software programming, mining, agriculture, etc.
Overall, significant political instability is not predicted, except for Venezuela, which has not received foreign investment for some years now. There are forecasts of social mobilizations following the inequitable elections and possibly more international sanctions.
In conclusion, Latin America is not expected to undergo major changes in the business environment, except in the event that the opposition takes power in Mexico and implements changes to energy and mining policies, which could open the door to new private investments.
If you would like to speak to one of our experts on investing in Latin America, please get in touch.
February 7, 2024
Carlos Sierra is an accomplished expert in tax planning, risk reduction, and financial consulting, boasting over 10 years of experience. Specialising in intelligent tax strategies, he helps clients navigate complex tax laws, minimising liabilities ethically and legally. His focus includes risk assessment and mitigation, ensuring accurate and timely tax filings. With a comprehensive skill set in financial consulting, Carlos aids business owners in financial optimisation and growth. He remains dedicated to staying informed about evolving tax regulations and economic trends, equipping clients with the latest insights for sound financial decisions.
November 29, 2023
The Mexican Federal Revenue Law 2024 update by the Mexican Senate is now benefitting from the recently approved Federal Revenue Law for the fiscal year 2024, marking a significant increase in the country’s projected revenues. The total expected revenue for 2024 is 9.066 trillion pesos, a notable 9.36% increase from the previous year’s 8.29 trillion pesos. This section will delve into the specifics of these projections, including the breakdown of various revenue sources such as taxes, social security fees, and other contributions.
The Senate approved the Revenue Law for fiscal year 2024. The total amount of expected revenues for the next fiscal year is detailed as follows:
A crucial aspect of the new revenue law is the authorization to contract and exercise loans. The law permits a net domestic indebtedness of up to 1 trillion 990 billion pesos and an external indebtedness of up to 18 billion dollars. This section will discuss the implications of these debt allowances and their role in the overall fiscal strategy of the government.
One of the key highlights of the 2024 revenue law is the modification of tax structures and surcharge rates. Notably, the law maintains monthly surcharge rates at the same level as in 2023, with specific rates for extensions, installments, and deferred payments. Additionally, the income tax withholding rate on interest has seen an increase. This section will provide a detailed analysis of these changes and their potential impact on businesses and individuals.
While the Senate’s approval of the Federal Revenue Law is a crucial step, the final authorization from the Executive Branch remains pending. This section will discuss the potential economic implications of the new fiscal measures, focusing on how they might influence the national economy. It will also emphasize the importance of staying informed about the evolution of these measures and their practical impact.
Although the Senate’s approval represents a significant step forward, waiting for the final authorisation from the Executive Branch will be crucial for the implementation and effectiveness of these fiscal measures. Therefore, it is important to keep informed about their evolution and impact on the national economy.
If you would like more advice on the Mexican Federal Revenue law update, please contact the Kreston BSG team.
This guide is an overview of the Mexico’s Value Added Tax (“VAT”) system, focussed on how it affects foreign businesses trading with Mexico. It is general in nature and unlikely to cover the specifics of your scenario. It should be read as such and not be construed as advice. For advice as to how your business is affected by Colombia VAT please contact a Kreston Global Colombia VAT specialist.
September 21, 2023
This guidelines provide a general view regarding the Venezuelan Value Added Tax (VAT) system. They focus on how it affects foreign entrepreneurships who trade with Venezuela. They are general and will very unlikely cover the singularities of your case. They must be read as such general guidelines and must not be interpreted as professional advice. Should you need professional advice on how VAT affects your entrepreneurship, please contact a VAT specialist of Kreston Venezuela.
September 12, 2023
This guide offers a general review on VAT system in Guatemala. Please contact us for special cases.
