If you are interested in doing business in Peru, the country offers many commercial opportunities. Among the most prominent sectors are construction, architecture, engineering services, mining suppliers, higher education services, the software industry, gourmet products, and packaging and labels for agribusiness. Not surprisingly, many foreign companies are turning their attention to Peru as a gateway to Latin America.

To start a business in Peru, creating a network of contacts and establishing meetings with the key players in the market or niche of interest is crucial. Having a local partner is essential to succeed in the Peruvian market. Peruvian businessmen value the quality of products, speed of delivery, competitive prices, and compliance with commitments. When doing business in Peru, arranging and confirming meetings in advance is advisable.

Negotiations in Peru usually start with the most senior people within the company, both in the public and private sectors. However, on occasion, middle-ranking people may also participate. During negotiations, haggling is common and is used to reach an agreement. To achieve a successful negotiation while doing business in Peru, it is vital to show mastery of the subject matter at hand, be congenial, and avoid confrontations with Peruvian counterparts.

Regarding legal issues related to doing business in Peru, having an agent or legal representative is mandatory if you want to do business with the State. The country offers a favorable legal framework for foreign investment, although it can sometimes be complicated. In addition, Peru has essential industries such as mining, manufacturing, energy, tourism, and real estate, providing opportunities for business in different sectors.

Advantages of doing business in Peru

Peru offers several advantages for those interested in doing business in the country. Next, we will mention some main reasons why doing business in Peru is an excellent option.

Despite recent economic challenges, Peru stands out as one of the most stable economies in the region. Thanks to its solid legal framework and focus on economic development, Peru has maintained a robust economy that is resistant to external fluctuations. This provides a safe and conducive environment for foreign direct investment and business growth.

Peru offers a wide range of business opportunities in various sectors. The construction industry, engineering, mining, higher education, information and communication technology, and gourmet food production are just a few examples of the sectors where entrepreneurs can find interesting business opportunities. In addition, the country has low establishment costs for foreign companies, which makes doing business in Peru even easier.

Peru is known for its abundance of natural resources. This is another crucial reason for making it an attractive foreign investment destination. The country is one of the leading mineral producers in the region and the world. The country stands out in producing copper, silver, tin, zinc, and gold. In addition, Peru has a great diversity of natural resources, from fertile soils for agriculture to a wide variety of flora and fauna, which offers opportunities for agribusiness and ecological tourism.

The most lucrative sectors to do business in Peru

For businesses looking for profitable opportunities in Peru, several sectors stand out for their growth and investment potential. Here are the main sectors that may be of interest to foreign investors:

• Tourism: Peru is a popular tourist destination thanks to its history and impressive landscapes. The hotel industry, gastronomy, transportation, and tourist services are areas where business opportunities can be found.
• Agriculture and agroindustry: With its diversity of climates and soils, Peru is ideal for agricultural production. The export of Peruvian farm products, such as asparagus, mangoes, and specialty coffees, has experienced significant growth.
• Renewable energy: The Peruvian government has implemented policies to promote the development of renewable energy in the country. The solar, wind, and biomass energy sectors offer opportunities for doing business in Peru in the generation and distribution of clean energy.
• Information technology: The information technology sector in Peru has experienced significant growth in recent years. Software development, technological services, and digital solutions offer opportunities for foreign investors.
• Mining: Peru is one of the leading mineral producers worldwide. The exploration, extraction, and processing of minerals are areas where you can find business opportunities.

It is crucial to note that each sector has regulations and legal requirements. Before investing in any business or doing business in Peru, it is advisable to conduct a detailed analysis to understand the specific opportunities and challenges of operating in each sector.

The process to establish a business in Peru

Establishing a business in Peru involves several essential steps that must be followed. First of all, it is necessary to evaluate the type of business you want to start, the place of work, the obligations, and the benefits obtained by establishing a formal enterprise.

First, it must be decided if the business will be established as a Natural Person or Legal Entity. If the second option is chosen, it will be necessary to select the business name and the type of company, considering whether it will be established individually or with partners, as well as the capital with which the business will be started.

Then, when doing business in Peru, the investor must select the appropriate tax regime for the company. This will depend on the type of activity that will be engaged in. Once these decisions are made, the next step is to formalize the business. To do this, investors doing business in Peru can register as a Natural Person or follow the process for the Registration/Incorporation of a company as a Legal Person.

If you are an investor who plans to open the business in your own or rented premises, it will be necessary to obtain an operating license. These licenses are requested in the corresponding municipalities. It is essential to contact the appropriate municipality for specific requirements and more information on obtaining an operating license when doing business in Peru. In addition, the National Institute of Statistics and Information’s (INEI) Geographic Information System for Entrepreneurs (SIGE) can be used to verify the existence of similar businesses in the area where you want to establish your own.

If investors need to hire staff to start a company, it is vital to consider the labor law and obligations that this implies. Finally, depending on the type of products to be sold, it may be necessary to obtain special permits. Remember that these are the general steps to establish a business in Peru, and it is crucial to investigate and comply with the specific requirements of each case.

The culture of doing business in Peru

Some specific practices and customs characterize the business culture in Peru. First of all, it is common for meetings not to start at the established time. Despite this, it is advisable to arrive on time as a sign of seriousness and respect. Business meetings are usually held in the morning from 9:00 a.m. to 12:00 p.m. or in the afternoon from 3:00 p.m. to 6:00 p.m.

The most common greeting in business is the handshake for both men and women. However, among people in a friendly relationship, it is common to use hugs, pats, or kisses on the cheek for women. During the greeting, touching the other person’s arm with the left hand is common, especially among men.

In conversations, it is crucial to consider the volume and tone of voice since Peruvians tend to speak in a low voice and consider speaking loudly disrespectful. In addition, when doing business in Peru, avoiding ideological or political discussions is advisable since they can affect commercial relations.

• As for negotiations, they usually start with the most senior people within the company, whether private or public. However, representatives of middle-level positions can sometimes participate, especially if the meeting concerns the transaction’s technical aspects. During negotiations, it is common to use “bargaining” as part of the process, both in large deals and everyday life.
• If you want to do business with the State, having an agent or legal representative is mandatory.
• Regarding business opportunities in Peru, construction, architecture, and engineering services, suppliers for mining, higher education services, the software and ICT industry, gourmet products, as well as containers, packaging, and labels for agribusiness stand out.
• To start a business in Peru, it is essential to establish a network of contacts and have a local partner. Peruvian businessmen value the quality of the products, the delivery opportunity, competitive prices, quality and quantity compliance, supplier certifications, and the absence of intermediaries.
• Regarding cultural barriers, the handshake is the most common greeting when introducing yourself.

Legal environment for business in Peru: A detailed overview

The legal environment for business in Peru presents important aspects that must be considered. One is the need for local support to set up and run a business. This involves providing detailed information, such as identifying the personnel in charge of the management and administration of the company.

Another relevant aspect in Peru is transparency in business practices. Corruption remains an issue to be dealt with in the country. Therefore, companies must maintain legal and transparent business practices to comply with Peruvian law. Additionally, Peruvian law recognizes corporate criminal liability applicable to bribery, emphasizing the importance of maintaining ethical and transparent business practices.

Doing business in Peru presents an array of enticing opportunities for both local and international entrepreneurs. The country’s strategic geographical location, boasting access to multiple global markets, serves as a gateway for trade in South America. Peru’s commitment to economic liberalization and open-market policies has created a favorable business environment, promoting foreign investment and stimulating growth across various sectors. With a steadily growing economy and abundant natural resources, Peru offers a strong foundation for flourishing industries such as mining, agriculture, and tourism. The government’s initiatives to streamline bureaucratic processes and enhance infrastructure further enhance the appeal of investing in Peru. Additionally, a young and increasingly skilled workforce and an expanding middle class contribute to a growing consumer market ripe with potential. As political stability becomes more entrenched and efforts to improve transparency and governance continue, the allure of doing business in Peru only strengthens.

For more information on doing business in Peru, contact LATAM FDI.

Shared service centers in Uruguay are attractive due to the quality of the country’s labor force.

In recent years, Uruguay has positioned itself as a strategic point for installing Shared Services Centers (CSC). These centers have gained popularity in the current context. According to data from Uruguay XXI, today, the country has more than 50 CSCs that generate around 11,670 jobs. 80% of their operations are in captive centers, while 20% of shared service centers in Uruguay are international service providers.

Seventy-six percent of these companies are in free zones, while the remaining 24% are in the metropolitan Montevideo area. The primary industries CSCs in Uruguay cover are pharmaceuticals, commodity trading, technology, retail, and chemicals.

The signing of President Luis Lacalle Pou’s authorization for the creation of a free service zone in Punta del Este is the most recent sign that Uruguay is taking a proactive approach to attracting these types of centers to the country. What reasons lead businesses to establish shared services in Uruguay? What are the strengths of the country? What are the centers for? What possibility is there for further development in the future?

Quality workers and stability

Valentina Sena, Business Development Manager at KPMG Uruguay, indicates that the “quality of the Uruguayan labor force has played a fundamental role” in attracting the CSCs.

“When we speak with CSC leaders, it is common for them to highlight proactivity, the ability to innovate and ‘think outside the box,’ as well as the level of productivity of the Uruguayan workers,” Sena asserted.

Similarly, Ana María Peluffo, Human Resources manager of BASF Services America, declared that the differential offered by Uruguay is in its people. “Uruguayan professionals are people with an excellent learning capacity. The Uruguayan worker is a flexible, curious professional, making a lot of sense to invest because he learns, develops, and has an outstanding capacity for creativity,” he maintained.

Ignacio Del, general manager of the World Trade Center Free Zone, where close to 9,500 people work, points out that when companies arrive in Uruguay, they find good levels of technical education in terms of languages and technology.

“They find a country that has good people to integrate into their work teams, and that makes them try to establish shared service centers in Uruguay first, and as they begin to work, due to all these characteristics, they begin to increase their employee base,” Del said.

Peluffo also highlighted Uruguayan connectivity, the capacity for technology development, and excellent quality of life as essential elements when different CSCs decide to settle.

Del emphasized the country’s stability from both a political and a social point of view. “Investors know that they can come to set up shared service centers in Uruguay, and they won’t have any problems. Looking at a region in turmoil, they know that in Uruguay, the rights of companies will be respected and that government policies toward business will have some stability over time,” he said.

“Sometimes the decision to install a CSC in Uruguay occurs as part of a natural process of familiarization with the country and following the clarity of its rules of the game and its political and economic stability,” said Sena.

Uruguay XXI explained that “access to talent, together with the stability and certainties that the country offers are the main attributes that have supported both the original decision of the companies to install their CSC for the Americas in Uruguay, as well as that of betting on its sustained growth in the country.”

The labor demanded by this type of company needs to be of elevated quality, and the remuneration is commensurate.

“We are talking about a level above a call center type activity; they are jobs that have high added value,” said Jaime Miller, president of Uruguay XXI.

Peluffo, for his part, said that BASF is an organization that trains its people and that it is interested in people who can maintain performance quality at high levels and have long cycles in the company. In this sense, “the salary proposal accompanies this process. Neither much more nor much less, we want to be interesting in the sense that a professional sees an offer from BASF and does not have to pre-qualify it above or below any other market proposal,” he added.

Shared service centers in Uruguay: The future and opportunities

The chemical company BASF is restructuring its shared services center in Uruguay, BASF Services Americas. It will now have Montevideo as a hub for the region, North America, and South America.

Peluffo marked the difference between hub and CSC and explained that the hub installation implies “the integration of services into much more finished concepts in terms of providing a solution to the client.”

“In the hub, the processes are integrated, simplified, and supported by potent integration systems that automate everything that is transactional or operational. So, people dedicate themselves to doing much more value-added work, understanding customers, development, and providing new solutions,” he added.

Around 600 people are employed at Uruguay’s BASF shared service center today. With the restructuring process and the hub installation in Montevideo, the company aims to generate another 200 positions for Uruguayan workers by the end of 2023.

From Uruguay XXI’s perspective, they understand that this increase in the functions carried out by the CSCs is the result of a shift from a specialized model with processes disseminated in different centers without coordination among themselves towards multifunctional CSCs. These shared services centers in Uruguay share unified governance for the various functions, translating into better performance focused on particular regions.

Furthermore, they consider moving from transactional processes, which remain the majority within the CSCs, towards activities with greater added value.

In the future, Robotic Process Automation (RPA) will increasingly be a part of Uruguayan CSCs. This technology reduces the effort of routine tasks, frees up resources to focus on higher value-added tasks, generates better data for analysis and decision-making, and optimizes human resource management, making it possible to offer improved and more efficient services.

Here, new opportunities arise for shared service centers in Uruguay. “The weakness that Uruguay had before was that it did not have many people. It is no longer so important today because a robot does the most repetitive transactional part. The added value part is done by qualified personnel, so we have a better position there because we can become a high-added value shared service hub, where the number of people and costs don’t matter so much, but rather the quality and level of services that are provided,” said Miller.

Options for locations of shared service centers in Uruguay

The Uruguayan government has shown signs of wanting to attract investors not only to Montevideo but also to other regions of the country, which it considers to have the potential to house CSCs and become additional poles of development.

In this sense, in 2021, the president of Uruguay, Luis Lacalle Pou, signed the authorization for the creation of a service-free zone in Punta del Este, and the World Trade Center Punta del Este will be the first service-free zone to be installed in the country’s leading tourist venue.

The general manager of the WTC Free Zone in Montevideo, Ignacio Del, said there is confidence that “many people want to go and live in Punta del Este and work there. In the same way, it will become an attractive hub for companies to set up shared service centers in Uruguay.

For the president of Uruguay XXI, it is always convenient to have a diversity of locations, especially considering that there is a tendency for Punta del Este to house residents permanently. “That there is a free zone there will add to the attractiveness of Uruguay. This sends a message that global services are important to the Uruguayan government’s agenda. These are very positive initiatives that seek not only to expand or broaden the base from which services can be provided but also to decentralize,’ maintained Peluffo.

Sena understands that Punta del Este is an attractive option not only for shared service centers in Uruguay that decide to set up from scratch but also “for CSCs already established in Montevideo who want to have a satellite center there, which allows them to attract new employees and/or expand its operations.

The Salto Grande region and the department of Rivera in Uruguay are also seen as having the potential to attract CSCs.

According to Miller, Salto and Rivera have “great potential” since, with the advance of teleworking, the importance does not depend on the center’s location but rather on the abundance of qualified human resources that can be found in the area. “Medium-sized cities are increasingly attractive for companies looking for alternative sites to set up operations,” he added.

“Rivera is another important place due to the ability of much of the workforce to speak Portuguese. In this sense, if Uruguay could generate a policy that makes it easier to sell services to Brazil, Rivera would undoubtedly be a place where an additional pole for shared service centers in Uruguay could be established,” explained Miller.

 Conclusion

Uruguay stands out as an excellent destination for establishing shared service centers due to its blend of a skilled workforce, strategic location, and stable business environment. With a well-educated talent pool proficient in languages like English, Spanish, and Portuguese, the country offers a resourceful workforce capable of delivering high-quality services across various domains. Its favorable time zone ensures convenient collaboration with North and South American markets. Political stability, low corruption levels, and a supportive government provide a reliable and secure business environment. Moreover, the country’s modern infrastructure, coupled with competitive labor costs, enhances the operational efficiency and cost-effectiveness of shared service centers in Uruguay. Uruguay’s combination of skilled human capital, geographical advantage, and conducive business atmosphere makes it a compelling choice for companies seeking to establish efficient and successful shared service centers.

For information on establishing a shared service center in Uruguay, contact LATAM FDI.

Introduction

The Association of Latin American Integration (ALADI) is a significant regional organization that has played a crucial role in promoting economic integration and cooperation among its member countries. Founded in 1980, ALADI has facilitated dialogue, trade, and economic development within the Latin American region. Its mission revolves around fostering economic cooperation, advancing trade liberalization, and enhancing the well-being of the citizens of its member nations. This essay delves into the history, structure, objectives, achievements, and challenges faced by ALADI, highlighting its critical contributions to Latin American integration.

Historical Background

The Association of Latin American Integration traces its origins to the Treaty of Montevideo of 1980, formally establishing the organization to promote Latin American economic integration. This treaty replaced the Latin American Free Trade Association (LAFTA) that existed since 1960. The transition from LAFTA to ALADI represented a shift from a predominantly trade-focused approach to a more comprehensive strategy encompassing economic cooperation, industrial development, and broader regional integration. The features of the Treaty of Montevideo included:

Comprehensive Objectives: The treaty expanded the scope of the organization’s objectives beyond traditional trade-focused goals. While LAFTA primarily concentrated on trade liberalization, ALADI’s objectives encompassed broader aspects of economic integration, including industrial development, investment promotion, and cooperation in various sectors.

Flexible Integration: Unlike the previous trade-centric approach of LAFTA, the Treaty of Montevideo recognized that member countries had different levels of development and varying economic priorities. This understanding allowed for more flexibility in integration efforts, considering each member nation’s specific needs and capacities.

Principles of Equality and Non-Discrimination: The treaty emphasized the principles of equality and non-discrimination among member countries. This approach ensured that all member nations had equal participation and opportunities within the organization’s programs and initiatives.

Gradual Tariff Reduction: The treaty introduced an incremental and phased approach to tariff reduction among member countries. This approach acknowledged the need for a structured transition period to minimize disruptions to domestic industries and economies.

Harmonization of Customs Procedures: The Treaty of Montevideo highlighted the importance of harmonizing customs procedures among member nations—this measure aimed to facilitate smoother cross-border trade by reducing administrative barriers and delays at customs checkpoints.

Institutional Framework: The treaty established the institutional structure of ALADI, defining its decision-making bodies, committees, working groups, and their respective functions. This structure provided a framework for member countries to engage in discussions, negotiations, and cooperation across various economic sectors.

Cooperation in Non-Tariff Areas: In addition to trade and tariffs, the treaty emphasized cooperation in non-tariff areas, including industrial policy, investment promotion, agriculture, transportation, and energy. This multifaceted approach recognized that economic integration required collaboration in various sectors beyond trade.

Safeguard Mechanisms: The treaty included safeguards to address the potential adverse effects of liberalization on domestic industries. This demonstrated a commitment to balance liberalization with protections for sensitive sectors.

Sustainable Development: The treaty underscored the importance of sustainable development and environmental protection as integral components of regional integration. This approach acknowledged the need to balance economic growth with environmental preservation.

Technical Assistance and Capacity Building: The treaty highlighted the significance of providing technical assistance and capacity-building programs to member countries. These initiatives aimed to enhance the capabilities of less-developed nations to actively participate in integration processes.

Structure and Membership

The Association of Latin American Integration membership comprises thirteen Latin American countries, spanning from Mexico to the southernmost tip of South America. These member nations include Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Peru, Uruguay, and Venezuela. The organization operates on the principles of equality and non-discrimination among its members, allowing them to participate in various programs and initiatives based on their specific interests and capacities.

ALADI is guided by a system of specialized committees and working groups that address diverse areas of economic cooperation, including trade, industrial policies, investment, transportation, and more. These committees are platforms for member countries to discuss common challenges, share experiences, and formulate joint strategies.

Objectives and Achievements

The Association of Latin American Integration has core objectives encompassing a range of goals to foster regional integration and development. These objectives include:

Trade Facilitation: ALADI seeks to facilitate trade among its member countries by promoting the reduction of tariff and non-tariff barriers, harmonizing customs procedures, and simplifying trade documentation.

Economic Cooperation: The organization fosters economic cooperation through the exchange of information, best practices, and experiences in various sectors to promote sustainable economic development.

Industrial Policy: The Association of Latin American Integration supports formulating industrial policies that enhance competitiveness, innovation, and productivity, contributing to the growth of regional industries.

Infrastructure and Transportation: The organization promotes the development of regional transportation networks and infrastructure, facilitating the movement of goods and people within the region.

Investment Promotion: ALADI works to attract foreign direct investment to the region by creating a favorable environment and offering incentives for investment.

Achievements

Over the years, the Association of Latin American Integration has achieved notable successes in furthering Latin American integration:

Trade Agreements: ALADI has negotiated and implemented trade agreements among its member countries, fostering intra-regional trade and reducing trade barriers.

Harmonization of Customs Procedures: The organization has facilitated the harmonization of customs procedures, contributing to smoother trade flows and reduced transit times.

Infrastructure Development: ALADI has supported infrastructure development projects promoting economic connectivity, such as regional transportation networks and energy integration.

Challenges and Future Prospects

Despite its achievements, ALADI faces several challenges in its pursuit of deeper regional integration:

Divergent Interests: Member countries have varying economic priorities and levels of development, which can lead to differences in approach and hinder cohesive decision-making.

Institutional Strengthening: ALADI’s institutional capacity and resources must be strengthened to address the diverse challenges faced by the region effectively.

Global Competition: In a rapidly changing global economic landscape, ALADI must remain adaptable and innovative to compete effectively and secure its position in international markets.

Conclusion

The Association of Latin American Integration (ALADI) has emerged as a critical player in advancing economic cooperation and integration within the Latin American region. Through its commitment to promoting trade, industrial development, and economic cooperation, ALADI has contributed significantly to the growth and development of its member countries. As the organization continues to address challenges and adapt to changing global dynamics, its role in shaping the future of Latin American integration remains as crucial as ever.

Industries have faced many challenges during the last two years. Among these, the latest trends are related to the so-called energy crisis, the conflict between Russia and Ukraine, elevated global inflation, and the tightening of monetary policy that has slowed economic growth.

However, mining is one industry with the best know-how to adapt to changes. The mining industry in Chile is an example of this, thanks to factors such as resilience, adaptation, and exploitation of its main product, copper.

Despite a significant price swing, the price of copper has held up well. It is currently trading around USD 4.1 a pound. This price is supported by very low inventories and increasing supply disruptions. In this context, the mining industry in Chile continues to generate comparatively strong cash flow, which Fitch Ratings expects to remain at similar levels towards the end of 2023.

This vision is shared by institutions such as the National Mining Society ( Sonami ), which predicted growth in the sector between 6 and 7%, with a copper production close to 5,700,000 tons.

Undoubtedly, the mining industry in Chile is experiencing an important reality, which must be strengthened with the best talent, a vision of growth, and strategic allies that help strengthen the value chain through liquidity.

The mining industry in Chile’s approach for 2023

According to data from the Chilean Ministry of Mining, the current mining portfolio consists of 51 projects, which implies investments of the order of US$68 billion.

Data like this make us understand even more why mining is essential for the development of Chile; it significantly contributes about 12% of gross domestic product (GDP), 60% of exports, and 20% of the country’s tax revenue.

That data is encouraging, but there are other things the mining industry in Chile is doing to ensure growth. The mining sector in Chile seeks to promote “green hydrogen” during 2023. This effort is currently limited to pilot projects for autonomous machinery but is showing excellent prospects.

Note: Green hydrogen refers to hydrogen obtained through the use of renewable energy in its production, which makes it a clean, sustainable fuel with a zero pollution index that can be key not only as an energy vector but also as a material.

Currently, the exploitation of this resource identifies a potential of more than 1,800GW for renewable energy generation in the country. According to the Chilean hydrogen association, this figure represents 70 times more than the current capacity. This approach points directly to 2030 when the sector expects the green hydrogen market to reach more than US$30 billion annually in Chile.

Along with the use of best practices, mining concessions constitute another vital topic for the sector this year. Currently, the mining industry in Chile operates under annual payments for the right to explore and/or exploit minerals; Although these rates are low compared to other countries and some concessions are indefinite, it is a reality that the model has not been able to encourage the exploitation of mineral resources as much as is desired.

The idea is to improve practices towards more environmentally friendly exploitation so that companies can respond to responsibility criteria that help enhance the eligibility of scalable projects.

Another major project seeking consolidation in 2023 is the use of technology focused on making processes more efficient and the consequent savings attractive to any investor. An example is the Chilean mining companies that are already beginning to use, for example, automated drillers in the mines, which reduce the excavation costs per ton by approximately 30%.

Undoubtedly, this year’s focus is to recover the rhythm lost during 2020-21, but with a view to a more environmentally responsible industry made stronger by Chile’s best talent.

The labor force is critical to the growth of the sector

The mining industry in Chile views the workforce based on a nine-year plan: 2021-2030. The idea is to compare what is currently available against what is expected to be required in 2030.

From this perspective, the estimates for 2030 suggest that companies will have to attract more than 25,000 workers due to the combination of retirements and the creation of new jobs.

On the current distribution of talent, the Chilean Mining Skills Council (CCM) details in its study “Workforce of the Chilean Large Mining Industry 2014-23” that the most significant demand for human capital is in mechanical engineers, electrical engineers, and equipment operators (mobile and fixed), which as a whole represent an accumulated demand of around 18,472 workers. This figure is equivalent to 73% of the total.

Another relevant fact about the labor force in the mining industry in Chile is that, although during 2021, a slight contraction was observed in the proportion of workers residing in the same region where they are employed, the local labor force continues to predominate, representing close to 73 % from the workers. It should be noted that in 2020 the mining industry increased local hiring by more than six percentage points compared to 2018, a difference that rises to 15.7 points in the case of supplier companies.

Today, local employment already appears as a highly relevant factor for obtaining the social license to operate mining operations, and it turned out to be a critical factor in maintaining operational continuity during mobility restrictions resulting from the COVID-19 pandemic.

Participation of women in the mining industry in Chile

Something to highlight within the mining industry in Chile is that although mining has been seen as a job almost exclusively for men, little by little, the gender gap in the sector has decreased.

According to the CCM, 91% of the companies in the sector in Chile indicate as a priority having policies aimed at promoting the participation of women. In comparison, 52% already have explicit goals for hiring females over the next five years.

The results of these policies are already beginning to be felt. For the first time in the decade, the participation of women in the industry exceeds 10% at a general level, while this reaches 6.4% in the industry’s main value chain.

Regarding this last point, it is essential to point out that development strategies are being formulated that make it possible to increase female participation in the industry and have more women in decision-making positions. Efforts are also being made to ensure more young women are interested in studying careers related to the mining industry in Chile.

Growth and liquidity of mining companies

One of the main problems that the mining industry in Chile must face is the constant need for suppliers of working capital to develop projects. The long terms of approval and cancellation of delivered work (up to 120 days) generate steady cash flow lags that weaken the sector financially.

Along with this, aspects such as price fluctuations and the need for expensive investments in infrastructure and technology put constant pressure on liquidity, putting the operation at risk and the life of any mining company.

For this, factoring, or advance payment of invoices, becomes a solution for financial challenges, the basis of any operation. The idea is to allow any company in the sector to obtain financing quickly and efficiently without compromising growth.

Factoring works in different ways, either as a secure source of financing with shorter response times than in other financial products or even strengthening the company-supplier by helping to manage payments to suppliers, allowing optimization of administrative and operational expenses. Factoring can effectively solve Chile’s mining industry’s cash flow challenges.

The mining industry holds significant importance for Chile, playing a crucial role in its economy and development. It has a central place in Chile’s economic and social fabric. Its contributions extend beyond the extraction of minerals, influencing various sectors and aspects of the nation’s development. The ongoing efforts to balance economic gains with environmental sustainability will likely shape the industry’s trajectory in Chile.

Get in touch with LATAM FDI with assistance in your foreign direct investment projects.

In the ever-evolving global landscape of international business, foreign direct investment (FDI) is pivotal in fostering economic growth and innovation. Among the myriad investment opportunities available, establishing contact centers in Paraguay has gained prominence due to the increasing importance of customer engagement and support. Paraguay, a vibrant South American nation with one of the best climates for doing business in Latin America, stands out as an ideal destination for foreign investors aiming to set up contact centers.

This year’s projection for contact center business expansion in Paraguay is 32%; by 2024, it could reach 40%. These figures are according to the Paraguayan Chamber of Contact Centers and BPOs (Capacc). Its vice president, Arlette Barrail, mentioned that this projection is of the conclusion reached by a study developed by international consulting firm Frost & Sullivan.

Compared to other countries in the region, the country’s competitive advantages for setting up contact centers in Paraguay lie primarily in the fact that the quality of human resources in Paraguay generates excellent opportunities for foreign investors. This is because most of the country’s population (approximately 70%) is under 35 years of age. In addition to this, the Paraguayan workforce speaks with a neutral Spanish accent. Several other vital variables make establishing contact centers in Paraguay an attractive option. Among them are:

Economic Advantages

Paraguay boasts a robust economy characterized by consistent growth, prudent fiscal policies, and a favorable business environment. The country has one of the lowest inflation rates in the region and is renowned for its stable macroeconomic indicators. Establishing contact centers in Paraguay provides businesses with a cost-effective solution, as operational expenses, including labor costs, are significantly lower than in many developed nations. This cost advantage allows companies to maintain competitive pricing while ensuring profitability.

Skilled and Multilingual Workforce

Paraguay possesses a well-educated and multilingual workforce, a critical factor for the success of contact centers. The country’s education system emphasizes linguistic proficiency in English, Spanish, and Portuguese, making it an ideal hub for companies catering to a diverse clientele. Furthermore, Paraguayan employees are recognized for their adaptability, strong work ethic, and high level of professionalism, all of which contribute to elevating the quality of customer interactions.

Cultural Affinity

Cultural affinity is a decisive factor influencing customer interactions and contributing to better customer satisfaction. Due to its migration and cultural exchange history, Paraguay shares cultural similarities with many Western countries, particularly the United States. This shared cultural background can improve communication, enhance rapport-building, and an overall positive customer experience.

Geographical Advantage

Paraguay’s strategic location within the Southern Cone of South America offers logistical advantages for international businesses. The country’s time zone is aligned with key markets in North and South America, minimizing time differences and facilitating real-time communication. This synchronization enables seamless customer support and efficient collaboration between international teams, making establishing contact centers in Paraguay convenient.

Government Support and Stability

The Paraguayan government actively promotes foreign investment through incentives, stable regulatory frameworks, and an open approach to business partnerships. The nation’s commitment to fostering an investor-friendly environment ensures that companies establishing contact centers in Paraguay can operate with confidence and security. The country has established Special Economic Zones (SEZs) and provides income tax exemptions for specific industries. Also, the VAT tax in Paraguay is one of the lowest in the region. Additionally, political stability and low corruption levels further enhance the attractiveness of Paraguay as a business destination.

Technological Infrastructure

The South American nation has made remarkable strides in improving its technological infrastructure. High-speed internet connectivity and a burgeoning telecommunications sector are key components that facilitate the establishment of modern contact centers in Paraguay. Businesses benefit from reliable communication channels and efficient data transfer, which are indispensable for seamless customer interactions and streamlined operations.

Arlette Barrail mentioned that all these factors were considered in a recent international forum in Buenos Aires, where the Paraguayan offer to the contact center sector was promoted as a country brand. During the event, representatives from Paraguay interacted with the leading players in the regional contact center market.

Regarding the prospects going forward for contact centers in Paraguay, he advocated for more joint work with the Government so that entities such as the Ministry of Industry and Commerce and Rediex (Paraguay’s investment promotion agency) can support the projects and increase interest in this business model, which generates a significant number of jobs for Paraguayan workers, as he mentioned.

Among the areas identified for proactive action, in terms of vertical industries, telecommunications, banking, and financial services are the main activities to which the sector is oriented in Paraguay. It has also begun positioning itself in other areas, such as health, retail, technology, delivery, technical support services, and back-office solutions. The annual growth of this last segment is projected to be 105.4% between 2021 and 2024.

In conclusion, Paraguay’s business climate is remarkably conducive to establishing contact centers from a foreign direct investment perspective. The strategic geographic location, skilled workforce, competitive labor costs, favorable regulations, robust telecommunications infrastructure, incentives, and political stability collectively make the country an ideal destination for investors seeking to capitalize on the growing demand for contact centers in Paraguay. By leveraging these advantages, foreign investors can establish thriving contact center operations that contribute to their success and the economic growth and prosperity of this growing South American nation.

For more information regarding establishing a contact center in Paraguay, get in touch with LATAM FDI.