Argentina is the second largest economy in South America with 45 million inhabitants, which more than 15 million concentrated in Buenos Aires alone. This country has a strong development potential in a wide variety of sectors: agro-industry, renewable energies, health, sport, environmental technologies, digital, … These opportunities result in particular from a certain delay compared to Northern Europe and North America.
Argentina developed strongly on the basis of European emigration, particularly Italian and Spanish, at the beginning of the 20th century. A large majority of Argentines have at least one grandparent born abroad. It is therefore a country where the inhabitants are used to seeing new people coming in all the time wishing to settle in the country.
The national currency is the Argentine Peso. At the end of the economic crises at the beginning of this millennium, the Argentine Peso was severely devalued.
As for the payment methods in Argentina, withdrawing money with international credit cards is no problem, however, bank withdrawals are heavily taxed at nearly 10%. However, it is possible to pay in US dollars almost everywhere.
Argentina is experiencing chronic economic instability. Indeed, the country is fatally affected by economic crises every 7-8 years, especially in 2001 when the country completely collapsed and went bankrupt. The country’s external debt had exceeded $155 billion. As a result, Argentines lost complete confidence in their currency and drastically rejected banking institutions. This is still felt in 2018 as Argentines change all their savings to US dollars, considering it the only safe haven. The poor and middle classes in Argentina therefore save only marginally and hoard by buying greenbacks as soon as they can.
The country is also suffering from excessive inflation, almost 25% per year, which means that the costs of each structure and selling prices must be reviewed regularly: the most delicate thing is to get consumers to accept the price increase. This is an essential variable to take into account in your business plan. Argentines constantly feel like they are being fooled when they do business. As a result, it can be very difficult to negotiate or invest.
The corporate tax rate is 35% and is then increased by a turnover tax, which varies from province to province. The level of corporate taxation in Argentina is very high compared to other countries on the South American continent, and can in some ways curb foreign investment.