There are many reasons to locate your investment in South America. Despite ranking quite poorly in official rankings by the World Bank or the Economist Intelligence Unit for ease of doing business, the region has recorded stable growth for years, regularly outpacing developed countries and some emerging economies.
What matters greatly when investing in South America is not only market intelligence but also understanding of business etiquette in the region and its component countries.
As a cultural space, South America is far from homogeneous. In fact, even individual countries, like Argentina, can exhibit major differences in customs and rules of conducting business. Buenos Aires, a surprisingly European destination, is in many respects worlds apart from interior locations. However, there are some business etiquette tips foreign investors in South America may follow:
People and relationships
Relationships between people are central to how business is done from Mexico to Argentina. Knowing your potential business partner or being introduced by a friend or family member can greatly enhance your chances of getting some advantage. Gaining trust in informal ways is a major step towards winning a contract or assignment.
Expect people to be loyal and grateful for any favors you do for them. Reciprocity is highly recommended in such cases and when somebody helps you achieve something you should be able to give back in one way or another. This mechanism is a powerful force that forms relationships.
Respect to people in authority is a social norm in most South American countries
Communication
Face-to-face contact is valued more highly than formal correspondence, email or telephone conversation. Communication in South America is heavily influenced by the use of body language and gestures and this extends to business situations. It is pointless to try to fake the local ways of expressing feelings and opinions, but natural demeanor is likely to be appreciated.
Eye contact is normal and business colleagues are expected not to avoid it. It is often associated with trust and confidence, both important values for South Americans.
Latin Americans have a reputation for being terrible at openly expressing disagreement, which might result in an impression that they accept everything you say. This is obviously not true.
Business attire
Argentina is said to be the most stylish business destination where an elegant suit and upscale accessories are something of a standard. Brazil is on the other end of this extreme, having a reputation for laid-back attitude to business attire.
Shaking hands
Be brief but firm when shaking hands.
Punctuality
It is best to arrive on time to meetings you have arranged but while investing in South America you are likely to experience quite frequent delays and quite a lot of unpunctuality from your partners.
However, it is a norm to arrange your meeting well in advance, especially if you try to contact people in authority. Their calendars tend to be packed.
How to negotiate
Small talk is very much appreciated and most people do not do gown to business right away. Allowing yourself and your colleague time to get to know each other and relax by talking about items not related to business is a good idea.
Social hierarchy is respected in organizations and people in authority will expect to talk to peers in your organization.
It might take time before your efforts result in final decisions, even though negotiations are officially closed. The decision-making process can be slow and careful.
Ted Pass is an experienced business analyst and traveler, with a special interest in investing in South America and internet marketing.