In the first installment of this series, we analyzed the critical elements that every company must evaluate before entering a Latin American market: the regional context, the economic dimension, the legal framework, tax management, and integrity risks. This diagnosis is the starting point. But the diagnosis alone does not internationalize any business.

This second part answers a more specific question: how is the process executed, step by step, without leaving any gaps? What follows is a structured guide in eight phases of soft landing, geared toward practical implementation. It’s not theory; it’s the roadmap that separates companies that consolidate operations from those that accumulate costly and difficult-to-reverse errors.

Phase 1 — Preliminary Analysis and Entry Strategy

The process begins with a realistic assessment of the business and the target market. Simply analyzing the nominal income tax rate isn’t enough: viability is determined by the effective tax burden, along with company formation timelines, double taxation treaties, and sector-specific restrictions. Many companies start by operating through cross-border contracts to test the market without triggering local obligations, but this strategy has its limits: exceeding certain activity thresholds can create a de facto permanent establishment. Knowing that threshold before crossing it isn’t a technical detail; it’s part of doing things right.

With that diagnosis, the most appropriate legal structure is defined: a local company, branch, representative office, or contractual arrangement. Each alternative has different implications for control, risk, and taxation. A subsidiary offers limited liability and operational autonomy, but requires capitalization and full corporate compliance. A branch directly exposes the parent company, as it lacks independent legal personality. A hasty decision here often results in costly restructurings later on.

Phase 2 — Incorporation or registration of the entity

With the strategy defined, progress is being made in formalizing the business: drafting articles of association, registering with the commercial registry, and obtaining tax identification numbers. Simultaneously, applicable sectoral restrictions are being reviewed and the necessary permits are being obtained.

This phase has real-world timelines that are often underestimated. Incorporating these timelines into the business plan is crucial: it can define when the company effectively begins generating revenue and when its obligations start accruing.

Phase 3 — Legal representative and governance of the entity

Local operations require a key figure: the legal representative. Their role extends beyond mere formality; in several countries in the region, they can assume personal liability for regulatory or labor-related non-compliance. Therefore, precisely defining their powers and limitations is essential. And their profile matters: it’s not enough for them to simply be someone trusted by the parent company. They must have demonstrable experience in the jurisdiction, relevant training, and a genuine understanding of the market’s cultural norms. Trust without local expertise is a risk that will inevitably materialize.

The same principle applies to the advisory team. In Latin America, CVs matter. Working with professionals from the same culture, with verifiable track records and references, isn’t a luxury: it’s a minimum requirement for quality. Asking about real-world cases and comparable sectors isn’t a sign of distrust; it’s basic due diligence.

Phase 4 — Banking, financial structure and registration of foreign investment

The next step is to enable the financial transaction: opening bank accounts, complying with anti-money laundering controls, and formally registering the foreign capital. Timely registration of foreign direct investment is a prerequisite for repatriating profits, dividends, or capital. Failure to register or late registration can make it practically impossible to withdraw funds from the country, or force them to do so under significantly unfavorable conditions. This is not a minor administrative procedure: it is the mechanism that protects the investment from within.

Traceability of funds from the initial disbursement is essential. Poor initial management at this stage often becomes apparent years later, precisely when the company wants to distribute profits or divest.

Phase 5 — Transfer Pricing: Structuring from the Start

Transfer pricing is one of the biggest tax risks in any multinational expansion in the region. Every intragroup transaction—services, licenses, financing, purchase and sale of goods—must be valued at market prices, and its design cannot be a retrospective compliance exercise: it must be developed in parallel with the business model. Most countries in the region follow OECD guidelines, albeit with relevant local adaptations.
Two areas are under intense scrutiny from the authorities. First: intragroup services (payments for management, administration, or support) that are questioned when no real benefit to the local entity is demonstrated or when the margins do not comply with the arm’s length principle. Second: loans between related parties, which are subject to both transfer pricing rules and thin capitalization regulations that limit the deduction of interest.

The risks of poor structuring are concrete and cumulative: tax adjustments with penalties up to the total amount of unpaid tax, double taxation, distortion of financial statements, and contingencies that silently grow until an audit exposes them with no room for correction. Legal, tax, and accounting advisors must work in coordination from the design stage, not after problems have already materialized.

Phase 6 — Accounting, Financial and Labor Organization

With the structure in place, the accounting system is implemented according to international standards, electronic invoicing is activated where required by regulations, and an external auditor is appointed when necessary. The critical point is the coordination between local accounting and the parent company’s corporate reporting: incompatible systems and non-standardized criteria generate rework at each closing and errors that, in an audit, can have disproportionate consequences compared to their origin.

Simultaneously, the employment aspect is formalized: employer registration, compliance with salary obligations, social security, and immigration management for expatriate staff. One often underestimated factor is the profile of the local team. People with experience in the same region measurably reduce initial friction: they understand the timelines, hierarchies, and how trust is built. In Latin America, relationships precede contracts, and those who don’t understand this learn it at an unforeseen cost.

Phase 7 — Ongoing Regulatory Compliance | Compliance

Once operational, discipline is ongoing. Corporate governance, company records, data protection, intellectual property, and anti-money laundering require continuous review, not ad hoc management. Being prepared is not a reactive approach; it’s essential for operating correctly.

Phase 8 — Start-up and support

The soft landing doesn’t end with the company’s incorporation. The first twelve months are where the greatest number of contingencies arise: initial tax returns, the first financial closing, regulatory requirements, and structural adjustments. During this period, having experienced local advisors ceases to be a preference and becomes a concrete necessity. It’s not enough to have operated in the region at some point; what matters is understanding the current context, the regulatory bodies, the actual timelines, and the areas of greatest risk. This cannot be improvised or delegated remotely.

Conclusion

There are two types of companies that arrive in Latin America: those that come methodically and those that come in haste. A poorly designed legal structure gives no warning; it exacts its price when it’s least convenient. A transfer pricing policy implemented too late is no minor mistake: it’s a tax debt that silently grows until an audit suddenly exposes it. Hiring a legal representative without local experience is the kind of decision that’s regretted three years later, trying to explain why the operation never took off.

Latin America is not a hostile market. It is a demanding market that clearly distinguishes between those who arrived prepared and those who arrived overconfident. Structural errors leave their mark. But the region has room (plenty of room) for those who understand that internationalizing well is not just a competitive advantage: it is the only sustainable way to do it. Opportunities don’t wait for those who hesitate; they wait for those who arrive prepared. And that preparation, properly understood, is not a cost: it is the most profitable investment a company can make before crossing the border.