In June 2020, the Biz Latin Hub team launched a survey asking for information about individuals’ perceptions about doing business in Latin America.
We received a range of responses from 75 business owners, executives, government officials and other specialists operating in over 40 countries worldwide. 57.3% of respondents are considering expanding into the region in the future, with many expressing cautious optimism at economies’ abilities to bounce back after the COVID-19 pandemic.
Find out what the key takeaways from our survey indicate about people’s perceptions on doing business in Latin America.
Perceptions on doing business in Latin America: who took part?
75 people responded to the Doing Business in Latin America survey. Of our respondents, nearly half (48%) were business owners, operating in Latin America and across other regions of the world, including the United States, Europe, Asia, the South Pacific, and the Middle East. 29 respondents (38.6% overall) were business owners operating in Latin America.
Many survey participants were operating across more than one country. Of all respondents, 66 people (88%) noted they were working or operating their business within Latin America, and 39 respondents (52%) were operating outside of the region. A third of all respondents were running or working in a company that operates in 5 or more countries, and 16% of all respondents claimed to be operating across 10 or more countries. These were often a mix of countries based inside and outside of the Latin American region.
Countries of respondents’ operations
Cautiously optimistic for future economic outlook
Qualitative responses indicate uncertainty and concern for the short and medium-term impacts of COVID-19 on local economies.
However, a greater proportion of respondents show a more positive outlook for the economic future of their country/countries. When asked to rank their perception of the current and future state of the economies they operate in from 1-5 (with 1 being negative and 5 being positive), respondents gave the following responses:
While some working or managing a business in areas such as retail and natural resources showed concern for their governments’ abilities to lead their countries through the pandemic and resulting economic struggles, others identified opportunity for companies and economies in the long term.
In particular, respondents working in areas adaptable to the online world, such as professional services, IT and communications, risk management, and network marketing, expressed positivity at how their industry has remained strong during this time. One respondent working in IT and communications noted that the pandemic may drive “changes that will favor our company in the medium term.”* One business owner in Latin America noted the network marketing industry “is the solution to the current problem.”*
“There is a lot of uncertainty as to what will happen”
56% of respondents mentioned COVID-19 as influencing their perception of the current state of their economy/economies. Only 24% of all respondents indicated COVID-19 influenced their perception of the future economic outlook.
As a result of the COVID-19 pandemic, 13 respondents (17.3%) expect “slow recovery” of the economy, or for the market to be “greatly impacted.” This was felt within and outside of Latin America from private and public sector operators in retail, trade, consulting and professional services, manufacturing, and construction. During this time, respondents expect “significant readjustments to LatAm economies,” including in currency, tax, and trading activities.
“Service providers… will lose market share to Latin American businesses”
Despite the uncertainty, 77.3% of respondents indicated neutral or positive attitudes towards the future of their economies. Some went as far as to say they believe Latin American businesses may become more competitive in the future:
“I think service providers in traditional, more ‘established’ economies will lose market share to Latin American businesses and others based in the developing world. Not just in terms of costs but in terms of outlook, attitude, and ability.”
Respondent operating out of Canada, UK, US, and the European Union.
People and businesses may have adapted to the current global pandemic by moving their services online and operating with a more digital business model. This method of providing greater access to services may have in turn placed providers previously geographically segmented in a position to compete with each other.
Others note the potential for countries to look for alternative partners to China, for which Latin American countries may be considered.