Professional Employer Organization (PEO) in Argentina

Expanding your business to a foreign country can seem daunting, especially if you want to operate in a large country like Argentina. As the eighth-largest country in the world, Argentina is known for its bustling economy, its significant amount of energy resources, its large range of industrial sectors, and its liberal trade policies.

Internationally, Argentina has become renowned and was even host to the recent G20 Summit. In hopes to rouse overseas investment and business activity, Argentina has created a handful of policies and agreements to entice foreign entrepreneurs to do business there.

Argentina also has great employment opportunities, with its citizens being highly educated. The country boasts a 98% literacy rate, a good portion of bilingual residents, and a decent rate of student enrollment.

Due to Argentina's economic growth and strength, foreign businesses want to bring their commercial options there. Despite the benefits of expanding operations to Argentina, some businesses prefer to test the water by testing the local market. This step is usually recommended prior to a business opening up a local branch in a foreign country.

Still, many businesses don’t know where to start when it comes to expanding their operations or even testing the markets. Hiring a Professional Employer Organization would be a great first step.

What Is an International Professional Employer Organization (PEO)?

A Professional Employer Organization, or PEO, is an organization that offers human resource support. This support includes the recruitment of employees as well as all payments, benefits, and taxes related to each employee.

These tasks are tedious and time-consuming, and with the help of a PEO, businesses can delegate these responsibilities in order to focus on the development and accomplishment of their business venture. PEO services are especially beneficial to those companies that would like to hire local employees but do not want to create a local legal body.

What Are the Benefits of Using a PEO Provider?

A PEO, or a global PEO, is a great benefit to businesses looking to expand their operations overseas. These services are especially helpful when it comes to businesses that are looking to expand in several different countries. Since cultural expectations and regulations can vary from country to country, a global or international PEO can help to pilot through these differences.

When hiring a PEO, you’re assigning the tedious payroll, benefits, taxes, and legal compliances of the country to someone who has experience handling these tasks. Hiring a PEO can help you navigate any legalities and cultural differences while expanding into new markets effectively.

In short, the benefits of hiring a PEO provider include:

Local Regulation Compliance

Foreign laws and regulations, especially those concerning employment, are complicated. These regulations are also ever-changing, and it can be difficult to keep up with them. Failure to comply with laws specific to payroll, taxes, and benefits can resort in a company receiving audits and fines.

The headache of having to navigate around these regulations can be avoided by hiring a PEO service. A Professional Employer Organization can take on the tedious tasks that come with employment law compliance. They will handle everything concerning international employment laws.

Global PEOs have an established legal presence in place throughout countries worldwide. They will help to make sure that the appropriate amount of taxes is withheld from each employee’s paycheck and that the employees are given compensation specific to local regulations.

Financial Forecasting

Financial forecasting is another complicated task often delegated to a PEO service. With an international business, financial forecasting becomes even more complex. It becomes hard to predict monthly costs thanks to factors such as currency exchange rates and international banking practices.

A PEO service will have significant experience in these areas. As such, they will be able to help businesses project accurate budgets and manage finances effectively and efficiently.

Efficient Development in New Markets

It’s difficult to develop effectively in new and foreign markets. Without proper knowledge of the international rules and regulations, it can take a long time to get a firm hold in overseas markets.

With a PEO, however, establishing a footprint in the foreign market can become that much easier and quicker. PEOs help manage payroll and benefits, navigating through changing employment and tax laws. This way, businesses can ensure that they are rewarding their international employees in agreement with local regulations.

In the end, the employees will be satisfied, and your business will develop a good reputation with both the local government and the community.

Offerings of Expanded Benefits

Benefits are an important and attractive factor for businesses. When it comes to small businesses, though, extensive benefits packages can quickly add up and become costly. Without offering a comprehensive benefits package, it can be difficult to recruit top talent.

A PEO service can assist smaller businesses in offering the best benefits possible, often in a cost-effective manner. Since workers in overseas markets may expect a common benefit that is not usually offered in their home market, offering these benefits will help in enticing potential employees.

Other Considerations

  • Cost-effective: A global PEO service will allow you to avoid hiring multiple human resource departments in various countries and markets. If you lack an overseas branch office but want to hire local staff, you can expect a reduction in recruitment and administrative expenses as well.
  • Recruitment: PEO organizations help to find the most qualified staff for your business.
  • Time-efficient: A PEO reduces the time you’ll spend on tedious tasks such as recruitment, payroll, and benefits.
  • Local knowledge: PEO organizations help your business remain compliant with foreign laws and regulations. This will help you avoid fines and penalties.

Using a PEO in Argentina

Foreign entrepreneurs who wish to register a business in Argentina have a few important factors to consider before opening their business overseas. First, it’s crucial to have an understanding of any significant laws and regulations specific to Argentina. Before starting an employment relationship with Argentina, businesses need to have 100% compliance with their legal requirements.

Using a PEO in Argentina can help your business develop efficiently by taking on all of the human resource burdens so that you don’t have to.  

How Does a Professional Employer Organization in Argentina Work?

Professional Employer Organizations work in Argentina by hiring Argentine employees, meaning you don't need to have a fully established company in Argentina. The PEO’s main responsibilities are to find the most suitable and qualified employee and then deal with the rules, laws, and regulations both administratively and legislatively.

Technically, the employee is employed by the PEO service but is directed by the overseas company. The PEO handles everything from the recruitment and employment process to the laws and regulations concerning payroll and taxes, ensuring that the employee receives fair and correct compensation. When it comes to the work performed, the employee follows directions from the overseas company.

There are a few specific aspects that the PEO is in charge of. These aspects are of the Argentine Labor Law and have been set forth by the constitution. They are as followed:

Employment Contracts

There are three main contract types that PEOs are responsible for. These include:

  • Indefinite-term contracts: Indefinite-term contracts have no legal requirements for the written agreement. If an employee or an employer needs clarification on the terms and conditions of an employment relationship, then it is advised that they sign a contract.
  • Fixed-term contracts: Written contracts regarding employment are mandatory. Five years is the maximum period of service in fixed-term contracts.
  • Temporary contracts: Temporary contracts, or part-time contracts, require a written contract of employment.

Employment Termination

Employment termination varies depending on the type of contract in place. With indefinite-term contracts, there is an initial three-month probationary period and a 15-day notice required from either the employer or employee before terminating a contract. All employment contracts require the same 15-day notice if an employee decides to terminate the contract. If it is the employer’s wish to terminate the contract, the notice period is increased, determined by the employee’s length of service.

As an example, an employee who has worked for a business for no more than three months has a right to a 15-day notice period. However, if an employee has been employed by a business for more than five years, a two-month notice is to be given by the employer. Regardless of which contract is in place, an employee is guaranteed compensation if no prior notice of termination is given.

Benefits and Rights

In Argentina, employees are entitled to certain benefits and rights. PEOs can help businesses ensure that these benefits and rights are distributed effectively.

Working Hours

A maximum of 48 hours, with a maximum of eight hours a day, can make up a working week. Overtime cannot exceed 30 hours a month. Workers are guaranteed their salary plus an additional 50% for any additional weekday hours that they work and 100% for extra weekend hours. Any additional hours spent working that exceed normal work hours are paid in overtime.

Paid Vacation

Paid vacations range from 14 to 35 consecutive days. 14 consecutive days are guaranteed to employees who have worked six months for a single company. An increase in paid vacation is guaranteed to employees who are employed by the company for longer periods. As an example, employees who are employed by a company for five years are guaranteed 21 consecutive days of paid vacation.

Bonuses

Bonuses are granted to employees in two installments annually. These bonuses are often referred to as the 13th salary and are equal to 50% of their best month’s salary within a six-month period. The first installment is distributed on June 30 and the second on December 18.

Maternity Leave

Maternity leave is guaranteed for female employees. They are allowed 90 days in total: 45 days before childbirth and 45 days after childbirth.

Sick Leave

Employees who have been employed in the same business for five years or more are granted a maximum of three months of sick leave per year. They are entitled to full compensation amounting to their salary. Similar to paid vacation, the amount of sick leave an employee has access to increases during their years of service.

How To Choose the Best PEO Service Company

Argentina is a fast-growing and bustling country with plenty of business opportunities. Its workforce is educated, qualified, and competitive, and getting a firm footing in such a country can seem intimidating. For businesses who want to employ Argentine locals, lack an incorporated local entity, and want to avoid the burdens that come hand in hand with HR tasks, hiring a good PEO service company is crucial.

There is an abundance of PEO organizations to choose from, so it’s important to do your homework before deciding which one to hire.

First, you’ll want to make note of the services and features you want out of your PEO company. If you plan on branching out just to one country, such as Argentina, you can choose a national PEO company. However, if you plan on branching out to several countries, then a global PEO company is a better bet.

You’ll also want to keep the following considerations in mind:

  • Is the PEO accredited? A financially secure PEO will be IRS certified and accredited by the Employer Services Assurance Corporation, or ESAC.  
  • Will the PEO service be able to offer new services as your company grows, thus growing with you?
  • Are you able to cancel your employment with the PEO at any time, or will there be a long-term contract in place?
  • How knowledgeable is the PEO? Do they have a complete understanding of federal, state, and local labor regulations?
  • How user-friendly is the PEO? Does the PEO offer online payroll portals or mobile apps?
  • How much does the PEO charge? Is it based on the number of employees or a percentage of your total payroll?
  • What services does the PEO have, and can they be tailored to fit your specific business’s needs?
  • What is customer service like? Does the PEO offer you personal access to a team of skilled professionals? Is there an after-hours IT support line? Is there live chat, email, and phone support?
  • What is the PEO's online presence like? Do they have good reviews? Are other businesses referring them?

When considering PEOs, consider the factors listed above as well as what each service has to offer. Ensure that the PEO organization has the proper accreditation from the ESAC and the IRS. You may also check to see whether they are accredited by the Better Business Bureau.

With all of those considerations in mind, you should be able to find the best PEO company for your business needs.

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