How to Negotiate Deals in Latin America

By Craig Dempsey

Negotiating a business deal in a foreign country might seem intimidating. Cultural differences, language barriers, and dealing with time zones—if you’re doing business remotely—are only a few of the challenges you may encounter. However, if you look at all the advantages a region like Latin America can bring to you and your business: a growing economy in most countries, ease of doing business, and significant economic benefits, the rewards outweigh any of these challenges.

One thing to bear in mind is that Latin American business culture (and culture in general) is built on strong personal relationships. Negotiations are based on building trust and establishing a rapport with your counterparts.

Here are some tips to help you successfully navigate the negotiation process and close deals in Latin America.

How to successfully negotiate a business deal in Latin America

Build a relationship first

In Latin America, business is often conducted on the basis of personal relationships, so building a relationship with your counterparts is essential to successful negotiations. The key is learning how to navigate that very thin line between personal and professional relationships. This line can be blurrier in Latin America than in most Western cultures, so learning how people interact with each other in your country of interest will give you an advantage.

Take the time to get to know your counterparts by socializing and showing a genuine interest in them as people. Also, take into account that timing is key. The last thing you want is to bring up business too fast and have your counterparts think you’re only interested in making a deal. When you establish a rapport, you build trust.

Understand the local culture

A common mistake Westerners make when doing business with Latin Americans is to assume cultural homogenization. Although a Latin culture exists and countries may share a common history, every country has its own identity, its own culture, and especially its own way of conducting business. For example, a negotiation in Peru is bound to include some haggling, while Chileans are known to be more strict and serious in their negotiations, and you should expect more aggressive and straightforward tactics.

Be prepared to compromise

A big part of Latin American culture is haggling. You often see it in everyday life, from small things like negotiating the price of a jacket to big things like trying to bring down the price of real estate. Negotiations in Latin America often involve a significant amount of give-and-take.

This means you have to be prepared to compromise and make concessions, as this is seen as a sign of goodwill and a willingness to work together. Start out with a higher number than what you’re aiming for, so when it inevitably comes down, you’ll be closer to what you wanted.

However, don’t take your willingness to cooperate too far. You have to be sure to set clear limits and boundaries for what you are willing to compromise on and what is non-negotiable. Keep the phrase “el vivo vive del bobo” (the clever one makes a living off the fool) in mind.

Be patient

Negotiations in Latin America can be a slow process, so it's important to be patient and persistent. This ties to the first point, as you don’t want people to think you are only interested in making deals in their country. People in Latin America tend to value people more than just businesspeople.

Don't rush the process or push for a quick decision, as this can be seen as disrespectful. Instead, take the time to build relationships and establish trust, and be willing to invest the time and effort necessary to reach a mutually beneficial agreement.

Focus on the big picture

The result of a successful negotiation can be about more than just the actual deal. Keep the big picture in mind. Once you have earned the trust and respect of a Latin American partner, there is an opportunity for a long-term partnership that will benefit both parties in the long run. Having someone that you trust in another country can be extremely beneficial for you and your business.

Be aware of legal and regulatory issues

Every Latin American country has its own unique rules in regard to businesses—legal requirements, taxes, and more. The differences can be complex, and can be very different from business practices in European and North American countries. To make sure you have an understanding of local laws and regulations, be sure to work with experienced legal and financial professionals who can help you navigate any complex issues.

After the deal has been signed

Follow-up is an important part of the negotiation process, so it's important to maintain relationships after the deal has been signed. Show the other person that you are truly interested in them, keep in touch, and be sure to honor any commitments you have made. This will help you maintain a long-term business relationship that is based on mutual trust and respect.

FAQs for negotiating deals in Latin America

About the Author

Post by: Craig Dempsey

Craig Dempsey is the cofounder and chief executive officer of Biz Latin Hub Group, an organization dedicated to assisting investors in Latin America and the Caribbean via the likes of company formation and tax advisory, as well as through recruitment and payroll outsourcing. Craig holds a degree in mechanical engineering, a master’s degree in project management, and other certifications covering logistics, personal management, and government administration. Craig is an Australian military veteran and has been deployed overseas on numerous occasions. He is also a former mining executive with experience in Australia, Canada, Colombia, and Peru.

Company: Biz Latin Hub
Website: www.bizlatinhub.com
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