LATAM: Foreign Investors Survey 2017
“ In Costa Rica, labor regulations are absolutely competitive and clear in their application by the courts.”
RAFAEL QUIROS, FOUNDING PARTNER, CENTRAL LAW
In the case of Guatemala, Alfredo Rodríguez Mahuad, Partner of Consortium Legal, mentions that“ In general terms, labor regulations are attractive. There is constitutional and legal protection for the worker but it is still tolerable for the investor.” In addition, José Guillermo Bonilla, Partner of Bonilla, Argueta Zarceño & Alvarado, explains that labor standards in Guatemala have been relatively stable for the last twenty years but“ currently there is a tendency to control compliance with the Conventions signed by the State of Guatemala in labor matters, specifically Convention 169 of the International Labor Organization( ILO) on Indigenous and Tribal Peoples.”
In Panama, labor regulations are considered attractive because“ it offers foreigners the option of acquiring permanent residence and work permits in accordance to the investments they make in the country,” says José Agustín Preciado, of Fabrego, Molino, Mulino. The Panamanian regulations also“ allow the hiring of foreign personnel who assists in the development of the various labor areas within the company.”
Paraguay has a lax labor regime, interesting for the investor, with low minimum wages and low demands.
On the other hand, in countries such as Bolivia, Colombia, Brazil and Argentina, current labor standards can be a clear drag on foreign investment.
In Bolivia, where the legislation tends to benefit the worker more than the employer, Carlos Pinto, Partner of Ferrere, explains that“ there are rigid principles that, for example, ensure the worker’ s inalienability and an indefinite employment relationship is presumed. Also, it is prohibited to outsource services when they relate to the purpose of the company.”
In Colombia, labor regulations are neither as serious on an individual level nor burdensome on a collective level as they are in other countries of the Region, but they are a factor that the investor must consider when structuring their business.
For Andoni Hernández Bengoa, Counsel in Foreign Law of Demarest Advogados in Sao Paulo,“ the Brazilian regulatory framework for labor relations is extremely challenging( more for practical application and established customs than for the norms themselves). Having said that, as I have already heard a successful entrepreneur mention, the ability to manage that reality better than the average can be a significant competitive advantage. This capacity often comes from good advice and knowledge in the structuring and management of occupational risk.”
The model of Cuba is particular:“ The recruitment of personnel by foreign investors must be done through Employing Agencies, who cede the labor. This is an unusual regime, but it is well established and has been operating very satisfactorily in the sectors with the highest tradition of foreign investment, such as the hotelier,” explains Juan José Cigarrán Magán, Partner of Cigarrán y Asociados.
Significant progress in tranSparency and anti-corruption
The countries of the Region, aware of the lack of transparency and the high degree of corruption for the investor, have made a great effort both in legal and administrative matters in recent years. Many countries have signed international conventions and treaties such as the Inter-American Convention against Corruption and the United Nations Convention against Corruption. In addition, Chile and Mexico are members of the OECD, as a consequence they adopt their policies.
Although corruption has not completely disappeared, an adequate regulatory framework exists in all survey countries except Peru, where nothing has changed with the new government. In some countries, it is still necessary to work on its strict application.
The country that, according to the respondents, takes the medal is Uruguay, as it has the lowest corruption rate in Latin America according to the rankings of Transparency International and World Audit, where it reaches positions 21( corruption perception index) and 18 worldwide, respectively.
Costa Rica also has a very attractive profile in this regard. There are“ modern laws on transparency and anti-corruption, which are still under constant review. Unlike other countries in Latin America,
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