Four Latin America Hubs to Launch Your Startup
Four Latin America Hubs to Launch Your Startup
When considering a place to launch a startup, immediately Silicon Valley comes to mind. But with the market saturation and incredibly high cost-of-living, San Francisco is not an option for all companies. While New York, Miami, and Chicago are becoming burgeoning startup hubs, there are a few cities further south that should be put on the short-list of places to launch. Most US-companies forget to consider the benefits of launching in Latin America. The obvious reason is a typically lower cost of living, but many forget about the large amount of talent and innovation, as well as the incentives to do business in many Latin American cities.
The following Latin American cities are becoming big startup hubs for a wide variety of industries. Here are 4 cities that you should consider when finding a place to launch.
1. Bogotá, Colombia
Back in 2014 TechCrunch wrote a piece on why both Bogotá and Medellin, Colombia are becoming promising new Latin American tech hubs. Since that article, Bogotá has flourished into a global hub with startups worldwide flocking to the city to set up shop.
For startups looking for extra hands, the city boasts 100,000+ graduates from higher education institutions and 4.5 million members of the work force, so finding freelancers or team members is not a problem in Bogotá.
For companies that need extra space, Bogotá has 19.3 million square feet of office space and over 50 industrial parks that include free trade zones and warehousing and manufacturing space.
The city is pulling investment in by offering unique incentives. Companies located in “free trade zones” have a preferential income tax of 15%, duty free importation of machinery and raw materials, purchasing of raw materials, capital goods, and services with no VAT. Furthermore, goods and services produced in Bogota for export are exempt from the local industry and commerce tax.
All startups have to be hyper aware of costs, so Bogotá is a great option when launching globally.
2. Buenos Aires, Argentina
The ‘Paris of the South’ has a low cost of living and very strong group of entrepreneurs that help the startup community grow. According to Fast Company’s list of the world’s most South American innovative startups, many are found in Argentina (specifically Buenos Aires).
This city is a great place to start if your company is looking for strong mentorship and an open community. In a country-wide survey, roughly 60% of Argentines between the ages of 18-64 consider entrepreneurship a great career choice — and about 25% of these respondents said they intend to start a business.
Buenos Aires is a fantastic place to be if looking for a development team. The top mobile development and design shops are located in the city, which is why many companies choose to at least outsource their development team in Buenos Aires.
3. Mexico City
Mexico City is first and foremost known for its size: with 21 million people, the city has a diverse population and infrastructure that can help build any company. Mexico City is also geographically close to the United States, making it an easy place to do business from while traveling back and forth.
In 2014 alone, the National Institute of Entrepreneurship (INADEM) distributed roughly $658,000,000 to 620,000 entrepreneurs, startups, and small-to-medium-sized businesses. INADEM also provides networking and support for startups in the area, making Mexico City an extremely attractive place for founders.
For companies that want to mobilize the U.S. Latino population, who reportedly will soon have $1.5 trillion in buying power, this is the place to be.
4. Santiago, Chile
Santiago is mostly known for accelerator program Startup Chile, but there is much more to the city than the government grant. The ease of doing business can truly be seen in Santiago, where it takes an average of 5.5 days to register a business (compared to the 30.1 days average for the rest of South America). The city’s big pull can also be attributed to the strong, stable economy and low amount of bureaucracy.
Santiago should also be a key place for female founders to look, since women make up 20% of the startup workforce. Many Latin American headquarters are located in Santiago, so if your startup needs to get in touch with big businesses, this is a place to be. The city is efficient, so startups find they can work quickly in Santiago instead of going through frustrating red tape.
Each Latin American city has pros and cons, but they are growing startup hubs that could become saturated markets, so your company should move fast to claim the space. Each city offers a variety of VC funds and private investors, as well as accelerator programs that can help your company move forward. NXTP Labs has programs in each city, allowing startups to experience a unique growth model and meet many entrepreneurs and investors during the program.