Brazil may have set the stage for economic growth (and e-invoicing mandates) in Latin America, but its current prospects are quickly being overshadowed by some of its overlooked counterparts. In 2012, Mexico, Peru, Colombia and Chile joined forces as the Pacific Alliance, and soon will add Costa Rica as a full member to their ranks. In part due to their collective strength and in part due to recent issues in the Brazilian economy, this alliance is poised to grow 4% in 2015, compared to Brazil’s -0.5%.
CNBC recently posted an insightful, in-depth analysis of this emerging market. It’s an excellent read for companies currently or considering doing business here, but what does it mean for operations in this region that’s already known for its vast and complex financial compliance landscape? Here are our predictions:
1) Mexico and Chile were the only Pacific Alliance members with established compliance mandates prior to the Alliance, but Colombia, Costa Rica and Peru are now following suit with their own enactments. While Brazil has previously been the model for this type of legislation throughout the region, we can now look to Mexico to vastly influence the shape of its partners’ requirements and expansions.
2) As CNBC’s experts predict investments in this region to rise, so too will the number of corporations operating in the Pacific Alliance. These companies will need to understand that Latin American compliance is vastly different – stricter and affecting more business processes – than that found in other regions of the world. Companies enacting a local, laissez-faire approach to compliance in Mexico, Peru, Colombia, Chile and Costa Rica will face operational shut downs that will affect their performance in this entire region for days.
3) One goal of the alliance is to break down the barriers of trade between the partners. As such, it will be interesting to see if and how these counties work together to ensure government approved e-invoices accompany trade transactions not just within each individual country, but trans-region as well.
Sovos stays on top of these compliance challenges so that you don’t have to dedicate valuable internal resources to the constant change in this complex regulatory environment. Speaking of staying informed, please listen to our webinar, Latest Update – Colombia Mandates for E-invoicing to determine what you need to be doing now to prepare for the next iteration of mandates in Latin America.
