Pacific Alliance Becoming the Power Player in Latin American Economic Growth

Scott Lewin
May 11, 2015

This blog was last updated on June 27, 2021

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:

 

Pacific_alliance1) 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.

 

 

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Scott Lewin

Gain timely insight and important up to the minute information about the current legislative changes in Latin America, including Brazil Nota Fiscal, Mexico CFDI, Argentina AFIP and Chile DTE. Learn how these changes affect your operations, your finances and also your Information Technology teams.
Share this post

North America Sales & Use Tax
February 6, 2025
The Tariff and Sales Tax Mishmash – Untying the Mess

This blog was last updated on February 6, 2025 Talk of tariffs dominates the current news cycle with some commentators suggesting that tariffs will spell disaster for our economy while others say the exact opposite. We’ve seen the stock market sometimes fluctuate as tariffs are announced but later suspended, leaving us to wonder whether an […]

retailer dtc wine shipping
North America ShipCompliant
February 6, 2025
Retailer DtC Wine Shipping: The Time Has Come

This blog was last updated on February 6, 2025 By Tom Wark, Executive Director, National Association of Wine Retailers We are often reminded by the media and those in the wine industry—as well as by wine enthusiasts—that the three-tier system of alcohol distribution in most states hinders consumer access to the expansive number of wines […]

Montana 1099-DA
North America Tax Information Reporting
February 5, 2025
State Filing Alert: Montana’s New 1099-DA Requirements for Crypto Brokers

This blog was last updated on February 5, 2025 Reporting digital asset transactions on Form 1099-DA just got a little more complicated. For 2025 transactions, crypto brokers that file Form 1099-DA with the IRS will be required to file the 1099-DA with the State of Montana. This makes Montana the first state to introduce a […]

North America ShipCompliant
January 23, 2025
DtC Wine Shipping in 2024: A Year-in-Review

This blog was last updated on January 28, 2025 The direct-to-consumer (DtC) wine shipping channel faced a storm of challenges in 2024, navigating some of the toughest market conditions in over a decade. As inflation tightened wallets and consumer behaviors shifted, the industry recorded its steepest declines in shipment volume and value since the inception […]

Form 1099-DA Crypto Transactions
North America Tax Information Reporting
January 21, 2025
What is Form 1099-DA and How Does it Impact Crypto Transactions?

This blog was last updated on January 24, 2025 The IRS has released Form 1099-DA and its accompanying instructions for filing for TY 2025. Form 1099-DA is the newest IRS information return, designed for reporting digital asset proceeds from broker transactions and is required to be filed by brokers managing digital assets such as NFTs […]