By Globalization PartnersDecember 2020
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There are many reasons to consider expanding your company to Argentina and taking on a new Argentine team of employees. The population is highly literate and educated and has embraced digital technology. Plus, Argentina has a very strong middle class. This means employers can find many skilled workers to join their team and can appeal to a broad base of consumers when they expand into the Argentine market.
If you’re planning on recruiting employees here for the first time, use our guide to hiring employees in Argentina to help you get started. We’ll cover some important aspects of the culture and legal system and provide a step-by-step process you can follow.
What to Know Before Hiring in Argentina
Before you hire employees in Argentina, take some time to learn about the culture as it pertains to business, as well as any laws or customary practices you should be aware of. Here are the top five things you should know.
Spanish is the official language in Argentina and is the most widely spoken language in the country. However, Argentina’s history of encouraging immigration means the population is ethnically and linguistically diverse. The second most spoken language in the country is Italian. You may even hear some Italian words sprinkled into the Argentine variety of Spanish.
A small number of Argentines are proficient in English, so it’s typically best for English-speaking companies to use bilingual employees or to hire a translator to help facilitate communication throughout the hiring process.
2. Complexities in Doing Business
Argentina presents some unique challenges to companies. The country ranks 126th on the ease of doing business index from World Bank, which reflects how complex the process of setting up your company and employing people in Argentina can be. The country is known for complicated taxes, prohibitions, and exemptions.
This is why many international companies choose to partner with an employer of record (EOR), also known as a professional employment organization (PEO). Using an EOR to hire employees saves you from having to establish a business entity or dealing with Argentine tax and employment laws. Entrusting these logistics to an EOR can greatly simplify the process of hiring employees in Argentina.
3. The Workweek and Vacation Time
The workweek in Argentina cannot exceed 48 hours per week, which is typically divided into eight-hour days. Employees are entitled to one continuous break of at least 35 hours every weekend and a break of at least 12 hours between workdays. In more rural areas, the workday may be broken up with a three-hour break in the afternoon for lunch and siesta. Employees can work overtime, but it ordinarily cannot exceed 30 hours a month.
Argentina has 12 public holidays. Employees are also entitled to paid annual leave, the amount of which depends on an employee’s seniority. Those who have been employed for fewer than five years get 14 days of vacation leave, and the entitlement caps off at 35 days of leave for employees who have put in more than 20 years of service. Employees may also receive paid days off if they get married, experience the death of a close family member, or have to take a school exam.
4. Wages and Required Bonuses
Argentina has a minimum wage, stated in terms of Argentine pesos per month. Converting the minimum wages from various Latin American countries to USD, Argentina falls exactly in the middle. The law also specifies requirements for overtime pay. Unless a collective bargaining agreement states otherwise, overtime pay is either 50% more than normal wages or 100% if working during a holiday or rest period. You may want to offer to peg an employee’s salary to the USD exchange rate to avoid the currency fluctuation risk.
Also make sure you factor in annual bonuses, which are required in Argentina. Like many other Latin American countries, Argentines enjoy an Aguinaldo, or 13th-month salary. In Argentina, however, employers must divide this bonus into two payments: one in the middle of the year and one at the end of the year. Each payment will equal half of the highest monthly wage the employee received in the preceding six months.
5. Payroll Taxes
Income tax is progressive in Argentina, so higher earners pay more. Employers must withhold the appropriate amount of income from employees’ paychecks to go to taxes. Employees and employers must also pay into social security.
- Retirement and pension
- Retirement and pension health management
- Unemployment fund
- Family allowances
- Healthcare system
- Health management organization
- Life insurance
Employers are required to contribute to all of these social security schemes. Employees also contribute to the pension fund and medical coverage.
The Cost of Hiring an Employee in Argentina
The salary and benefits you must pay your new employee significantly impacts the cost of hiring new employees. However, there are also costs built into the hiring process itself. Hiring new staff members in Argentina entails several expenses, including:
- Legal assistance: The process of doing business in Argentina is quite complicated. To avoid the risk of receiving illegal advice, you should consider hiring local lawyers who can help you follow the law throughout the hiring and employment process. You may also want to hire a local accountant.
- Forming a legal entity: To be your employees’ employer of record in Argentina, you must establish your company in the country. Setting up a branch or subsidiary in Argentina involves registration fees.
- Staffing agency: Recruitment agencies can help you find employees to hire in Argentina. However, working with a staffing agency adds to your hiring costs. Also note that recruitment agencies may not be the best choice when hiring in Argentina since some job seekers prefer to send their applications directly to the company.
- Hiring committee: If you choose to handle the recruitment process internally, you’ll have to pay your hiring committee for the time they spend on writing job descriptions, evaluating applications, conducting interviews, and other hiring processes.
- Translator: Companies that do not have fluent Spanish speakers on staff will need to hire a translator to help them create documents in Spanish and to facilitate both virtual communication and interviews.
- Travel: Whether you’re establishing your company in Argentina or hiring remote international employees in the country, if you want to conduct interviews in person, you should budget for travel expenses. This includes flights, hotel stays, and meals for any company members who make the trip to Argentina.
- Job advertisements: Advertising job openings can also add to your hiring expenses. This is moreso the case in Argentina compared to many other countries since job seekers still regularly look to newspapers to view job ads.
- Screening checks: Conducting criminal background checks is prohibited as part of the hiring process in Argentina. However, other screening checks can add to your costs, like verifying information on applications or ensuring applicants have a legal right to work in Argentina.
What Does a Company Need to Hire Employees in Argentina?
Before you can start hiring Argentines, you need to meet some legal requirements. Whether you prefer to start hiring right away or want to test out the market before you commit to the costs and complexities associated with establishing your Argentine branch or subsidiary, you can partner with an EOR. The EOR has an established business presence and knowledge of legal compliance. However, if you choose to employ Argentines directly, you will need:
- A business entity structure: You have a few options as you establish your company in Argentina. You could form a corporation, limited liability partnership, foreign branch, or general partnership. Each of these structures comes with its own rules for establishment and regulations.
- Registrations: You must register your company with the necessary authorities. This includes the Office of Corporations and the tax authority, known as the Administración Federal de Ingresos Públicos. You also need to receive a CUIT, or a tax number.
- Documents: You’ll need to prepare and submit a variety of documents. Depending on the type of entity you’re establishing, this can include a notarized qualification report, articles of formation or incorporation, by-laws, a certificate of authorization to do business from your home country, and a signed document by the representative.
- Initial capital: You must deposit the necessary amount of capital at the National Bank to establish your new branch or subsidiary.
- Notice publication: You must publish a notice that you’ve established a new company in the legal Official Gazette.
Depending on the nature of your operations in Argentina, you may have to complete additional steps before you begin the hiring process.
Steps to Hiring in Argentina
Once you’ve established your company, you need to know how to hire in Argentina. While the hiring steps in Argentina may be similar to the steps you’re used to in your home country, some of the practices involved within each step are specific to the country and may differ from your standard practices. Let’s take a look at the steps you’ll need to work through, along with some of our tips for hiring in Argentina.
1. Advertise Job Openings
First, you need to let qualified professionals in Argentina know about your company’s open job opportunities. Create detailed role descriptions and company information to share on online job boards. Unless you’re only interested in hiring English speakers, make sure you translate your ad to Spanish. You should also post some job ads with your address in newspapers so potential candidates can either submit applications electronically or by mail.
Speculative applications are also common in Argentina, so if the word is out about your company’s new location, you may receive some applications in the mail that aren’t directly related to the ads you posted. This will become increasingly common once your company has established a presence in the country.
2. Look Over Applications
Make sure you collect all applications, whether submitted online or by mail, and look over each one. You can use software to help you sort through applications online, but you may also choose to do so manually if it’s feasible. Expect to receive applications in Spanish unless you specified that they must be in English in your job ad. You may need a translator or an Argentine staffing agency to help you read through applications and determine which applicants should receive further consideration.
3. Interview Candidates
Contact the most qualified applicants and schedule interviews with them. In-person interviews tend to work best since they are more in line with the friendly business culture in Argentina. However, you may also need to conduct virtual interviews with employees who aren’t local. Just make sure you schedule interviews for a time that works for both the interviewers and interviewees, taking any time difference into account. Argentina has one time zone: Argentina Time.
Greet and converse with interviewees in a friendly manner, but avoid questions that could be deemed discriminatory, such as those regarding religion or politics. Even if you’re working with a translator, learning a few Spanish phrases to say can be a good way to show goodwill and set interviewees at ease.
4. Make Offers
Once you’ve conducted interviews and chosen your preferred candidates, you can contact them to make a formal job offer. Take this opportunity to answer any questions the candidates may have.
5. Onboard New Hires
Finally, you need to onboard your new employees. Make sure you register them right away in the Special Payroll Book, which the Ministry of Labor oversees. You should also have employees go over their contracts and any expectations or training they need to be prepared for their new jobs. If you work with an EOR, it will handle onboarding and establishing payroll for your new employees.
Hire Employees in Argentina With Globalization Partners
Globalization Partners has an established presence in 187 countries across the world, including Argentina. We can serve as your Employer of Record, allowing you to expand and build your international team quickly and easily. In Argentina, this means you don’t have to worry about the convoluted legal hurdles that can be challenging for international companies. If you’re interested in taking this step, request a proposal.