Argentina’s government is wooing entrepreneurs with a new law | Hacker News Reader

Argentina’s government is wooing entrepreneurs with a new law

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50 pointsjanober66 comments

This sounds great. I think, however, that the big challenge for Argentina is convincing investors that this has any chance of being stable for many years to come. In a country where every new government promises and attempts a radical re-foundation of the State, with no long-term policies and goals agreed to and respected by the whole political spectrum, this may be hard to do.

I've been in Buenos Aires for 3 months in the beginning of the year and I can assure you that if this government stays all startups will shutdown due to impossibility to pay electric and other bills.

The good old days of the previous government, where you could have a warehouse of GPUs mining bitcoins with subsidized electrical bills, are sadly over. Now people have to pay for what they use, like in any reasonable part of the world. Or is there any other country that provides electricity for ridiculous prices where all these startups you say will close will move to?

Well if you are really asking it, Paraguay has really cheap electricity. They sell back most of what they produce because they don't use it.

But no, not needed. If the bill really had to go up, do it progressively, not in one shot so you don't get everybody unprepared. If you think it by another angle, a 700% increase is a hell of a tax for technology companies or garage projects.

I'm from Buenos Aires and I can assure you that this is outright false. Buenos Aires is the largest population center of Argentina and has had heavily subsidized (e.g. electricity bills of 2 USD are not uncommon) utilities for almost a decade . In the rest of the country these subsidies rarely exist, so everyone else pays a realistic price.

Did you check your bills lately?

It's actually a reasonable price like in the rest of the world but it was effectively raised with 400% or something

I live outside the city, we had subsidies taken away long before Macri became president. I've actually seen my electricity bill go down because I saved compared to the same period in previous years.

My electric bill has gone up about 500% in the last 3-4 years. It's still very damn cheap, especially compared to what people pay in many more advanced countries.

Buenos Aires has cheap electricity. My electric bill is around >2K pesos in summer (I'm from the north of Argentina). I agree with taking out subsidies where the electricity is cheap, but they removed them for everybody from one day to another. There are too many cases of small business with unafordable gas & electric bills.

Yeah, bills went from 2 USD to 30 USD. And the dollar from 8 pesos to 16. If cheap electricity doesn't help technology companies, I don't know what helps. Sure isn't "entrepreneur's laws", because most of projects fail way before really need it, like when the founders (or wannabe) can't pay their bills (and quit their jobs, if they are lucky to have one).

It was only 8 pesos for very small amounts authorized by the government, the street price was already 14/15.

I'm also from Argentina and I support this.

What? The highest electricity bill I ever paid is 400 pesos (~26 USD) a month. If your startup can't pay that, much less it can pay salaries.

Pardon me sir, but you are talking out of your ass.

The stability of a country like Sweden it will never have. Change is not just a politician's slogan, things really are different every year.

Good, bad or just plainly weird.

I wouldn't lose hope ("never" may be too strong a word). Sweden itself, 160 years ago, was a poor country. It takes time (not only time, of course).

How come no-one is talking about safety w.r.t. moving to and living in Argentina?

> In the first three months of 2017, there were 77 kidnappings for ransom.

Source: [May 2017] - The Numbers And Locations Of Kidnappings For Ransom In Argentina => http://www.thebubble.com/the-numbers-and-locations-of-kidnap...

> From March 20 to March 31, authorities registered at least 16 express kidnappings in the Buenos Aires metropolitan area. According to Clarin, the victims of these kidnappings are of all ages and social classes.

Source: [Apr 2017] - Express Kidnappings on the Rise Again in Buenos Aires => http://www.insightcrime.org/news-briefs/express-kidnappings-...

Can someone who lives there throw some light on the prevalence of ransom kidnappings? I read about this a while back, and want to know if it's really a cause for concern for Americans and other foreigners moving to Argentina for work, or is it mostly localized (i.e. political kidnappings / gang related kidnappings) in which case you can be somewhat "reassured" that it may not happen to you.

I live in Argentina (was born here). I've also lived in USA and other countries. It's hard to describe the situation. I'd be tempted to say that Argentina is rather safe. I've lived here for almost 30 years and I never got robbed. But I got robbed in San Francisco while on vacation for example. It really depends on what you do.

If you're walking alone at 10PM in a not-so-nice neighborhood, then Argentina is not going to be safe. If you come from a REALLY safe country where you don't have the "cautious" skills developed, then it's not going to be safe.

I know many startup founders in Argentina and Buenos Aires. If you go with the safe options: Buenos Aires city in a nice neighborhood (Palermo, Puerto Madero), then you'll be more than fine.

Lomas de Zamora and Moron are poor and crime ridden sections outside the city of buenos aires. Its like talking about Detroit or Flynt in the US(or maybe the worst parts of oakland).

Buenos aires, specially the startup area (palermo, belgrano, recoleta) do not have such a security problem. Contrary to SF where I've witnessed people shooting up drugs in the middle of market street, harassment by crazy homeless people, car vandalization, fights and police chases.

There really isnt a way to statistically answer whats going on with kidnappings, because the official numbers arent in. It is definitely not a day to day occurrence, or something people are worried about.

As a European I lived in Argentina for a year. At one point I took an official looking city cab at the airport and quickly realised that the driver had other intentions than getting me to my apartment. He dropped me off in another part of town after emptying all my pockets, keeping my luggage as ransom. It does not need to be a complex kidnapping for you to feel unsafe.

I'm really surprised by this, there is an official cab office right outside ezeiza, which gives it some legitimacy. How did you pick a cab? (i want to know which ones are actually unsafe)

Use Uber, call a radio taxi, use an app that is used by a local radio taxi or when you are actually at Ezeiza just go to one of the many stands that are right after the scanners before you go out into the main hall.

I am really careful at the points where you will find a lot of tourists like Ezeiza and the central bus station. We've got screwed by a "tapper" once, paid much more for the ride than was actually supposed because he rigged the meter. This happened just outside the bus station where they're waiting for victims from out of town that don't know the tariffs, distances etcetera.

Hailing on the street never went wrong.

I'm argentinian, I've never had issues coming from the airport, thats why i'm asking. Uber works from the airport? thats pretty sweet..

I actually never used Uber! I assumed they were working in the greater Buenos Aires area not just the center. I'd personally take a remise over Uber any day.

It looked like a city cab, yellow and black and was front in the line of all city cabs waiting in Ezeiza. Looking back at it it was a Peugeot that was too old to be running every day. It had the back seat door handles and window levers removed, something you only see when you are already in the car. In the end i was happy that he let me go. It cost me 200 USD ... it could have been worse.

I'd be skeptical. Hopefully the new government will make things different, but with precedents such as [1] and [2], I'd give them a good couple of decades to prove they're going to remain stable.

If you're looking for stability + healthy startup environment + South America, look into Chile.

Source: Am from Uruguay

[1] https://www.bloomberg.com/view/articles/2015-03-13/now-argen...

[2] https://en.wikipedia.org/wiki/Corralito

On Monday they issued 100-year bonds that yield nearly 8% of interest. Huge public debt, desindustrialization of the economy and capitals flowing out of the country are some of the causes that led to the Corralito. This is history repeating itself.

Bus this new law is certainly good news.

They sold a bound at 0.05% of face value? That's an incredibly new kind of low. Why would they ever push for that long term?

It's a rock and a hard place. They have a deficit, they cannot wring out any more money via taxes, and cutting social spending would likely result in both outrage from the electorate and economic pains due to the policies of the previous administration. So to keep the machine running they're borrowing money, with the hope that pro-business policies will attract the investment needed to be able to make everything ultimately sustainable.

At least, this is how it was explained to me.

It's funny that here at Brazil, every time the government uses this policy we get 1.5-2 years of intense growth, and then a big recession.

The recession always lasts until ~1 year after the government start cutting social spending and stop the pro-growth policies. Then we get moderate growth again, as long as the non-pro-growth is maintained.

Besides, business don't tend to like most policies called "pro-business".

Still what I don't get is why they are selling 100 years bounds at all. The interest rate is quite understandable.

On another node, Larry Summers told an interesting anecdote regarding Argentina recently:

> In 1900, Argentina was closer to the United States economically than most of Europe is today. Today, we think of Argentina as a poor developing country. Argentine growth only has lagged American growth by 7/10 of a 1 percent over all of that period. So when you get things wrong, when you have dysfunctional governance, it doesn't undo you in a year or five years or even a decade. It does over time.

Argentina's "deal-based" system where initiative comes from the charismatic leader have been outperformed by the ruled-based system prominent in US or Germany.

Argentina's economic history is ridden with political catastrophes.

Even the period of liberalism in the 1880-1920's had plenty of issues: indentured servants, borderline slavery. Workers protests were met with violence and murder by officials.

Argentina has had a military coup every couple of decades in the previous century, which included entire presidencies with unelected officials, culminating in a coup that killed between 9000 and 30000 thousand people.

The lack of political stability can explain the problems in all other areas, like ineffective justice or economic stability.

Not to mention that using a 100 year span, and including germany as an example to follow..

The problem with doing business in Argentina is you could have written the title "Argentina's government is wooing entrepreneurs with a new law... this week". Next week? Who knows.

One of the reasons tech is doing really well here in the last ten years despite the governments is that you don't need a lot of imports to work on IT except for the computers, the customers abroad are easily reached through internet and also you don't pay export taxes like you would if you would export meat or soy. People are really well educated as education up to a bachelor's degree is completely free.

What used to be difficult is getting money into the country, something that sounds as crazy as it really is and all of the different white grey and black exchange rates. I had to send money to a US account owned by somebody that would promise to pay me in pesos here because there just was no other way to do it. That really made me nervous.

Also I couldn't pay my bills abroad because I couldn't send any money if nothing was left on my foreign accounts.

You say "used to be". How long ago was that?

Less than two years ago. There were currency controls that pushed most operations outside the country or through the illegal ring.

Has anyone here lived/worked in Buenos Aires? I've been considering it as a place to check out for an extended period of time in 2018.

I've been there in the beginning of the year, planning to stay longterm. Inviable. The cost of living in Buenos Aires skyrocketed these past 2 years (I have a sister still living there since 2010, moving back next month).

I just left, after having lived there most of my life. I'm not impartial, but my opinion is that it's a fantastic place to live if your income doesn't depend on the country's current position in the wealth/poverty pendulum it's been swinging on since the 30's. AMA.

I've been considering hanging out in the Southern Cone while doing business remotely in the US as my main source of income. Is Buenos Aires/Cordoba/Mar del Plata worth considering or should I be really looking more into Uruguay or Chile?

It depends. What are you looking for when deciding for a place to live? What's important to you?

Decent internet that would allow me to stream every so often, reasonable variety of food/things to do, milder weather, LGBT friendliness, and cheapness (in relation to living in, say a large city in the American West coast). Also safety to some extent.

I could hop to/explore the EU, where I would feel completely comfortable and I could absolutely do with some minor bureaucratic hassle but I would be concerned about being able to working with a US job if I have that marked a difference in time zone (I don't know if that's actually a reasonable concern).

I think you can find everything you have just mentioned in Buenos Aires, for sure. if you will be earning in USD you will be more than comfortable.

>variety of food/things to do, milder weather, LGBT friendliness

Wrt LGBT, I worked with people from Chile who moved to Argentina because the Chilean culture is very conservative/religious. In that case, Buenos Aires is known to be very LGBT friendly. I think Uruguay is also a good option (liberal/atheist culture), but simply because of the size, you'll have much more options to socialize in BA.

Wrt food, BA has lots of options from all over the world, simply because it's a very cosmopolitan city. Maybe not to the point of NYC (it's hard if you put the bar there) but certainly the city is also known because of the quality of the food, expect to gain some weight.

But of course, everything in life has trade offs, and this is where BA loses some points.. It's not cheap to buy technology there. That's why people who can travel, buy their gadgets and branded clothing in other countries.

Speaking of security, I was born and lived there most of my life, and the only time I was mugged, I was walking at 3am in 2003 (close to the biggest economic crisis in its history) in an insecure neighborhood outside of Buenos Aires (I had a fight with my girlfriend and left her house, and I thought: I'll walk home... This night could not be any worse, anyway... hehehe, I was proven wrong)

So unless you do something stupid, as I did, it should be relatively safe. But even then, you should take some cautions: do not use expensive jewelry or watches, be cautious when walking at night in places you don't know, do not leave unattended items (eg, your laptop at a bar while going to the wc).. Etc, some simple things that I've seen people who go there from other places sometimes omit to their regret.

Uruguay or Chile unless you want an experience of living in a semi-failed state. Also thousands of Argentinians go to Chile on weekends for shopping because goods in their country are overpriced or absent.

Lots of Chileans go to study in Argentina five days per week since in the United States (come on, even the flag looks like Texas!) studying is just too expensive.

But cheap iPhones, for sure.

Uruguay is like a parallel dimension, where somehow Argentinean people didn't screw up their state. Still expensive though.

> Uruguay is like a parallel dimension, where somehow Argentinean people didn't screw up their state.

Lol....best Uruguay definition I've ever read

It's the Texan flag that looks like the Chilean one. Chile got its flag in 1817 and Texas – in 1839, 22 years later.

Not only iPhones, even groceries are cheaper and more diverse than in Argentina.

Yes, education costs are a problem but not for immigrants who work remotely (or don't have kids at all).

I can't swear on the quality of the internet since it's been 5 years and I must go back! Certainly Buenos Aires and Santiago have all the creature comforts and culture of a megacity but you'd be missing out by neglecting the rest of the region.

Are you looking to drift around or settle down for 12 months? It depends what you're looking for. I spent 4 months travelling in ARG/CHL/URU. I didn't visit that far south in Argentina; said to be gorgeous but bloody freezing in winter!

First-world comforts? Santiago. Surfing? Pichelemu. Wine? Mendoza. Beer? Valdivia. Coffee and kuchen (German cake)? Puerto Varas. Serenity? Chiloe. Pacific coast? Valparaiso. Mountains? Salta. Homestyle cooking? Jujuy. Metropolis? Buenos Aires. Art scene? Cordoba. Students? Rosario. Small city feel in a capital city? Montevideo. History? Colonia. Casino? Punta del Este. Relax on the beach? La Pedrera.

If I was wanting a suffocating metropolis, Buenos Aires. For a mixture of culture and seaside I'd pick Valparaiso. For a mellow place to chill out and learn Spanish but close enough to a coastal weekend break, I'd pick Montevideo. Otherwise Santiago, Rosario, Cordoba, Mendoza would all be good choices for a longer stay. But it depends on your personality. I met a British man who'd spent 12 months in Salta La Linda - it's a beautiful place but small enough to do most touristy things in a weekend but what grows on you is the indigenous culture, living at altitude while being at the foot of the Andes and various extraordinary adventures by minibus.

Buenos Aires great cultural life, a huge spectrum of very lively and very quiet/slow neighborhoods, good public transportation(except on peak hours), good internet, very good food and nice people. For a Latin American metropolis, it's quite safe, but there are areas you should avoid at night; it is not Europe. Again by Latin American standards, Buenos Aires is quite LGBT friendly, but it is not San Francisco. In recent years I can think of a couple of high profile events where people were kicked out of restaurants for homosexual behavior, but this has always been met with strong responses from the community.

I have not been to Chile, but I can tell you that Montevideo feels like a more relaxed version of Buenos Aires.

I've lived in Buenos Aires all my life. This is my biased pros/cons list: - It's a beautiful city with a lot of art and beautiful places. - Food is great - Most of the people is nice and open minded (same sex marriage is accepted here) - We have a lot of good IT professionals and great entrepreneurial ecosystem (including cryptocurrencies) - Argentina is a beautiful country to do some tourism - Our timezone is great, we are close to NYC time for example

Cons: - Prices. I've been travelling a lot this past years and I found Buenos Aires might be as expensive as other big cities. - Inflation, it's really hard to deal everyday with it. I've lost sense of prices to be honest - Some places are really insecure. Also, you might have problems on safe areas too. I live in a good neighborhood and someone broke into my apartment when I was out.

I moved away from Argentina 5 years ago (wow, time flies) and I agree with all the points above.

Many people in the First World assume that Buenos Aires is a cheap place because it is in South America, but many places in South America have actually higher costs of living than Europe/North America, with lower incomes. An apartment in a nice neighborhood with a reasonable size is ~USD1000[1], while local income for a Sr Software Engineer is around ~USD27K[2] (sounds low even for BsAs standards, but not outrageously so) and taxes are outrageously high (over 50%[3] for an individual, 137.4%(!) of the profits for companies[4]).

[1]: http://inmuebles.mercadolibre.com.ar/departamentos/alquiler/...

[2]: http://www.lanacion.com.ar/2003950-cuanto-ganaba-un-programa...

[3]: https://es.panampost.com/antonella-marty/2017/06/21/en-argen...

[4]: http://www.infobae.com/economia/2017/03/07/argentina-continu...

> 137.4%(!) of the profits for companies

How on Earth does that work? Companies have to pay all of their profit + more in taxes? Or is it some misleading figure which compares expenses like employment taxes to the profits?

It's a great question. It seems like at least since 2005[1] the amount taxes owed after deductions have been >100% of profits, which might partly explain the prevalence of off-the-books earnings in the country. It seems to be the second highest tax rate of commercial profits in the world, at 106% for 2016[2].

From the breakdown of that rate[3] it seems the three highest contributors to that rate are

- Turnover tax by City of Buenos Aires of 3% (Total tax rate (% of profit) 53.21%)

- Employer paid - Social security contributions of 23% (Total tax rate (% of profit) 25.94%)

- Tax on financial (check) transactions of 0.6% (Total tax rate (% of profit) 17.25%)

Keep in mind that the last one affects every transaction, so you can _easily_ pay more tax than what you earn just by moving money back and forth.

[1]: https://tradingeconomics.com/argentina/total-tax-rate-percen...

[2]: http://data.worldbank.org/indicator/IC.TAX.TOTL.CP.ZS?year_h...

[3]: http://www.doingbusiness.org/data/exploreeconomies/argentina...

For every 10 pesos they make, they pay 14 pesos to the state (thats how to read that %).

Also of note regarding Buenos Aires: the city is quite dirty. Even it air is pretty bad. Most of the non-residential areas are very very noisy.

Regarding the pros, I think they's been properly enumerated.

I looked into moving to Argentina recently but found some complaints on forums about the speed and reliability of the Internet. What are your experiences with the Internet in Argentina?

Well. Sadly I don't have any benchmark (or some serious analysis) to share with you but I can tell you this:

- I pay about 40usd for a non symmetric 12Mbps connection. It works ok - at least for me - I can stream music or watch something on Netflix without any problems.

- My ISP has a max of 50Mbps (non symmetric)

- You can find some corporate symmetric connections (I'm not aware if you can have those at home) but I suspect they are like a regular connection in some other more advanced countries

In some zones you have symmetric fiberoptic lines. To your house too if you want to pay that premium (I do).

Besides Iplan, is there another alternative? Can you share how much does it cost to you?

iPlan perhaps doesn't even use it's own fiber, apparently there are more companies offering it. But it's legal to call your company FiberTel in Argentina and then sell cable not fiber, so the situation is pretty opaque to me.

The full price is 1200 pesos, around 75 bucks. So not cheap. But to have something that works reliably up and down it's peanuts, the cheaper options are not as reliable and have asymmetric speeds. Stable videoconferencing is a must.

One (perhaps non-representative) data point: I have teammates who live in Villa La Angostura and Cordoba and I chat with them using Google hangouts every day. Their bandwidth has never been an issue for video chat.

I have an iPlan fiberoptic line 10/10 and it's a really stable 10/10. I don't need big downloads all of the time just a reliable connection for (video)conference. Other parts have 100/100 or 50/50.

Make sure you earn in dollars or euros. I've got hit by the inflation blow last year as well but lately the euro and dollar are going up again which makes everything a bit more affordable again. There's definitely a gray area now where I exit the bank with my money in euros (this is legal now) to change it in another place where they pay 20% more in pesos.

I don't live in BA but in one of the other large cities. BA was always a bit crazy in terms of travel distances and price of living. People earn about 20% more there just to compensate. Compare it to London.

I really like the city but there's a lot of grey boring areas and/or bad neighborhoods.

I lived and worked there for a while and would describe it as follows. The people / lifestyle / weather is amazing, by far the best I've experienced anywhere I've been (US and most of Europe). On the other hand, the level of corruption and price inflation and instability / beaurocracy of the system as a whole is very bad compared to EU countries / US.

I'd say if you had a remote job earning dollars or euros and weren't tied to the system itself down there, then it would pretty much be a paradise. But if you have to live tied to the system then I would advise against it unless you are young and single and just want to experience cool new things and don't care about health care, owning property, starting a company, etc.

All in all though a fantastic place and I would definitely recommend it to anyone for at least a couple months or a year or so.

Latin America needs more integration. None of its markets is very big (except Brazil or Mexico), but together they are huge. It needs to be easier for small businesses to interact and swap money and goods. There are some sectors (automotive comes to mind) where governments set up deals, but for most businesses it's really hard. Not even the mail works well enough.

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