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Doing Business in Latin America

Originally published: July 2014

The business of collecting past due debt is complex and challenging. When attempting to collect on a claim from a foreign country, more challenges generally arise. One of the most frequently asked about regions to collect in is Latin America; and we’ve compiled an overview of business practices for a few specific areas of the region.

First and foremost, it is important to know your customer. Do your homework.  You should use a variety of sources, and verify that all of the information a customer gives you is accurate. Make personal visits to customers whenever possible. At the very least, do a seach on Google Maps to ensure the customer isn't located in a back alley or the office isn't a residential address. Update your customer’s records regularly.  Your customer should understand that while you want a lasting relationship with them, you have business reporting requirements to your bankers, credit insurers, and trade finance partners who are requiring your due diligence efforts and routine follow-up to update your records.

Cultural awareness is also a necessity. When you understand business practices of other countries, you can avoid misunderstandings or mistakes.  You should rely on your in-country partners to teach you the ropes to gaining cultural acceptance. Communication is key. A vast majority of people in other countries speak English, but it can be advantageous if you have someone in your company that can speak the language of the country you are working with. In most of Latin America, Spanish Is the dominant language, while in Brazil it is Portuguese. It is also important to note that payment terms are longer in Latin America than in other countries, typically spanning 90 – 120 days versus the 30 – 60 day terms that are most common to the United States and Europe.

There are some distinct practices that differ throughout the region; below is a breakdown by country:


There are two documents that are key to doing business in Mexico: a signed credit application and a Pagaré. A credit application is mandatory and a Pagaré, which is basically a promissory note, is not, however it is very common as 90% of all commercial credit in Mexico is secured with one. It is beneficial to keep all original documentation, in English and Spanish if possible.

Should you need to enter into litigation in Mexico, ABC-Amega staff find that it is beneficial to find a reliable attorney in Mexico and use their expertise to help you file suit rather than use one based out of the United States.


Brazil is a dynamic country which can pose a considerable challenge to debt collectors, not only because of its size, which is almost as big as the U.S, but also because of its diversity. If you follow some basic rules, you will be more successful in your collection recoveries. Brazilians negotiate with people first, then companies, so it is important to schedule personal visits when possible. Avoid litigating in Brazil. It can take an extremely long time in Brazil and can be very costly. According to the most recent World Bank statistics, the average creditor will spend 16% of the claim in costs alone, and average of two years; although it is not uncommon for litigation to reach five years and beyond. In addition, foreign creditors acting as a plaintiff can be required to post a bond of up to 20% of the claim as collateral. If customer disputes a claim, work to resolve or come to a settlement agreement. If they have financial hardship and can’t pay in full, try to get them on a payment plan. In many cases, this is preferable to litigation.


Receiving payments out of Argentina can be difficult, so it can be advantageous to do billing within the country. It is also very expensive to send wires out of the country because of high-banking fees, so it is recommended to use credit cards to avoid those fees.

A helpful tool to use in Argentina that can assist with potential lawsuits is a letter that puts customers on notice of their debt called Carta Documento. Should the claim escalate, mediation is a good alternative to a lawsuit to avoid a lengthy process and high costs.


Working with Colombian businesses is similar to working with the other countries in Latin America. Maintaining regular contact and keeping original documents is important. Also, when a dispute arises, working towards an amicable resolution can save a lot of time and money. The judicial system in Colombia is not very strong, and time to obtain a judgment can be very lengthy. According to World Bank Statistics, it can cost up to 46% of the claim value on legal fees.


Venezuela is one of the most difficult countries to collect in, as they have very strict rules regarding foreign currency. It is often difficult for companies to obtain funds, even when they are willing to pay.  If a lawsuit is filed against a debtor, all documents must be translated by a certified translator in Venezuela, which is very costly. In addition, the Venezuelan courts are extremely slow. Even if you win the suit, the debtor would have to pay the official equivalent exchange rate of the debt in Bolivars, which is one-third the market rate.

While many of the best practices of domestic collections apply globally, there can be unique challenges to collecting in parts of Latin America.  ABC-Amega has an experienced team of international collections representatives who are skilled at navigating what can be a tricky process. Should you find you’ve exhausted your in-house efforts and are not making collections progress in this region, we would be happy to assist you as needed. For more information about ABC-Amega’s international commercial collections services, please reach out to us at [email protected]