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Business Risk Analysis Global Business Plan for Global Builders - Manufactured Low Income Housing in Argentina

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Introduction

Business Risk Analysis Global Business Plan for Global Builders Manufactured Low Income Housing in Argentina December 6, 2004 I. Business Risk Analysis: Political/Legal/Regulatory Risks i. Today, Argentina is a solemn nation and political violence in this country is desolate. For over one hundred years, since about 1900, Argentina's magnified economic prosperity and nationalism is identified more along the lines of Europe and the United States of America rather than countries in Latin America. The commitment to international trade with such nations follows a hard to ignore economical and political collapse. Although strong industrial policies and global trade agreements pave the road to recovery for Argentina, investors fear there is some room for concern. ii. Concern over political risks sets back the progress of foreign investment. It decreases the creation of jobs and advancements in modern technology. There are, however several agencies that aid investors address problems with legal and regulatory risks. Organizations such as the Multilateral Investment Guarantee Agency (MIGA) and the Overseas Private Investment Corporation (OPIC) provide investment guarantees insuring investments against any political risk. These agencies were created to provide promotional and advisory services, which help create an attractive investment climate and promote direct investment among foreign countries. ...read more.

Middle

iii. In times before intense globalization property ownership by foreigners was prohibited. This has also changed. "Foreign and domestic investors have free and equal rights to establish and own businesses, or to acquire and dispose of interests in businesses without discrimination. Secured interests in property, including mortgages, are recognized and common in Argentina. Such interests can be easily and effectively registered. They also can be readily bought and sold" (Author not cited, 2002, p.3). iv. Other practices that were the business norm have changed as well. Among these changes are patent-right, trademarks and trade processes that are now better protected. The phrase "better protected" is used because Argentina still needs some progress in this area. "Argentina has no specific law on trade secrets, although penalties for unauthorized revelation of secrets are applied to a limited degree under commercial law" (Author not cited, 2002, p.3). v. Argentina is making huge steps to encourage FDI. Their currency (Argentinean Peso) is relatively stable due mostly to the fact that its central bank is in control of setting its value. "Under the Convertibility Law of 1991, the Central Bank of Argentina maintains the value of the Argentine Peso at one-to-one parity with the U.S. ...read more.

Conclusion

1), The following is a sample of several individual tax rates that currently apply to the perspective countries within the Latin American region: i. Argentina - 6 to35 percent ii. Brazil - 20 percent with a ceiling iii. Chile - 5 to 40 percent iv. Ecuador - on a graduated system iii. The tax rate for corporate industries has a separate tax rate according to the same sources (Author not cited, 2004. pg. 1). i. Argentina - 30 to 35 percent ii. Brazil - 10 to 34 percent iii. Chile - 17 percent iv. Ecuador - 25 percent VIII. The Tax Year i. The Federal Government must set taxation. No organization or individual has the freedom from tax liabilities. Though the Government sets the tax rate in the country, it does not solely have all the rights to complete power over the country's tax system. "The National Constitution divides the power to impose taxes between the Federal Government and the Provinces" (Author not cited, 1999, Pg. 1). ii. The Federal Government has the power to inflict taxes on most taxes paid within Argentina today. It imposes the following taxes: Income Tax Value Added Tax Personal Assets Tax Excise Taxes Custom Duties All income is taxed in Argentina and there is no distinction for business or Individuals. "The Income Tax Law of Argentina has a principle of worldwide taxation" (Author not cited.1999 Pg1). ...read more.

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