Bootstrapping your business temporarily in Argentina

Why Buenos Aires?

So why are people moving to Buenos Aires? There are a bunch of expat blogs, where you can see why exactly their writers have moved there. Some of the best are:

• Expat Argentina – he sums up why he’s in Buenos Aires in Top Ten Reasons I love living in Buenos Aires
• Salt Shaker – Dan has got the best restaurant reviews for the city
• Moving to Argentina
• Yanqui Mike
• TangoSpam
• Line of Sight

Many of the above are running businesses in Argentina, with Expat Argentina probably being the one with a business most similar to the readers of this blog. He runs an offshore software development firm with most of his clients in the US.

I will sum up probably the top 3 reasons people would move to Buenos Aires here:

1. Cost of living
2. Big city living
3. Great food and nightlife

This includes a really big emphasis on Cost of Living.

Housing

While housing is not quite as cheap as it used to be, you can still find a great furnished apartment in a great area for short term rental for about US$600pm all bills included.

There are numerous agencies in Buenos Aires that offer short term rental. While cheaper the hassle involved in a normal long term rental is normally not worth it for a foreigner (See Renting an Apartment Can Be Difficult for Expats for more info).

We used the agency Alojagentina and were generally speaking pleased, but there are tons of them and new ones appear all the time so google is your friend.

There are few apartments for under $600 which include broadband internet. Make sure it does include it. If you don’t need this (but who doesn’t in our business) you can find places for around $400 that look comfortable. Forget about attempting to get your own broadband installed in the apartment.

Restaurants and groceries

Argentina has long been famous for it’s steak, but it also has superb Italian food. Their fresh pasta is probably the best I’ve tried anywhere. Just about any restaurant will have a variety of steaks, fresh home made pastas and empanadas (meat turnovers).

While it is a meat lovers paradise, I have talked to many vegetarians who much to my surprise were very happy eating out in Buenos Aires, due to the excellent pastas. For a great intro to steak eating in Argentina be sure to read Argentina on Two Steaks a Day and the Asado Argentina blog. Meat lovers will also check out fellow Rails coder Jake’s Enormous steak which only cost about $9 in a top restaurant (La Cabrera). I’m glad to report he did finish it. (Jakes blog)

Eating out is ridiculously cheap with a good steak dinner costing between US$4-$10 depending on the place. I suspect many expats eat out all the time. The menu above shows 3 course meals with wine and coffee in the US$6-7 price range. (In Argentina “$” means Peso and U$ is US$. There are roughly 3 peso to one US$)

If you stick to Argentine food products the supermarkets are really cheap as well. The 2 T-Bones above cost a little over US$2. Excellent fresh pasta is widely available and everyone offers delivery service. The make just about everything in Argentina, however imported food stuffs from the US and Europe tend to be very expensive, so if you can’t survive without your Skippy’s peanut butter, up your monthly budget a bit.

Big City life

One of the great advantages of Buenos Aires is that it is a huge city. The urban area has about 12 million inhabitants. The architecture is fantastic with lots of both classic and modern architecture and huge city parks that easily rival Central Park.

The night life is pretty good and it should be easy enough to make both local and expat friends here.

Internet

I would say that my experiences were very good. Our apartment had a cable modem from FiberTel which worked without a hitch. If you are in the market for broadband for your own apartment Yanqui Mike has a great overview of broadband in Argentina.

Red tape

If you are in Buenos Aires only temporarily you really don’t need to go through too much red tape. Most foreigners just do the visa run to Uruguay which would set you back about US$40 on Buquebus.

I’ve written about this before as a great immigration hack. Basically on entry to Argentina you are allowed to stay for up to 3 months, so you just leave Argentina every 3 months.

This is 100% legal, but the disadvantage is that without a DNI (The Social Security Card) you will have difficulties opening bank accounts, cell phone contracts etc.

If you do want to become more official which you should do if you are planning on settling down or opening a physical office in Buenos Aires it is relatively easy to get a residence visa. Again Expat Argentina covers the process. The easiest way of doing it is by using the so-called Rentista visa where you have to prove a monthly business or investment income of AR$2500(~US$830). The other easy way of doing it is to get a student visa, which you could get by studying Spanish.

The Porteños

People from Buenos Aires are known as Porteños. They have a reputation in probably all of Latin America as being stuck up and unfriendly. My experience is very different. I find them as being incredibly friendly and helpful in just about every regard. Maybe not entirely as friendly as Panamanians, but just about.

It’s been a real joy talking to the Porteños, even though their accent can be very difficult to understand at times – even for someone like me who speaks fluent Spanish. I think they are very proud of their reputation of having the most European of all cities in Latin America, which is probably what causes their reputation.

The yoyo economy

Argentina’s largest problem is their economy. Most business owners say it is virtually impossible to plan ahead more than 6 months due to changing prices and political turmoil.

Right now the economy is doing a lot better than it did 5 years ago, when the government was bankrupt and they had a seriously bad recession. The current government is running a fairly strict ship on their economic policies and are holding the Peso pretty much fixed at the 3-1 rate towards the US dollar. However many economists are now saying that this can’t be done in the long run as the economy really is getting better.

If you plan on staying for more than a year you must take into account that your costs could potentially double.

The current government the Peronistas also do have a history of running the country down the drain repeatedly driven by a series of idiotic populist policies. So however good they seem to be doing right now, remember that there is almost certainly pressure on within the party to screw it up again at some point.

Temporary or Permanent

I think Buenos Aires is near ideal as I said for a low cost base in the early phases of a founder operated startup. There are even lots of good local designers and programmers you can call on if you need it. It’s time zone is great for working with collaborators from Europe to California, it’s cheap and it’s fun.

With regards to longer term. You need to think very closely about the effects of the economy there. If you fall in love with a Porteña or Porteño or decide that you can’t live without a minimum of 2 pounds of cow daily, then by all means do so.

There are also lots of really good opportunities for businesses in the local market that almost certainly are lots of hard work but worth it. For inspiration have a look at this article about Foreign Entrepreneurs Spice Up Argentina. While in Buenos Aires you really must go visit the California Burrito Company one of the companies mentioned in the article. If you see a good opportunity and have the drive and patience you can do it, just have an escape strategy and plan ahead for either recession or exchange rate fluctuations.

Conclusion

Would I move there? I would definitely do so, but I have some other concerns right now that mean that I couldn’t do it within the next couple of years. I am personally very concerned with the economy.

For more photos from Argentina check my shots on Flickr. For more on the economic situation there you can check the Latin American category on my political blog Econotrix.