Tag: mexico

How Latin America is Using Technology to Reform the Tax-Paying Process

Category : Latin America Startups and Investing
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As the calendar turns toward April 15th, everyone in the US knows what’s coming: tax day. While the Internal Revenue Service (IRS) has updated their systems, and there are dozens of tax management tech products, many people still have to file via a paper 1040 form that takes 6-8 weeks to process. Compare that to Chile,  a less “developed” country according the most of the world, where paying taxes is as simple as logging on to the Servicios de Impuestos Internos (SII, Chilean IRS) website to see all your paychecks and spending from the year. On Chilean tax day, people can immediately if they’ll get a refund and how much it will be, which then shows up in your bank account automatically in 1-4 weeks.

Electronic tax filing systems are not unique to Chile. Colombia, Argentina, and Mexico allow people to pay taxes online or even via app, using a personal identification number like a Social Security number.

However, not all of Latin America is so progressive when the time comes to pay taxes. According to the World Bank, Brazil’s tax policy is one of the most complex in the world, so much so that doing taxes requires over 2000 hours per year, compared to 291 in Chile,  311 in Argentina, and Colombia with just 239. Latin American countries also have Value Added Tax (IVA in Spanish) that you have to pay monthly included in their totals.

Across the region, government ministries are rapidly introducing new methods to simplify and speed up the taxpaying process. Here are some of the ways Latin American governments are working to improve the often-painful process of paying your taxes.

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3 Ways China is Fueling Latin American Startups

Category : Latin America Startups and Investing
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In January 2018 Magma Partners teamed up with Chinese coworking business, Kr Space, to launch the first China-Latin American accelerator to connect Chinese and Latin American entrepreneurs and investors.

With the recent news that Tencent invested $180M into Brazilian neobank Nubank at a $4B valuation, we’e seeing Chinese interest and investment in Latin America move beyond the common infrastructure projects backed by the Chinese government. The Chinese private sector is taking note of Latin America’s growing tech ecosystems and is capitalizing on opportunities to help the region follow a similar development path to China’s.

As the US pulls further away from Latin America, China is becoming an increasingly important partner for startups and companies across the region looking for investment and direction. As President Trump’s trade war intensifies, Chinese FDI into the US has dropped by 92% to $1.8B, while Chinese FDI to Latin America has surged to $15.3B in the first half of 2018.

This move by China is a strategic one. Latin America is ripe for investment and China and Chinese companies could be interesting partners for the region.

For one, Latin America is now a mobile-first market with over 200 million smartphone users. It is the second-fastest growing market for mobile in the world, and Latin American consumers are becoming quick adopters of new technologies and global apps.

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Increasing Transparency in Mexico through the Blockchain

Category : Mexico
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Earlier this year, Mexico became one of the first countries in Latin America to regulate financial technology, including blockchain and cryptocurrencies. The Mexican Congress officially recognized cryptocurrencies as digital assets – but not as currency – and set up rules to control exchanges to prevent corruption and money laundering. The law puts the Mexican Central Bank in charge of monitoring companies working with cryptocurrencies.

The Mexican government as a whole is also investigating multiple uses for the blockchain to increase transparency, reduce corruption, and prevent illegal activity throughout the country. Mexico currently ranks 135th out of 180 on the global corruption index, according to Transparency International.

In early April 2018, the Mexican government released news that they are currently developing a project called Blockchain HACKMX that uses the blockchain to track and validate bids for public contracts. This system, proposed by a group of university graduates last year, will increase transparency in the federal hiring process and help organize the post-contract auditing process. (more…)

Overview of Fintech in Latin America: Startups, Funding and Opportunities

Category : Latin America Startups and Investing, Technology
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Only 11% of Latin Americans have access to credit from formal institutions. In fact, in Chile, 37% of adults have no accounts with a formal financial provider, even though Chile has one of the highest levels of financial inclusion in the region.

In comparison, under 40% of adults in Colombia, Mexico, and Peru have formal bank accounts. However, in one of the most chronically underbanked parts of the world, improvements in financial technology have opened the doors for widespread financial inclusion throughout the Latin America.

More and more people are accessing mobile payments, credit systems, and P2P lending opportunities through recent advances in local fintech, and investors are catching wind of the enormous opportunity.

While there have been considerable advances in financial technology in Latin America in the past five years, many tools are still only available in the countries where they were founded. A report by Oliver Wyman, released in September 2016, provides a snapshot of local fintech players in Chile, Brazil, Mexico, and Colombia.

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