Argentina has a skilled and thriving local workforce, making it an ideal location for US tech companies interested in expanding their operations into South America. This country is also one of the largest economies in the region, has a similar time zone to the United States, and is home to many English—and Spanish-speaking professionals. As a result, it’s not uncommon to find many US tech companies hiring remote workers from the region.
Remote work has become widely adopted by many organizations globally because of its benefits. Unlike traditional employer-employee roles that focus on experts from one region, this new type of working relationship allows companies to hire talent from different parts of the world. Hence, these organizations can build diverse teams while saving money, too.
If you’re a foreign brand looking to hire remote employees, it’s crucial to understand local labor laws, tax legislation, and any compliance requirements. While hiring remote Argentine workers can be a hassle for US companies, the process will be much simpler with the right support and expert insight.
The Feasibility of Remote Hiring in Argentina
If you’re wondering how to hire and pay remote employees in Argentina, the first thing to do is study what Argentine labor law says about this type of working relationship. While remote work is a relatively new concept in Argentina, you’ll be thrilled to know it’s widely accepted in this region. According to Bloomberg, Argentina is the third most attractive country in the world for hiring remote talent. This country ranks top in Latin America, ahead of Columbia and Brazil. Notably, the exponential increase of remote work in Argentina is largely due to the exchange rate gap (between Argentine Pesos and Dollars) enjoyed during remuneration.
Argentine labor laws aim to protect remote employees while offering enough room for foreign companies to leverage the skills and diversity of these workers. These laws were introduced in 2020 in response to the global shift towards this new work system. According to local labor laws, foreign employers who want to hire remote employees in Argentina must:
- Create a safe working environment for their employees. Yes, most remote workers will share a virtual relationship with their employers. However, these employers must provide all the necessary tools and equipment to ease daily operations.
- Comply with all regulations regarding maternity leave, minimum wages, maximum hours, and rest periods. Employers who fail to comply with laid-down regulations are subject to penalties.
- Regulate work conditions to maintain a healthy lifestyle for all their employees.
- Pay worker salaries for up to a month. Any employer who fails to pay salaries when due could face heavy fines or face a criminal case.
- Pay compensation to any employees harmed in the line of duty or those sacked without cause. Failure to remit these compensations may also result in fines and penalties.
- Pay compensation to family members of any employee who died in the line of duty.
- Ensure that all remote employees work no more than 48 hours per week. A good way to do this is to use virtual tracking software to monitor employee activity.
- Pay overtime for additional hours aside from the standard 40 hours per week.
- Pay the 13th-month salary. Employees can make this remuneration in two installments (June and December)
Setting the Stage for Remote Employment in Argentina
Any US-based tech companies interested in hiring remote workers from Argentina can do so in three ways:
- By establishing a legal entity
- By partnering with an Employer of Record (EOR)
- Hiring a recruitment agency
Establishing a Legal Entity
If you plan to establish a long-term presence and hire large remote teams in Argentina, establishing a legal entity in the region is the best way to handle this type of recruitment. Creating a legal entity in Argentina means making a company in the region. While this company may be a branch or subsidiary for your operations, they offer you direct access to the local labor market. They allow you to pay remote workers in the local currency – Argentine pesos. You’ll also enjoy exclusive access to the benefits of local companies, such as regular incentives, duty-free areas, etc.
It’s crucial to note that creating a legal entity is challenging. The first noteworthy challenge about this process is that it’s complex and could take a few months to complete. Many Argentina startups in remote work do not have the resources to establish their own legal entity. Another major downside of this remote hiring process is that you’ll have to cope with cultural and language barriers, and it may be an extra cost to hire a translator. You’ll also need to understand Argentine labor laws well while dealing with the stress of creating a new bank account.
Partner With an Employer of Record
Another alternative to hiring remote workers is to partner with an Employer of Record. Working with an Employer of Record is cheaper and less stressful than establishing a legal entity. EORs also help you avoid legal non-compliance and employee misclassification because they have in-depth knowledge of Argentina’s tax regulations and labor laws. A trustworthy EOR can help you handle payroll, taxes, and benefits distribution, making them a great fit for startups with limited resources. They also ensure that companies don’t have to establish a legal entity as remote workers are hired through the EOR’s entity.
Hire a Recruitment Agency
Another alternative for US companies who wish to leverage local talent is to hire a recruitment agency. Unlike an Employer of Record who assumes legal responsibility for your workers, recruitment agencies focus on identifying high-quality candidates for your open position. Based on preset requirements, this agency will search through its pool of candidates to identify potential candidates to work with you. Globy will leverage its network of partners to connect you with the best EOR partner to suit your needs.
Globy is a reliable platform that focuses on connecting US companies with the best talent in Latin America and Eastern Europe. All you have to do is input your preferred recruitment goals and approach, and the platform will help you navigate the entire process. Our experts can connect you with the best remote talent in the region.
What are the Best Ways to Attract Remote Talent in Argentina?
Hiring remote talent in Argentina is challenging because you have to match the expectations of prospective employees. Here’s a list of everything you need to do to make your job role attractive to local talent:
- Create a flexible work schedule: You’d do well to note that Argentinians prefer to maintain a healthy work-life balance that allows them to spend time with friends and family. To make your remote job attractive to top talent, incorporate a flexible schedule that allows employees to take breaks while still completing their core activities.
- Offer employment benefits: Another way to make your remote job attractive to the top talent in Argentina is to constantly offer employment benefits such as food vouchers, transport allowances, gym memberships, etc.
- Recognize Cultural Celebrations and National Holidays: Before hiring from this region, you should note that Argentinians take their holidays seriously. To maintain a healthy working relationship with Argentine employees, it’s crucial to acknowledge public holidays such as National Flag Day and Tango Day.
- Promote a Collaborative Virtual Culture: Warmth and interpersonal relations are a major part of Argentine workplaces. So, it’s important to follow suit. While remote workers have a virtual relationship with their employers and other team members, you can foster a sense of belonging by organizing physical and virtual hangouts.
Let Globy streamline your remote hiring process in Argentina, ensuring compliance and efficiency.
Payroll and Compensation for Remote Employees
If you’re a US-based tech company with remote workers in Argentina, there are different ways to pay your employees. The first method is to set up a local entity in the region. But before doing so, ensure that the permanent establishment risk is considered. If you proceed with this method, you’ll be subject to the region’s corporate taxes and other compliance standards. Establishing an entity makes sense if you’ll be regularly hiring employees from Argentina. But if it’s a one-time occurrence, you may try other alternatives.
Another method of paying remote employees in Argentina is to work with an Employer or Record (EOR). An EOR will serve as an intermediary between you and your employees and save you the stress of coping with the permanent establishment. If you decide to work with this third-party service, they’ll be in charge of the legal aspects of hiring your remote workforce. EORs also ensure that you pay your remote teams on time and in their local currency.
Read more: Employer of Record in Argentina
What Payroll Deductions are Required for Argentine Remote Workers?
While there are no limitations to how much you can deduct from your employee salaries, it’s best to prepare beforehand about the benefits you wish to offer employees. However, if you’re unsure of how to navigate this aspect of your business, consult the legal department of your business association. Some of the deductions you may be required to make include:
- Insurance—To protect the health and interests of their employees, an employer may need to deduct certain percentages of payroll to cover worker’s compensation, unemployment insurance, accident compensation, professional injury insurance, and occupational disease insurance.
- Pension—Employers may also need to deduct employee payroll for their retirement plans, pension schemes, and social security payments.
- Taxes—Payroll deductions may be required to cater for provincial tax, personal income tax, and municipal tax.
- Employee payroll may also be subject to further deductions based on any previously stated agreement in the employment contract.
Read more: Payroll Taxes and Expenses in Argentina
What are the Tax Obligations of Remote Workers?
This country adopts a progressive tax rate of 5% – 35%, depending on income level. The higher the income, the higher the tax rate. Whether hiring remote workers through your legal entity, an Employer of Record, or a recruitment agency, you must ensure tax compliance on all employee payments. According to labor law, all Argentinian employees must pay taxes on any income (local or foreign) received for their services.
The following table highlights the progressive tax rate in Argentina, along with the corresponding income level:
| Income (ARS) | Tax Rate |
| 0 – 173,834.61 | 5% |
| 173,834.61 – 347,669.23 | 9% |
| 347,669.23 – 521,503.84 | 12% |
| 521,503.84 – 695,338.47 | 15% |
| 695,338.47 – 1,043,007.68 | 19% |
| 1,043,007.68 – 1,390,676.90 | 23% |
| 1,390,676.90 – 2,086,015.35 | 27% |
| 2,086,015.35 – 2,781,353.85 | 31% |
| 2,781,353.85 and more | 35% |
Understanding the Contractor vs. Employee Dynamic
When hiring remote workers in Argentina, most US-based companies have two options. They can either choose to hire local talent as employees or independent contractors. However, it’s crucial to distinguish between both because they affect your business differently. The following table highlights the differences between employees and independent contractors:
| Employee | Independent Contractor | |
| Meaning | An employee is any individual who provides services for an employee in exchange for regular remuneration. The nature of the relationship between employer and employee is specified by Argentina’s Labor Law. | An independent contractor is an individual who works for a client in exchange for payment. However, the contractual terms between both parties do not mention an employment relationship. |
| Level of Autonomy | An employer exerts a high level of influence over the activities of an employee. The employer will determine the working hours and other conditions regarding the work relationship and is free to discipline an employee for misconduct. | The worker exerts a high level of influence in this type of relationship. Contractors cannot be disciplined for misconduct. |
| Access to Statutory Benefits | Employees are entitled to statutory benefits from the employer. | Independent contractors are not entitled to statutory benefits from the client or employer. |
| Access to Collective Bargaining Agreements | Employees are entitled to Collective Bargaining Agreements (CBAs). | Independent contractors are not entitled to CBAs and must negotiate their personal work agreements. |
| Payment Schedule | Employees receive fixed payments at regular intervals, either monthly or weekly. | Independent contractors are paid after presenting an invoice to complete their tasks. |
Read more: Independent Contractors in Argentina
Financial Planning for Your Remote Team in Argentina
Hiring remote workers in Argentina requires more than legal compliance. You’ll also have to prepare for the financial implications of this management decision. The following is a list of the costs associated with hiring an Argentinian remote team:
- Salary: As an employer, you’ll be expected to remunerate your team for their operations. However, you should note that the minim wage for employees in this region is ARS 65,427. You must also settle their 13th-month salary, which equals 50% of the base salary.
- Overtime: Your remote team’s overtime will be paid at 50% of the base salary for extra time worked on normal days. However, a 100% payment is due for work done during the holiday.
- Paid Leave: Remote workers are entitled to a 35-day paid leave.
- Maternity and Paternity Leave: Remote workers are entitled to a 90-day maternity leave and 2-day paternity leave.
Navigating Compliance and Legal Risks
Two types of workers are available to foreign companies – employees and independent contractors. While both work relationships have a few similarities, they are distinct and may affect your business differently. Therefore, you need to classify the members of your remote work team properly.
If you misclassify employees as independent contractors and vice versa, it could be detrimental to your business because you’ll end up paying or owing benefits without even realizing it. If you’ve wrongly paid statutory benefits to independent contractors, retrieving the money can be difficult, leading to financial losses. On the other hand, failure to pay statutory benefits to employees could lead to sanctions and penalties from local authorities.
Misclassifying employees and independent contractors may also harm the intellectual property rights of your organization, especially if they decide to lay claim to the discovery of an innovation. The intellectual property rights of a product can’t be attributed to your company if it was designed by a contractor. If you choose to go ahead with selling a good or product where you don’t own the intellectual property, you could risk legal problems. You must correctly classify your workforce members (employees and independent contractors) to avoid employee disputes and legal penalties. Keeping your work environment healthy will also be made easier by correct classification.
Streamlining Remote Hiring in Argentina
No doubt, hiring remote workers to join your workforce is tough. You’ll be expected to stay on top of payroll, labor laws, and tax regulations while avoiding non-compliance penalties. As a result, it may be tough to keep up with all aspects of your business simultaneously. You must partner with recruitment agencies and EORs to simplify the process. Globy is a reliable recruitment committed to helping you navigate the pitfalls of hiring Argentine remote teams. We offer a comprehensive list of features encompassing the entire recruitment process, including onboarding, and HR support, and can connect you with EORs to handle your payroll and taxes.
Globy connects you with the best remote talent in Argentina, simplifying your hiring process.
Further reading: Software Developers in Argentina
FAQs
Employer contributions in Argentina include social security, healthcare, and other mandatory insurance. These contributions are typically around 27% to 29% of an employee’s gross salary and cover benefits like pensions, health coverage, and worker’s compensation.
To pay employees in Argentina, employers must adhere to local labor laws, including paying salaries in Argentine pesos, complying with minimum wage standards, and making necessary social security and tax withholdings. Payments are typically made via bank transfers.
An Employer of Record (EOR) handles all legal employment responsibilities, including payroll, taxes, and compliance with local labor laws. This allows companies to hire employees in foreign countries without establishing a local entity, reducing administrative burden and legal risks.
Payroll tax in Argentina includes contributions to social security, healthcare, and other mandatory insurance. Employers typically contribute around 27% to 29% of the employee’s gross salary, while employees contribute approximately 17%, covering benefits like pensions and health insurance.
