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Adam Walker
Member
Username: Adam_walker

Post Number: 62
Registered: 4-2007
Posted on Tuesday, January 08, 2008 - 7:49 pm:   Edit PostPrint Post

Evening all!

So, after much negotiation with my firm back in London, they have agreed to fund a small operational office here in BA, to allow me to recruit a small team (I am from London)...

I am currently pushing paperwork through etc and viewing potaential offices, however I am having huge problems as I have no "guarantia" - I have the funds to pay 1 year up front, but this doesn't seem to do the trick, they want somebody to pay monthly with a guarantor as security in case I try to up and leave...

My firm is a large, and well established one, and anyone who meets me would realise I am not going to damage or "up-and-run"

Have any of the buidding entrepreneurs found a way around this?

Does anyone know anybody with a small office/department that is available to rent!? I have been looking at small locations for around AR$1000/1200, as well as large apartments which I could live in as well as use as an office for around AR$3000/3200.

Any advice or ideas welcome!
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Roberto
Board Administrator
Username: Admin

Post Number: 1441
Registered: 12-2004
Posted on Tuesday, January 08, 2008 - 9:47 pm:   Edit PostPrint Post

The "guarantia" is absolutely common with no work arounds I know of. Paying up front would still not cover possible damages after you are done, say last day you steal all knobs, faucets, light bulbs, etc. which is common. The flat that was sold for usd $55k in 2001 to a martillero -mentioned in another thread- was half rented to a really well known music agent who upon leaving took all air conditioner wall units destroying all walls. Who would have thought. Thus, the 'garantia' safeguard applies even if you are the most honest of the bunch.

But perhaps somebody here knows someone that operates differently...
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 301
Registered: 5-2005


Posted on Tuesday, January 08, 2008 - 10:11 pm:   Edit PostPrint Post

Roberto is right as usual. The "guarantia" is VERY common here. There may be ways to get around it but it's not so easy. I know ever since I've lived in Buenos Aires I've always had to have one to legally rent my office space. The good thing is typically you first need it to lease a space but when you renew the owner tends to see if you are reliable, pay on time, are caring for the property and when you renew it they just make it an extension of the renewal and don't necessary ask you to show it again.

The guarantia is necessary because the laws here are all pro-tenant. A tenant could totally destroy the place, stop paying rent and there is little recourse and you can't just kick a tenant out. You must go through the legal system which can take 2-3 years to get a bum tenant out. This is why so many locals find short-term rentals to foreigners so much better (and less risky) than doing 2 year standard leases to locals.

As Roberto properly mentioned, you can pay 2 years up front but that doesn't prevent you from robbing the place blind so they really want someone that owns property in the Capital (Buenos Aires proper) that will co-sign for you. Typically it doesn't matter who you are, what your name is, how much money or net worth you have. They still want the guarantia.

It's not so easy getting a guarantia because most people hate asking someone else to guaranty a property up for them and it's a lot of responsibility if that person stops paying or gets sick or destroys the place. Also, something very interesting is many people won't allow you to be a "guarantor" for yourself. Meaning if you own properties you can't use one of your own properties to secure the lease. There are exceptions to the rule but I couldn't lease my own apartment where I live under my own "guarantia". I had to ask someone else as the owner didn't allow me to use any of my own properties and I own quite a bit of properties in Buenos Aires. That was VERY frustrating. I offered to pay 2 years up front to avoid the guarantia as I didn't want to ask anyone but in the end I still had to have it.

For my office, I had to go the route of putting the lease under my SRL's name, having a company officer sign the lease and then I used one of the properties I own to guaranty the lease. Again, when the 2 years ran up on my lease, they didn't ask me to provide it again. The owner saw I took care of the property, paid the rent on time and there was NO risk at all.

Now when my 2 year lease ended, I signed a 2 year extension and the owner knew me and didn't require another guarantor. He knew I was reputable, wouldn't destroy the place and would pay on time.

The process of a legitimate rental the paperwork can be very long. I've co-signed for very close friends and a few employees in my office that worked for me several years and the paperwork is very long. It even has clauses like if the person dies you agree to pay the rent, take over the lease, etc. So needless to say you would want someone close to you.

I believe there are companies you can pay to be a guarantor but honestly I don't know if they are shady or not. I've seen ads in the paper but I always thought they were not legit so I never tried.

Personally, I've been asked to be a guarantor over the years dozens of times and I'd never agree to it unless it was a very very close friend, family or someone I totally trust. It's a big responsibility.

Now, in your situation you have very few options. VERY few owners will allow you to rent and run a business out of it. Even if it's a small business if it's not specifically written in the lease and they can't you there might be penalties or they can even kick you out so I'd be careful and not to anything that isn't legitimate.

The way to really get ahead in Argentina is by doing things the legit way. They always cost much more, take much longer, more problematic but if you really want to grow, avoid legal hassles or potential liabilities for yourself and your corporation back home, my advice is to do things the right way (which unfortunately in Argentina means the difficult way).

Things are NOT efficient here for business and things are difficult. One possible solution is for you to rent a residential space that is zoned residential/commercial (professional) and let the owner know that you plan to run a small office, will not have lots of traffic and get their approval.

The other thing is that many owners will ask to see your DNI. Now, I don't know if you have a visa to do business in Argentina. Many foreigners don't bother to but the truth is that is illegal and you shouldn't be working in Argentina without getting a working visa. It's not easy and it takes time but again, doing things the right thing here in Argentina takes a lot of effort, time and sometimes money.

If you don't get a working visa it means you are doing business in Argentina illegally and you are putting yourself and especially your company with potential problems so I'd recommend before you think about leases you make sure you are legally set up to do business here.

Now this may sound complicated and if so you realize it is! Many foreigners doing business here are doing it illegally, don't have DNI's, working out of their apartment or with cellphones, not paying taxes, etc.

My advice is take the time to get set up the right way. If you are only planning to work in Argentina a few months or a year or two you might think it's not worth the bother but any entrepreneur that really believes in themself or their company will try to think longer term and get set up properly.

I find it ironic that many Americans or British or Europeans complain or don't like the fact that illegal aliens are coming into their country and working illegally, not paying taxes, etc. and then they go to other countries and do the same thing. I think anyone that really has a love and respect of this great country of Argentina will be respectful and take the time to get set up the right way. (Adam - I am in NO way, shape or form implying this to you. I'm speaking in general here from what I see going on).

I wish you the best of luck.
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Adam Walker
Member
Username: Adam_walker

Post Number: 63
Registered: 4-2007
Posted on Wednesday, January 09, 2008 - 8:12 am:   Edit PostPrint Post

Thanks Roberto and Saint, as always...

I'm doing everything legally, as my bosses don't want to be mixed up in anything to the contrary - I am currently in the process of the DNI, and the paperwork for the "SA" is being set up in my partners name (who is Argentine) while this is processed... therefore it is all above board.

So I have overcome some big hurdles to get here, but this is not one I expected... I can see why there are concerns though, if someone was actually underhand enough to run off with air conditioning units and door knobs!

It sounds like my only chance is to negotiate directly with the owner, in the hope he can see I am not a crook. The estate agents are not really pushing my case...

If people know of property owners who maybe open to "discussion" on this, please pass my details over to them.

Thanks again for the advices, anyone with further ideas, please add to this thread!
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WTMendoza.com
Member
Username: Welcometomendoza

Post Number: 96
Registered: 7-2007


Posted on Wednesday, January 09, 2008 - 9:24 am:   Edit PostPrint Post

Hi Adam,

This is a sore topic here in Argentina as it has been pointed out on this thread also. In fact here in Mendoza, there was a well known movie made here back in the late 90's, with household name Hollywood stars, etc...and all I hear about from the locals is how many bills the "team" left unpaid, and how trashed they left their various places where they stayed for many months to film. So it is not just the locls that the local fear but you can be a well known guy too and still get the garantia obstacle.

In the case of this film crew, they left a hefty deposit in place of the garante, but apparently in the end it wasn't enough.

I have helped several people relocate and rent for standard rental contracts here in Mendoza, and you can bet that if you indeed do have direct dialogue with the owner, there is a good chance you can convince him/her to accept a pre-payment scheme in lieu of a garante.

The trick is that many most estate agents do not allow you to have direct dialogue with the owner, and the real estate agent won't pass on your proposal to the owner, even if the agent says he did.

In my case, I always encourage direct dialogue between a renter with the owner, if the renter wants, and I make the direct communication possible, every time.

Here is a scenario that has not been turned down yet, as an alternative to a garante:

2 year lease:
Month 0: 2 month damage deposit, plus rent payment for months one to six.
Start of Month 5: rent payment for months 7 through 12
Start of Month 11: rent payment for months 13 through 18
Start of Month 17: rent payment for months 19 through 24

The reason why landlords/owners consider and accept this scenario is because of the big payments they get twice a year, and because of the timing of the payments, they can see if a problem is on the horizon or not. They can also come in and do spot inspections whenever they want, knowing that they can essentially tap into your prepayments as additional damage funding if you or one of your associates indeed trashes the place. They also have the 2 monthís damage deposit at the end of the lease to tap into if needed.

You, as a renter, can also take advantage of 3 different opportunities to legally exit a 2 year lease by giving 30 days notice after the first 6 months.
Adam, I realize you are in BA , and that you are considering a commercial lease (standard which is 3 year), but if you manage to get with the owner directly, face to face, and want to convey a payment plan such as the above, I am guessing you will have great success. Itís all about making the landlord/owner comfortable with your proposal and your demeanor. The above payment scheme ca be used as a core proposal. Good luck and let me know if you have any other questions regarding this.
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movingtoargentina.typepad.com
Intermediate Member
Username: Sapphos

Post Number: 116
Registered: 2-2006
Posted on Wednesday, January 09, 2008 - 9:38 am:   Edit PostPrint Post

Adam, although I don't have experience in the office rental market, I can speak from experience in the long term market and have to agree with WTMendoza.

It has been my experience that dialogues always get your much further if not all the way to a contract. The agent often can't be bothered if they have to step out of their comfort zone, which often means altering the way they "normally" do business.

WTM offers you a great alternative to the traditional rental scenario and always have an exit out if you do use a prepayment.

Our first rental was a nightmare but we had paid out significantly ahead and although the owner did fix things she took her time. I think she was better than she could have been simply because I was pregnant so she didn't want any further problems if something happened to me or the baby because the heat wasn't working in a 3000 sq foot house!

Also, our initial real estate agent didn't want to be bothered to do any prepayments and then when he found out the owner would accept it he wanted to surcharge us for doing a "special" contract.

So be ready for all kinds of scenarios. If you find someone who has lived abroad sometimes they are more flexible with expats. A good friend just got a great deal because of that.

hope this helps along wiht the other great advice in this thread.

Laura
Ebook Moving to and Living in Buenos Aires, Argentina
http://movingtoargentina.typepad.com
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Adam Walker
Member
Username: Adam_walker

Post Number: 64
Registered: 4-2007
Posted on Wednesday, January 09, 2008 - 12:13 pm:   Edit PostPrint Post

WTM - I like the suggestion, I will certainly try it - I'll try just about anything right now!

I hear you on the equipment front, I am thinking more and more a "live-in" apartment maybe best - however I do plan on buying the biggest PC's available, just to make sure anyone thinng about running off with them will get a bad back in the process!

Thanks Laura - I have actually read your web site before to pick up tips. As you rightly say, direct dialogue wil be key... I will try to find some duenos ASAP, as the estate agents are not proving fruitful.

Again - if people know any property owners, please pass them this thread to get in touch with me!
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Benco
Junior Member
Username: Benco

Post Number: 35
Registered: 4-2007
Posted on Saturday, January 12, 2008 - 4:33 pm:   Edit PostPrint Post

Adam,

when I started to look around for a small office a few months ago I was also worried about the garantia problem, since I had heard the inmobiliarias wouldn't even talk to you without one.

However my experience is that it is not such a big problem if you are able to pay one year in advance. The majority of real estate agents were willing to pass on such an offer - you just need to explain your situation. In my case I offered a slightly higher deposit than what they were asking for and signed a "resolucion anticipada" with a date in the future. It basically means they can easily kick me out if I fail to pay for the second year.

Yes, some landlords will reject your offers, but it is not so difficult to find someone willing to rent out without garantia.
And after all, for a small office we are not talking about a lot of money - you indicated a price of about 1000 pesos per month which is reasonable, and there are plenty of free offices in Microcentro and Tribunales. Check out Clarin and LaNacion, they have a classified ads section every day.

If you would like to work perfectly in the white you will need the "habilitacion municipal" for your office, so make sure the "reglamento de copropriedad" of your building allows professional use ("apto. profesional").

Good luck!
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Apartmentsba.com
Advanced Member
Username: Saint

Post Number: 309
Registered: 5-2005


Posted on Sunday, January 13, 2008 - 12:39 pm:   Edit PostPrint Post

Hmm...maybe a small office that is really cheap might be easier. I'm not sure. The rentals I went through were both in upscale areas of Recoleta where owners tend to be much pickier. Maybe as Benco said in other areas you would have an easier experience but my experiences weren't easy but then again my office rents are about 20 X the rents you are talking about here and a much bigger space spanning multiple floors of my building. 1,000 pesos per month is not so much to pay for an office space.

I agree with Benco that you should make sure you are set up to do business in the "white" and everything is all set up. I routinely get phone calls to my consulting company from foreigners that set up shop here to work and then they get caught working and the landlord wants to break the lease as it was a residential lease.

I'm not sure how difficult a small lease would be for cheaper area. I do know that several friends and employees have rented residential spaces and they all needed a guarantor. In any decent area most people want a guarantor.

I agree with all of you if you can get a diologue with the owner that is always the best thing that can produce good outcomes.

Good luck. Let us know how it turned out.
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Benco
Junior Member
Username: Benco

Post Number: 36
Registered: 4-2007
Posted on Sunday, January 13, 2008 - 1:59 pm:   Edit PostPrint Post

Probably these things depend strongly on the price range, and maybe also on whether you try to rent as a person or as a corporation.

About the "habilitacion", I forgot to mention that you should also check if the area is purely residential (probably not if other offices or shops are nearby) and make sure that the terms of use (destino) in your contract are okay. Obtaining the habilitacion involves an escribano and an architect who will check everything, and you really don't want to run into trouble after signing your lease.

I am not sure if the majority of offices actually do have the corresponding habilitacion (in contrast to shops ("locales"), which I assume to be subject to controls). For me it was clearly necessary because I needed an additional license and they checked the habilitacion in the process. And they did not allow working and living in the same apartment either.

But well, in case you do not need special licenses and nobody is likely to ask annoying questions in the future, an agreement with your landlord may be all that is necessary for you.
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Benco
Junior Member
Username: Benco

Post Number: 37
Registered: 4-2007
Posted on Sunday, January 13, 2008 - 11:08 pm:   Edit PostPrint Post

Some more thoughts about the garantia issue...

I perfectly believe it might be a huge problem and close to impossible to find an upscale commercial office space without garantia. But for the lower price segment of the market what might play a role is that there are many less affluent Argentineans who have absolutely no way of obtaining a garantia, e.g. when nobody in the family owns a property. These people also live and work and do business somewhere, and so there are ways to get along without garantia.

I remember one of the first offices I visited in a bad area (Rivadavia 5000), situated in a gallery with the charms of a basement garage. The rent for 12 m2 was around 400 pesos per month, and there were several offices available. The choice was either a rental contract with garantia or a "comodato" without. It is a different type of legal contract that gives you almost no protection, and you would pay for 3 months in advance and renew the contract after this period. The manager of the gallery told me that about half of his tenants (about 30 or so) had comodato contracts. There were all sorts of shops and a few professionals, and even a studio of a (probably very cheap) lawyer.

Now this place was terrible by most standards but nevertheless I had a big smile on my face that day. I just knew that if everything else would fail I had a place to go, and that all these horror stories about garantias were not true in my situation. So Adam, this is probably not the best place to recruit investment bankers, but when you are desperate enough send me a PM and I will give you the contact information...

Finally I found a much nicer office right in the center, and I would recommend to be patient and make a few appointments every day. Mind you that you are the one who needs to go out, call people and make appointments - relying on a real estate agent to search for you is probably a bad idea. Yeah, they tell you they look around and call you back, but I assume this is basically a polite way of saying they would rather drink mate and chat about football.

Working in the city of London I imagine you come from a fast-paced environment and are also ambitious to push your project. But things here simply take their time and somehow one has to accept that. I would at least look around for a month before making major compromises.

If nothing works out maybe you could resort to a part-time office or virtual office solution, I have seen advertisements here in Buenos Aires and it would surprise me if you need a garantia for that.

By the way many foreigners live permanently here but rely on a sequence of temporary rentals. Taking into account the cost of furnishing an empty apartment and the fact that many people return home after one or two adventurous years, this is not such a bad solution.

As ApBA has mentioned you also find ads in the newspapers offering garantias. From what I have heard there are a few shady agencies who are in this sort of business. They attract real estate owners who are about to sell their property and would like to earn some extra cash by loading the title with garantias before selling. The agency drives these people around and they rush through many escrituras per day, where they pretend to be some good old friend of the prospective tenant and sign the garantia. This is what you can buy, and as a very last resort you might consider doing so - you are not going to destroy the place anyways. I am not sure who actually gets fooled in the process - maybe your landlord who gets a worthless garantia, or the new owner of the property who obtains a bad title. I am not informed about the details of how it works, but I assume they exploit the time delay involved in checking a title or garantia, or a shady escribano is part of the scheme. The more cautious landlords accept only garantias from Capital Federal as these can be checked within a day or two, and sometimes require the guarantor to be a family member.

To sum it up my message is that when you are patient and flexible there will always be a way to find a suitable office - maybe you need to accept certain compromises, but it can be done.

All the best!
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Adam Walker
Member
Username: Adam_walker

Post Number: 67
Registered: 4-2007
Posted on Monday, January 14, 2008 - 4:33 am:   Edit PostPrint Post

Hey Benco

Many thanks for your thoughts and advice, it's ood to hear a positive story!

Indeed I have had one agent come back and say their office owner would consider such a deal - although it is a bit of a hole, so I havent jumped into signing up, even though I am very nervous about not getting somewhere! I just know how much it can affect you and your team working out of a place that has no natural light/lots of noise etc... however beggars cant be choosers and I'll go for it in a week or two if I have nothing else!

I have seen advertisments for these temporary office, but I asusme they are quite pricey, and not in my AR$1200 price range?! Maybe I'll check it out anyway...

I actually may prefer a "comodato" as my bosses have said depending on performance, there could be a fair amount of growth, so I may need a bigger place and move!

Anyway - Clarin online gave me some good options, and we are getting the paper each day - thanks agin for the tips, Ill be sure to let you all know how it goes!
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Adam Walker
Member
Username: Adam_walker

Post Number: 69
Registered: 4-2007
Posted on Tuesday, January 22, 2008 - 6:40 am:   Edit PostPrint Post

Hi All

I wanted to mention (as did Benco on another thread) I have indeed found an office!

It wasn't easy, but not impossible either, even though I lacked a guarantee...

I actually managed to have 3 or 4 offers "sin guarantia" agreed to in principle, however there was a definite trend where the office was in terrible shape - basically, the good places wanted a guarantia, and the bad ones would consider without, as they were struggling slightly to get it rented out.

I so nearly jumped at the first one who agreed - Benco, your advice made me decide to wait and see, I am glad I did as the new office is great.... thanks!

I definitely had more luck when dealing directly with the duenos/owners, I tended to set up a meeting without mentioning the guarantia, act as charming as possible (or have my girlfriend wear a low cut top) and then hit them with the offer. Most of the agents said no, but not all - the agent who did help me in the end was a good friend to the owners, and seemed happy to go the extra mile, especially as they were keen on having money upfront... frankly, for a month and a half commision, I am not surprised they went the extra mile, I am tempted to set up an estate agency now!

Thanks to everyone who gave advice etc. with this, be assured, I will be writing again with my next problem :-) hopefully I can help a few of you with yours.

Cheers
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Roberto
Board Administrator
Username: Admin

Post Number: 1465
Registered: 12-2004
Posted on Wednesday, January 23, 2008 - 1:01 pm:   Edit PostPrint Post

Good luck to you, Adam. And thank you for the information.
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WTMendoza.com
Intermediate Member
Username: Welcometomendoza

Post Number: 206
Registered: 7-2007


Posted on Wednesday, March 26, 2008 - 9:34 am:   Edit PostPrint Post

doing biz in BA...from The Econmist point of view

http://audiovideo.economist.com/?fr_story=98ad98e4 e9db274b9a38558911a1e8b4dd3b15d5&rf=bm
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Roberto
Board Administrator
Username: Admin

Post Number: 1606
Registered: 12-2004
Posted on Friday, March 28, 2008 - 12:51 am:   Edit PostPrint Post

Good link. Thanks!

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