Latin America Market Entry via Mexico, Without Committing First
Most companies compare Mexico and Brazil and choose Mexico. But two remote sales people rarely produces a pipeline. There is a better first step.
Open a local presence and follow your global customers into Mexico, or develop first a local pipeline before committing to a large operation.
Choosing Your LATAM HQ
Mexico or Brazil: how companies choose their Latin America headquarter
For tech companies expanding into Latin America, the decision of where to open its LATAM Headquarters usually comes down to Brazil or Mexico — the two largest economies in the region.
While Brazil offers its unique advantages as the largest economy in South America, it is also, in practice, its own region: Portuguese-speaking, with business regulations that do not carry across the rest of Latin America. Entering Brazil gets you Brazil.
Mexico is Spanish-speaking, as almost every other country in the region is, and has a more similar culture. Companies with North America focus get two benefits from one operation: an entry point to Latin America, and a nearshore delivery base for North America.
Mexico overlaps with U.S. business hours, flights are comparable to domestic travel, and the engineering and commercial talent sits in established hubs. More importantly, Mexico is the United States' top trading partner and sits inside the North American trade bloc.
The Model
How to test the Latin America market before committing
This is the Subsidiary-as-a-Service model, the IT equivalent of the shelter model that manufacturing has used in Mexico for decades.
PILOT
Add Mexico's operational capabilities in days, not months
A local presence, the ability to deliver proposals and quote locally, and someone on the ground. You pay only for the people you use, on shared infrastructure.
ADJUST
Build a pipeline and find out what the market actually responds to
Before the cost structure is fixed. Avoid the learning curve by working with Everscale's local IT industry know-how and network.
SCALE
The operation scales following revenue, not before it
The model is efficient from day one, with the option of opening a stand-alone operation when it reaches its own efficiency threshold.
Entry Options
Different options, depending on how far along you are
Pipeline development is the usual starting point for companies testing the market. It is not the only way in. Some arrive with the plan already settled and open a sales office or a regional hub directly.
EARLIEST STAGE
Pipeline Development
Best for companies testing the market for the first time with no existing pipeline or local customers.
All scenarios can scale in size, cities, hiring type, and offices as needed. Including implementing recent grads bootcamps and relocation of foreign personnel. Because of Everscale industry expertise in the enterprise software ecosystem, the turnkey subsidiary incorporates best practices and built-in capabilities that will assist foreign companies in bypassing the initial learning curve of the local market.
Legal Structure
Do you need a legal entity to enter the Mexican market?
Not to start. You can have people working, quoting and building a pipeline in Mexico before any entity exists, which is the point of testing first. Some enterprise software companies can also start selling with local resellers, building local partners to develop new customers in the region.
You will need one when a local customer requires a Mexican counterparty on the contract, for which you can create the legal entity for commercial paperwork, while you continue your small and flexible operations under the as-a-Service model, leveraging the infrastructure already built.
Until then the entity is a cost with no revenue attached to it. Most companies open one in year two, after the market has answered.
Location Strategy
Which Mexican city for your Latin America base
With a population of 130 million, Mexico has a clear advantage over other LATAM countries that attract foreign investment, such as Costa Rica (5M) and Panama (4M), with cities larger than other countries.
Largest market in the country, where most multinationals and enterprise buyers are headquartered, and the usual base for a Latin America headquarters.
The business capital and closest major hub to Texas. Strong for industrial and enterprise accounts, and for teams that will also serve North America.
Start-up and tech hub capital, also known as the Mexican Silicon Valley. Delivery capability matters as much as sales presence.
Latin America market entry consulting for technology companies
Need to answer an RFP or build local presence for a global customer? Tell us the scenario and we will tell you what it takes.
Customer Examples
IT Services Company
IT Services Company with potential customers in the region, was uncertain of entering the market due to the associated costs and uncertainties. To overcome this, utilized Everscale SUBaaS, which allowed them to support their first sales engagements in Mexico while building a local pipeline with a temporary team. Once the pipeline matured, it set up a local entity and grew the team, while still benefiting from an agile operation.
HCM and RPA Provider
Global Digital Transformation Company, with offices in APAC, the Middle East, and the Americas. Their global customers require support in Mexico, so instead of subcontracting local tech companies that could become future competitors, are evaluating expansion options into Latin America. Chose the SUBaaS option to avoid setup costs and start supporting their customers locally in weeks, while taking their time in deciding where to open their own branded offices and the right configuration of their team to hire, gradually increasing in size.
COMMON QUESTIONS
Frequently asked questions about Latin America market entry
Evaluate your Latin America market entry options
The SUBaaS framework supports testing the region and customer response before fully committing to a large operation.
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