Why Chile Wins & Brazil is Complex: A Founder's Guide to LATAM

Welcome everyone to another episode of the Nearshore FA Podcast. I'm your host, Brian Samson, and on this podcast we talk about the stories and people doing business in Latin America. This is going to be a really exciting show. I had one of the most fun conversations I've had in a long time with our guest today about his story as an expat in Latin America. Before I introduce our guest, let me thank our sponsor. That's Plug Technologies, plugg.tech, a great way to connect talent from all over Latin America with growing US businesses. Guest today is Brendan Quirk. Who is the founder of LACPA, which is an international consulting firm. And Brendan has been working with Latin America for over 20 years. Brendan, so happy to have you.

Thank you. Thank you. Appreciate that, Brian. Thanks for having me.

Brendan, man, like I said in the intro, your story, like, just had me hooked. It was fascinating. So I don't want to hold anything back from the audience. I want them to hear it too. Tell us just like, like a little bit of context on what you were doing right before you got into Latin America. And I believe it was Argentina was the first country. Just tell us a little bit, a little bit like the backstory and then let her rip, you know, how, how did this all unfold?

Sure. Yeah. So I, I was a CPA. I went to school in Boston, got my CPA exam, and I was going to take a job in California. I have family over there and, you know, I got a little break and I've always wanted to go to Patagonia and, and, and hit the mountains, you know, the, just to get down there. I had some experience as a volunteer in Mexico and Costa Rica. I taught English for like a month. So I was, you know, kind of moving jobs, had some time off. I, you know, I, I went to South America and had, uh, so many hopes and dreams of, you know, backpacking. I, marked off all the different trails I would take and all this stuff. And when I got there, uh, I was pretty shocked that I really couldn't communicate at all. And I was by myself, so I didn't get very far. And so I started taking Spanish lessons while I was there and just to get better at Spanish, you know, fast forward almost 25 years, you know, I've been an expat in Latin America 3 times. I speak Spanish at home now. You know, my kids speak Spanish, you know, and I consider myself part of the Latino community.

Yeah. So give us, give us some time reference here. Was this like 2004 if I was reading it correctly?

Yeah. Yeah. In 2004, Argentina had a financial crisis, 2001, 2002, a big devaluation, big challenge there. And so, you know, when I arrived, things were pretty inexpensive. So you can get pretty far on the dollar. You know, I think at the time it was 3 pesos to the dollar. So just a few years before that it was, it was paired to the dollar. And so, but you know, with that small amount of money you could have like a luxurious steak dinner and a bottle of wine. You know, it was, it was, it was pretty, pretty fun at the time for, for a young, young me. And yeah, so I, I, I was out there and I, I actually found myself in Mendoza, Argentina. So Mendoza's well known now, but at the time it wasn't really well known. This was just about the time that Malbec had been coming to the, the, the forefront in the wine industry. And it was Mendoza or the, the Valle de Uco, the Uco Valley was named as one of the 7 places in the world with, you know, perfect terroir for, you know, excellent winemaking. And I just happened to be a CPA, an accountant strolling through that neighborhood. And I met my now wife and I met some investors who were buying up land and going to build a, like a really nice hotel and a winery and this great business plan. They were backed by investors from California and they were like, wow, you're a CPA. You speak Spanish. You should join us. And I was, you know, probably 25 at the time. I just met, you know, a pretty girl and, you know, I had these investors and I was like, all right, you know, so I, I basically quit my job that I was supposed to be arriving like in a month in, in San Francisco. Yeah. Crazy. And, uh, so I never showed up for work at that job since contact, you know, we've been in touch. I know them now, but the, you know, it was, it was a, a changing time and I, I, I took on this project and it if you're familiar with the Vines in Mendoza, it's, you know, a luxury resort and spa with, you know, private vineyards and a winery. They have the Siete Fuegos Francis Mallmann restaurant there. It's just a beautiful place. So I helped them in the initial stages of starting that up. I wasn't there for too long. I'm still a shareholder in that business. I was dating my wife at the time and enjoying myself, but I, you know, I had an interest in going to business school. So I, I applied to business school and I decided to do it in Spain. Yeah.

Could we pause before you get to that part? Can we dive a little deeper into Mendoza? Because I mean, this is just fascinating in itself of, you know, you kind of stumble upon an opportunity and like what kind of work were you doing for the winery?

So I was their accountant. So I was like a financial director, financial manager. Local, and I really developed a lot there as a professional because not only did I get to work locally and I was speaking Spanish at the time, so I could do that in Spanish. I was managing a lot of the investors and the portfolios. And I mean, it was a startup in so many ways that we were experimenting with different business models and techniques. We're using technology, which at the time was fascinating. We had telephones, that were US phone numbers that rang in Argentina. You know, in 2005, that was, you know, that was really amazing. You know, you could call a US phone number and it would, you know, I'd answer it in Mendoza, Argentina. And so, you know, I was helping them, you know, we were selling wine. So we were estimating, trying to make wine prices. We're trying to sell it in the US, which was more complicated than we understood. We were buying the land. And if you know, at the time, Argentinian deals were done in cash. So we were buying land, like hundreds of thousands of dollars in cash. And I'm like walking down the street with a duffel bag, wondering if I'm going to get tackled by some guys as I walk out of the bank. So there were some interesting activities going on. Nothing illegal, but it was just, you know, people didn't trust banks anymore. So, so that's how they, a lot of landowners operated.

And were you, were you using USD currency or, or peso currency?

So we were, we had to do it in pesos. So I, we took US dollars, got them into pesos and then made purchases that way. Yeah. So it was, it was tough and, you know, luckily, you know, everything was fine, right? It was, it was safe. You know, we were de— we had local support and things like that. So it was, it all worked out really well. And you know, I, As anyone who's looked into those resorts, I mean, it's a beautiful, lovely resort tucked under the Andes Mountains. You know, it's, it's an amazing oasis right in the heart of wine country. So can't plug it enough.

Yeah. The way I describe, yeah, the way I, I like to describe Mendoza is, you know, take like Napa or Sonoma and then just surround it by snow-capped mountains with 70-degree blue sky, beautiful weather. Just one of the most spectacular places on earth.

Yeah. Just a, a lovely place. I go there every year. We spend a lot of time there. Yeah, no, it's a lovely place and I enjoy, you know, lots of family and stuff. So yeah.

And then Brendan, were you using, for the accounting nerds on this, as listeners were, you know, because you've got US investors, but it's an Argentine company, were you using GAAP practices?

Yeah. Yeah. We, you know, we were using local, you You know, so we had two sets of books, right? So we, we had the local books, uh, that, that we operated with. And we also, I mean, I was using QuickBooks, so we were using QuickBooks and we were operating for, uh, the US company because it was owned by the, the Argentine company was owned by a US holding. Yeah. So we were using US GAAP and I remember my first discussion about IVA, the VAT tax. I didn't know what the heck that was, you know, and, and, you know, I got a lot of learning out of this experience.

Yeah. And for a lot of people that are familiar with Argentina, I mean, this is, we talk about tariffs now under Trump, but tariffs and domestic protection was a, has been a huge part of Argentina for decades and decades. How did that impact what you guys were doing?

It had a profound impact, I think over the years, because Argentina had its ups and downs and capital controls, I think were what really made it difficult for us. The wine is inexpensive, as you know, when you look for premier wines and you go buy Los Alamos or Trapiche wine from Mendoza, it's less expensive than say California or France or Spain. But, you know, what we would run into was the capital controls. So as a business, we had difficulty operating in that market in terms of getting dollars in and out or getting our, just our, you know, our currency in and out and just operationally, uh, we weren't trying to take money out. We were actually trying to get money in. And when you did that, because they operated under several currency, uh, translations or conversions, you know, you wouldn't be getting the value that you needed. So you, there's a lot of time involved on how to do it.

I was going to ask, you know, I think a lot of people who visited at least Buenos Aires are familiar with like the blue rate.

Right.

You know, and like the publish rate, the Blu-ray, like what is the market rate really? And as a, it's one thing to be a tourist and you know, you're just exchanging a couple hundred dollars. It's another thing to be a business and you've got tens, if not hundreds of thousands of dollars that are flowing through. How did you navigate that and, you know, not losing significant money on exchanges?

Yeah, no, so we, we, we lost money on exchanges. Thankfully we had significant financial resources that we, we, we put in early before it got kind of hectic. I later took a job with a pharmaceutical, just, you know, a year later I was in Buenos Aires operating a subsidiary of a larger pharmaceutical and there it was a lot more hectic because we operated under a cost plus process. So we, whatever we had, we would invoice it to the US subsidiary, and then they would send us the money for the next month. And what's complicated about that is you got to make payroll in a country like Argentina where the labor laws are quite robust and there's a lot of risk in that. I mean, that, that was the big, that was a big challenge. I'd be talking to the bank almost as much as I was talking to my own and, you know, the, the people that worked in the office, you know, just because you're like, all right, so where's, you know, where's the currency fluctuating today? Should we So we wait till tomorrow. Uh, that, that was an interesting, uh, process the way that we operated that way. Yeah.

You know, even, even small things. I remember, you know, my first couple months I was trying to buy like 20 laptops or something, you know, for the engineering team and no one would let me buy on credit. You know, I needed all the cash and, uh, did you have experiences like that? Was it just way more cash intensive? Then, um, and, and could you get credit terms with, you know, different vendors and, and parts of your, your ecosystem?

No, you're absolutely right. Zero credit. Zero. The only credit we would get, and I mean, technically credit would be from like, you know, outside, like our office getting it from outside our own business, right? So our own company would, would loan us money maybe. But the, and you touched on another issue. I mean, getting an iPhone or a computer into the country was always difficult. In one occasion, we had somebody mail it to us. And then it got caught up in customs and then you had to pay the customs people and man, it was, it was messy and it cost about, it was almost twice the price of the computer. So what we would do is when people would travel like myself, we would buy a phone and a computer and bring it back and operate as it was one of our own. But yeah, that, I mean, that was a big issue because they wouldn't allow you to bring that stuff in. Um, through customs. So you can only bring it in as a foreigner, really.

Yeah. So we're talking a lot about, I guess, doing business on hard mode. What were some of the other sides of it? Like, how were the margins if you were to operate this business versus, say, a winery in Sonoma, or the labor, or some of the arbitrage opportunities that you got to take advantage of?

Yeah. I mean, obviously cost of labor was lower. You know, the investment we needed to build this business in Argentina was significantly less than we would've had to, and even in a second or third-tier wine place in the US. So it was, that was a big interest. Plus there, you know, we were breaking ground, if you will, in terms of greenfield. There wasn't infrastructure for this in Mendoza at the time so that, you know, they were, you know, they were really pioneering, which was pretty cool. The other thing I think, and this is a broader Latin America, I think benefit is, I mean, the people there are tremendously loyal, supportive. They're used to challenges in business. They're used to kind of dealing with externalities. And, you know, the things we're talking about with these financial challenges of how to operate. I mean, some of the business people I know in Latin America, some of the savviest business people. They, you know, they really know how to think through challenges and they don't, you know, freeze up on a major externality, but also, you know, just the people I've worked with, especially employees and talent. There's great talent, super loyal, you know, and the type of loyal, supportive, you know, if you need something or, and just community, I think has been fantastic. For the most part, for me, that, that's been the key. And what really drives me, obviously, I think it's probably pretty clear you can make a lot of money in the US, right? And I could probably make more money working with US clients, but you just have such a bigger impact in life, you know, you're doing so much more and you're, and you could feel it and you could feel the impact you have. So that, that for me is, is, is a huge value add.

Yeah, that's awesome. Okay. So I didn't mean to interrupt you there. So you decided to go to Spain to grad school and what's next?

Yeah. So we did, my wife and I went to grad school in Spain, which was great because half the program were Latin American professionals studying in Spain. And it was in English too. So that, that, that was, that was supportive, but you could also do program in Spanish. So you could do like Spanish electives and stuff. But then we went back to the US after that. And I had, when they found out I spoke Spanish, I knew what VAT tax was, and I had worked in several countries because in the pharmaceutical before that, I helped open offices in Peru, Chile, Mexico, Brazil. So I had a lot of broad Latin American experience. They threw me on a ton of projects in Latin America. So right away, and this was at this time, it was about 2010. And there was the big boom for the commodities boom, and there was a lot of demand coming from from China and the commodities market. So there's a lot of opportunities in Latin America. So a lot of the middle market businesses in the US were looking to operate in Latin America. So I had a lot of work and I had a lot of visibility in this consulting firm. I was working for a large accounting firm and the guy who ran Latin America retired and they were looking for someone to take his spot. And I was, you know, probably 35. I had a small family at the time and nobody else would move there. And I was like, my wife, we were living in Chicago freezing.

Yeah.

And my wife is like, I can't wait. I can't wait to throw my sweaters and winter coats and gloves away and move back to South America. So we did. So I took the job because I had that opportunity and we moved to Santiago, Chile. And so that, that started another journey and obviously Santiago is just on the other side of, of Mendoza. It's a 30-minute flight. It's a beautiful drive over the Andes Mountains, incredibly dangerous, but amazing. Just, you know, like driving, it's the largest mountain range outside the Himalayas and you drive through it on like a, you know, a two-way road. It's, it's beautiful.

Yeah. Amazing. If you could just dive a little deeper into some of the office openings that you did there. So you said Peru. Chile, Mexico. Did I, did I get everyone?

Yeah. Brazil.

Brazil. Yeah. So were you like living in these places for a period of time or how, how, how were you, how was that happening? No.

So, so we, we had an operating model that was pretty, pretty organized. It start, you know, it came from the US. There was a lot of different aspects to it, but we would first hire people. So we would hire people in, in country. Remotely, if you will, and we would operate that way. And then we would build from there. So we would partner with an accounting firm or a law firm, open up an entity, open up a bank account, open up, you know, some type of legal structure. And the way that we operated, we would have, you know, a legal team locally that would sign checks. They would sign for all the big decisions. So they were our power of attorney. And then we would have an operating group which would do the business of the company. And that's the model that a lot of groups will use, you know, so you have a separation of duties, so you don't have your salespeople sign in payroll checks and including themselves. So you remove that issue, but then you have to set up certain elements of the structure of the business. And so we did that in each of those countries. We would partner with different groups, different people, hire people. And they would operate the business reporting to people in the US, and then we would run the admin. So we would run the accounting and back office, if you will. Yeah.

Could you give a, I'll put you on the spot a little bit, but just kind of a macro, like out of those places, what was the easiest to do business? What was the hardest to do business? And, you know, maybe some reflections, you know, a decade later on the complexities of those countries.

Yeah, no, it's an interesting question because I think, you know, Latin America as a community in many ways, you know, a lot of similarities, right? But when you dig in, as you know, big differences, you know, really big differences. So by far the easiest place to set up and get going and just, you know, robust institutions, Chile, no doubt about it. You know, Uruguay is a close second. And the most complicated places, but, but the most complicated yet most invested in probably just because it's enormous is Brazil. Brazil, if you look at the World Bank number of hours dedicated to doing administrative work, compliance work for, for it's, it's like 1,000 a month. It's just insane. Bolivia is similar. Bolivia is similar, but you know, you don't have as much investment in Bolivia as you do in Brazil. So you don't see it all the time, but Brazil is, you know, just very complicated tax-wise, labor laws, you know, lots of different jurisdictions of responsibilities and they're all unique. Also, the language is a little twist because it's Portuguese and then the other countries fall sort of different places in between that.

Yeah. What did you think it was about Chile? Was it like it was more automation or less red tape or what, what were your—

it's the institutions. If they have robust independent institutions, the banking system's very sophisticated, the country is run in an organized way and they just have, you know, the appropriate administrative and involvement. It's very similar to the US, but it's newer. So the country was almost rebuilt, if you will, after Pinochet.

Yeah.

You know, it, it allowed some smart people to, to do it in a smart way. You, you know, using some of the US structure. So there's been some amazing things. So, so for example, I arrived there in like 2014 and I could make on my phone a payment to, you know, like we'd go out to dinner with some friends and we each, you know, I pay the bill and everybody sends me a transfer through their phone from the bank, bank-to-bank transfers. Now we do that on, on Zelle. It's fairly new and we do it with Venmo, which is also fairly new. There it was normal and it was 10 years ago, 12 years ago. So stuff like that was, was pretty impressive and it was low crime at the time. It got worse recently, but yeah, at the time it was, it was relatively safe. Institutions were robust. Uh, it was growing at a fast clip. So I felt more comfortable going there with my family, which also a lot closer to Mendoza for some of those reasons. Right. How was I going to, how was I going to get paid in Argentina? How was I going to, at the time, this, you know, it was, it was a, it was a question mark where things were going to go.

Yeah. Uh, I want to learn more about what you're doing today. Tell us about your business. Who do you serve? And, uh, you know, what your, uh, goals are.

Yeah, thanks. I appreciate that. Yeah. So I started a business really consulting in the international consultancy space, international accounting firms. So I do a lot of growth training. So while I was with that large consultancy in, in global consultancy, but I was in charge of Latin America, got to know a ton of different businesses and people in Latin America. So I focused a lot recently on doing trainings. To help them get trained up on next-generation technology, next-gen methodologies for getting clients and developing those clients and relationships into the future. But it's been very focused on the accounting industry for me. So that's where I've been for most of my career in some degree. So I've been doing a lot of that, but also something that's happening a lot these days is private equity's been buying accounting firms and there's been a lot of consolidation in the market, a lot of global businesses. So I've been doing a lot of work with global networks of accountants and global associations of accountants and helping them recruit and sometimes helping, you know, firms buy each other. So there's a lot of consulting in that. And I do quite a bit of public speaking in the industry. So I was in Colombia 2 weeks ago at the Instituto Nacional de Contadores Públicos. So the accounting industry. I did a talk to them about, you know, just the future of accounting and what's happening, new changes in the accounting industry that often, you know, you'll see here in the US and then it'll ripple its way in Latin America and vice versa. There's things happening there that are impacting us. There's amazing technologies and things happening that, that haven't quite come to bear yet with us in the US. So, you know, there's a little back and forth there. So yeah, that, I mean, that's the focus. Do a lot of consulting to the region, Spain, Europe, and US, but it's, it's always with international and often, uh, yeah. Yeah.

Well, as we start to wind down, I want to throw a few fun questions out there. Uh, I mean, it's, it's not often we talk to somebody as well traveled throughout, uh, the continent. Your, uh, favorite food in Latin America?

Ooh, that's a tough one. That's a tough one. 'Cause each country has such a unique style of food.

Maybe we'll, maybe we'll do one for Argentina and one for Chile.

Sure. So, and I'm gonna go with the empanada. The Argentine empanada is an amazing, delicious food that, you know, it brings in the Argentine beef, but also just some flavor and spice. And they're just, they're just delicious. And uniquely, Chile has its own empanada, and now they have a meat empanada. But if you go out to the, the, the of Chile by the ocean, they make seafood empanadas, and those are amazing. So I, I, I recommend both of those. Love it.

Considering you've done a lot of travel with your family and they were, they were small, you know, at a time, the easiest place travel to in Latin America with your family and the most stressful place to travel to with your family?

Yeah, that, that's interesting. You know, I think one of the things that I thought was amazing about having kids in Latin America is strangers, even when my wife was pregnant, like strangers would come up to us and like put their hand on her belly, which in the US people would freak out, but there it's quite common. You know, they love to see the children. And, you know, I, my kids were, I lived in Chile for 6 years, so my kids were, grew up there. My son was born there. So, I mean, I was just always amazed. People always went out of their way to help you if you had kids, everybody from police to airports to, you know, no matter what the country is, no matter where you were. But, you know, Brazil's a special place. And if you're trying to fly in and out of Brazil and get into the airport with traffic and all, I mean, you gotta hats off to the challenges there with commuting and getting around. But again, everybody's really nice, especially if you have kids, they're really helpful and supportive of families. It's a very family-oriented culture across the region.

That's awesome. Well, Brian, and this has been such a fun conversation. If people want to get ahold of you, what's the best way to do that?

Yeah, they can set up a time on my website or, you know, reach out on social media. So I'm I'm very much a LinkedIn social media person, so I'm on LinkedIn all the time. So if you want to look me up on LinkedIn and reach out that way, that's the best way to get in touch. Cool.

We'll drop that in the show notes. Well, Brennan, thank you again. Really fun conversation. And I want to thank our sponsor, Plug Technologies, plugg.tech. Great way to connect talent all over Latin America with US companies. This is the Nearshore Cafe podcast. I'm your host, Brian Samson, and we'll see you next time.

Thank you, Brian. We'll check it out next week for a new episode featuring another special guest.