Central America has been a region that for several years has been presenting itself as a strategic zone for doing business. Thus, in addition to the intra-regional expansion of Central American businessmen, there has also been an increase in the interest and participation of companies outside the region in investing and doing business in Central America. An example of this was the approval of the Central America-United States Free Trade Agreement (CAFTA).
This interest of the foreign company in achieving greater investment or exposure of its brand goes hand in hand with the introduction of the products that the company develops and manufactures in a third market. However, the Central American market may present certain particularities or vicissitudes and this may raise the question for the foreign company as to what is the best way to enter a market other than the one it has been developing and is familiar with.
Thus, it has been usual that the foreign company, in order to reduce the risk of entering an unfamiliar market, in which its product or even brand may not be completely known, makes commercial alliances with a local company that assumes the risk of the placement and sale of the product in its local market, or represents it for the conduction of its business locally.
Therefore, the regional Litigation and Arbitration team of Consortium Legal has seen the need to compile in this magazine the main concerns and questions that may arise, both for a local company that distributes in its country a product of a foreign company, as well as for the foreign company itself that wishes to invest in one or several countries of the region or that already has an active relationship with a local distributor.
It is our intention that this document will serve as a reference for all those companies that wish to invest in the Central American region and even for local distributors, and that it will be a useful tool for structuring and making business decisions.