Venture capital is streaming into Argentina's capital Buenos Aires, outpacing the rate of growth in neighbouring Chile and Brazil. But, as Ciara Lee reports, start-ups still face a challenging regulatory environment as they await new labour and tax reforms.
Big name investors have steered clear of Argentine start-ups in recent years. But this local banking app has the backing of billionaire George Soros. And it's a growing trend. Venture capital is streaming into Buenos Aires, outpacing the rate of growth in neighbouring Chile and Brazil The president's business-friendly agenda has spurred fresh interest. (SOUNDBITE) (English) PIERPAOLO BARBIERI, UALA FOUNDER, SAYING: " Some of the smartest minds in Argentina were the most sceptical about Argentina because they had seen through the cycles and they had been disappointed and lost a lot of money in trying to bet on a change that didn't come. This may end badly as well but I think countries don't change until they change." Argentina saw over a 200 percent increase in venture capital transactions between 2014 to 2016 Brazil leads the region in the amount of transactions, but its growth lagged at about 32 percent in that period. New labour and tax reforms being introduced in Argentina may boost things further. They will likely lower costs for start-ups. While investors have been impressed by the plans, unions haven't. Protests this week over the reforms potentially leading to 800 job losses at the country's social security administration. (SOUNDBITE) (Spanish) CARLOS ORTEGA, SECRETARY-GENERAL OF SECASFPI UNION, (SINDICATE FOR ANSES) SAYING: "Workers' contract law is the only legal means we had with which to defend ourselves. If they touch it, we are completely unprotected and obviously this is being done only for the employer." The government says it wants to formalise a labour sector that it sees as functioning with workers who are off the books. And there are further contentious changes planned - it wants to reform the retirement system - an even bigger driver of government spending.