Executives often return from meetings in Latin America (LATAM) convinced that a deal is imminent. The client has shown enthusiasm, said all the right things, and the international team anticipates a speedy closure. Yet, after weeks of inaction, they are left wondering what went wrong. Were they misled? Did something get lost in translation?

     Several factors can stall deals in LATAM, but one overarching challenge is understanding the local business culture. Below are three major cultural dynamics that frequently influence purchasing decisions in the region.

1. Economic History, Short-Term Thinking, and the Role of NFV

     International vendors are often puzzled when a LATAM client rejects a proposal that promises what appears to be a strong return on investment—such as a double- or triple-digit ROI. One major factor is the perceived credibility of those ROI calculations, particularly when taking NFV into account. In many U.S. or European ROI models, discount rates tend to be relatively low due to stable economic conditions, making projected returns seem exceptionally high. By contrast, LATAM decision-makers typically apply significantly higher discount rates to address persistent inflation risks and volatile exchange rates. This practice sharply reduces the perceived value of future cash flows, causing ROI figures—based on more stable economies—to appear less believable.

     Furthermore, this caution is rooted in LATAM’s history of high inflation, during which Baby Boomers and Gen X leaders experienced periods of triple-digit price increases. In these environments, immediate cost savings often took precedence over distant financial benefits, thereby cultivating a more cautious mindset toward long-term investments and lofty ROI projections.

2. Building Trust Where Judicial Systems Are Less Efficient

      In the United States and many European countries, businesses can typically rely on efficient judicial systems to settle contract disputes, offering both parties a measure of security. By contrast,  legal recourse in  LATAM can be slow and unpredictable, leading to a heightened sense of caution.

     This environment makes personal trust a top priority. LATAM decision-makers want to be sure a prospective partner will honor commitments, follow through on post-sale support, and deliver the promised returns. Just to let you know, conversation alone, although important, does not confirm a reliable partnership. If executives sense that an international supplier might walk away after the sale or fail to provide sufficient support, they will be reluctant to proceed—regardless of how appealing the product or financial model appears.

3. The Importance of Cordiality and Diplomacy

     Cultural norms in LATAM place great emphasis on courteous and harmonious interactions. In many regions—such as Brazil—professionals often avoid direct confrontation or blunt refusals, particularly when engaging with international counterparts. Instead, they might offer positive affirmations or enthusiastic responses as a way to maintain friendly relations.

     However, this diplomatic approach can lead to misunderstandings. A seemingly promising conversation may reflect politeness rather than a genuine commitment to proceed. Consequently, teams looking to establish business relationships in LATAM should seek explicit follow-up actions —rather than assuming enthusiasm alone indicates that a deal is sealed.

Final Note

     These cultural nuances—an economic legacy that fosters short-term thinking and higher discount rates in financial projections, a strong emphasis on trust where legal systems may be unreliable, and a cultural preference for diplomacy—shape how business is conducted in LATAM. By acknowledging these factors, international executives can better anticipate obstacles and address them proactively.      

If you’d like to explore additional strategies for navigating the LATAM market, [Schedule an appointment here] to discuss how I can help you succeed in Latin America.