business resources
Dmytro Rukin: The real cost of entering LATAM markets
28 May 2026
Every quarter, I talk to founders, investors, and payment companies who want to enter Latin America. They've seen the numbers: Brazil alone is a 59 billion dollar e-commerce market growing at 20% annually. Pix processes over 6 billion transactions a month. The region has more than 3,000 fintechs across 26 markets. The opportunity is real. What's also real, and what nobody puts in the pitch deck, is what it actually costs to get in and stay in.
I built LaFinteca from the ground up in Brazil and expanded to five countries across Latin America. What I'm going to share here comes from our P&L, not from a report.
The first thing that surprises people is regulatory capital. In Brazil, if you want to operate as a payment institution with e-money issuance and card services, the minimum capital requirements are significant and have increased substantially over the past two years. The Central Bank raised them in response to fraud cases and insolvency events among regulated entities, which is reasonable but changes the entry economics dramatically. We're talking about millions of dollars locked in your capital structure before you process a single transaction. If you also want to handle cross-border payments under the eFX framework, there are additional requirements. And if you're considering a VASP license for stablecoin operations, the regulatory capital adds up further depending on your activity scope.
Then there's the licensing timeline. Getting a payment institution license from the BCB is not a six-week process. Depending on your structure and the completeness of your documentation, expect 6 to 18 months from first submission to authorization. During that entire period, you're paying lawyers, compliance officers, and technical staff without generating revenue from regulated activities. If you're a foreign company, you need to incorporate locally as a limited liability company or corporation, which adds its own layer of corporate law, tax structuring, and governance requirements. BCB Resolution 494/2025 unified many of the authorization requirements, which simplified some things, but also made authorization mandatory for all payment service modalities. There's no more flying under the radar with low transaction volumes.
Compliance is where the ongoing costs live. AML/CFT under Law 9.613/1998 and the terrorism financing rules under Law 13.260/2016 are not optional and not light. You need a compliance officer, transaction monitoring systems, suspicious activity reporting, customer due diligence processes, and periodic internal and external audits. The BCB also requires a governance policy reviewed every two years and available for inspection. Cybersecurity regulation adds another layer: incident response plans, data protection protocols consistent with Brazil's LGPD, and operational resilience standards that got tighter with the September 2025 regulatory package. For a mid-size fintech, compliance costs in Brazil alone can run 15 to 25% of your operating budget in the first two years.
Now multiply that by country. Mexico has its own Fintech Law from 2018 with CNBV oversight. Colombia's SFC regulates payment institutions separately. Chile's 2023 Fintech Law created a new licensing framework. Argentina has BCRA requirements. Each country has its own corporate formation rules, tax regime, AML framework, data protection law, and licensing process. There is no single LATAM license. There is no regulatory passport. Every market is a separate build, with separate legal counsel, separate compliance infrastructure, and separate capital requirements. When people talk about "entering LATAM" as if it were one decision, they're compressing what is actually five to seven separate market entries into a single line item.
The tax dimension is another area where projections tend to be optimistic. Brazil's Remessa Conforme program introduced a 37 to 40% effective tax rate on cross-border imports. ICMS, PIS, COFINS, and IOF all layer on top of each other in ways that are difficult to model until you're actually operating. Transfer pricing rules between your local entity and the parent company add complexity. Argentina's currency controls and multiple exchange rates create their own distortions. Mexico's VAT on digital services requires local registration and withholding. The tax picture across LATAM requires a full-time function, not a spreadsheet exercise.
Hiring is the cost nobody budgets accurately. Senior compliance talent in São Paulo commands salaries that compete with traditional banking. Bilingual legal counsel who understand both local regulation and cross-border structures are scarce and expensive across the region. Technical talent is abundant in Brazil but retention is competitive, especially with remote opportunities from US and European companies offering dollar-denominated salaries. In smaller markets like Colombia or Chile, the specialized fintech talent pool is even thinner.
What I tell everyone who asks about entering the region is this: the opportunity is genuinely massive, and it's not going away. But the minimum viable investment to do it right, meaning licensed, compliant, locally incorporated, and properly staffed in a single major market like Brazil, is far higher than most pitch decks assume. For a multi-country operation, multiply that accordingly. The companies that fail in LATAM usually don't fail because the market didn't want their product. They fail because they underestimated the cost of operating inside the regulatory perimeter and ran out of runway before they reached scale.
The region rewards companies that commit. But commitment here means capital, patience, and a willingness to build local infrastructure that can't be shortcut. Anyone telling you otherwise is either selling you something or hasn't done it themselves.
