By: Mark Johanson | BBC
July 22, 2015
Envision the architecture and cafe culture of Paris, the cuisine and fashion sense of Milan and the dusk to dawn nightlife of Madrid, and you’ll begin to understand the allure of Buenos Aires, which combines some of the best aspects of those cities — at a 30% discount.
“People feel immediately at home here,” explained Joanna Richardson, who moved to the Argentine city from Britain 30 years ago and co-authors Hola, Buenos Aires!, a long-running relocation guide for the city’s estimated 30,000 English-speaking expats.
Beyond being the birthplace of tango, Buenos Aires is a draw for expats for other reasons. It has become an all-around cultural playground with more bookstores and theatres per capita than any city in the world. Public education is free, the healthcare system is top of its class, and personal safety is higher than in every other city in Latin America, save Santiago, Chile, according to the 2015 Safe Cities Index.
This sprawling metropolis of 13 million people was once one of the richest cities in the world. In some ways, it still seems that way, but the crumbling state of its infrastructure and high levels of poverty are merely hidden in the fringe — something expats discover quickly.
“Buenos Aires is a city that will constantly surprise you, but it’s not an easy city,” Richardson said. “The fact that it’s so unpredictable can be both charming and frustrating.”
Corruption and mismanagement have marred Argentina’s economic growth, and for the last century it’s been in a perpetual cycle of booms and busts. The latest major bust occurred in 2001, when Argentina suffered the single largest sovereign debt default on record.
One result: the cost of living plummeted. The collapse sparked a gold rush for foreigners, but is now the source of much consternation. Everything from banking to securing an apartment is full of hoops and new arrivals must be prepared to jump into the fray.
Here’s what you need to know if you’re considering Buenos Aires as your next expat assignment.
Argentina has a complex currency landscape stemming from 2011 restrictions on the purchase of US dollars. The increased demand for greenbacks from peso-weary Argentines gave birth to parallel exchange rates: a formal one from the government and an informal “blue dollar” rate that can be as much as 60% higher. Blue dollar moneychangers are so ubiquitous on streets like Calle Florida that it’s easy to forget that exchanging money at this rate is technically unlawful (yet so common that local media publish both rates).
Credit-card purchases and withdrawals from a cash machine will use the official exchange rate, so many expats opt for a private casa de cambio orcueva to change money at more favourable rates or arrange money transfers through companies like Xoom.
Expats who earn dollars, pounds or euros in offshore bank accounts will have a very high quality of life in Buenos Aires, affording things like domestic help that may be out of reach back home.
Those who earn pesos and don’t have access to foreign currency, however, will find the city pricier, with the average monthly wage in Buenos Aires hovering around 12,500 pesos (about $1,370 at the official exchange rate), according to Salary Explorer, a career resources website. A value-added tax of 21% can make some goods and services more expensive than in Europe and North America.
Finding a home
Michael Koh, CEO of investment company Koh Inversiones, said now is a good time to rent in Buenos Aires “because there is a lot of volume and a lot of competition”.
Monthly rental fees for a furnished luxury apartment in the trendy Palermo or industrial chic Puerto Madero neighbourhoods run the equivalent of about $1,500 for one bedroom to $2,000 for two bedrooms, according to Koh, an American entrepreneur who moved to Buenos Aires in 2003 and founded consulting and property management company ApartmentsBA, which he sold in 2011. Short-term rentals cost much more than those on the standard two-year lease, he added, but both require a guarantor who owns property in Argentina. Those who don’t know someone – or whose company doesn’t serve as the guarantor – may be asked to pay several months upfront.
Purchasing those same furnished apartments in Puerto Madero or Palermo could cost about $150,000 and $250,000 respectively. Koh said many expats with relocation packages are able to buy an apartment, give it to a property management company to manage, and “rent” it back to themselves without exceeding their per diem.
Prospective buyers should be aware, however, that most real-estate transactions are done in cash (generally crisp one-hundred dollar bills) with a 30% down payment directly to the seller and the remainder at closing. Furthermore, buying property in Argentina is by no means risk-free and, due to frequent economic uncertainty, may be better suited to professional investors.
Argentina’s instability has left it with a disproportionately low amount of foreign investment compared to its neighbours. But some big multinationals in the city include ExxonMobil, Renault and Google. Banking, technology, oil and hospitality are the biggest industries for expat workers. Buenos Aires is also an increasingly popular hub for self-employed creative types and telecommuters who work for companies in North America or Europe from the comfort of a Palermo cafe.
There are nearly a dozen categories of temporary residence visas to choose from in Argentina. Popular options include the financier visa (a flexible permit requiring proof of a minimum monthly income paid into an Argentine bank account) and the contracted personnel visa (a visa for foreigners employed by Argentinean companies). Everyone needs a national identity card to legally work in the country, and those who want a job outside of a multinational firm will need a high level of Spanish comprehension.
Some expats, like American Dan Perlman, have found success as small business owners. Perlman moved to Buenos Aires from New York City in 2005 and opened Casa SaltShaker, one of the city’s 40-odd “closed door restaurants,” where chefs welcome paying guests into their homes for gourmet meals.
Perlman said the process of buying a house in the posh Recoleta neighbourhood and turning it into an ad hoc restaurant was relatively straightforward, “though the rules are less spelled out here and often things are left up to the interpretation of the official you’re talking to”.
Buenos Aires is a very cosmopolitan city that often feels more European than Latin American. Consequently, expats tend to experience less culture shock than elsewhere in the region, particularly when it comes to the food. From juicy bife de chorizo (sirloin) and lomo (tenderloin) to pasta, pizza and medialunas (croissants), the flavours are largely familiar.
Richardson said the one complaint she often hears is that it’s hard to make Argentine friends. “I tell people that the best thing to do is to find an activity that you really enjoy, get involved and invest,” she explained. “Argentines are actually super friendly and whatever your interest or hobby, there will be somebody somewhere in Buenos Aires doing it.”
Learning conversational Spanish is the best way to feel a part of the society, she added, and Buenos Aires is rife with language schools. Alternatively, many Argentinean professionals are eager to learn English and will offer a free language exchange in return.
Spouses and children should be included in an expat employee’s work and resident permit and are granted a residence permit of their own that allows them to work freely during the course of the assignment. Most expats with young kids send them to private schools that offer bilingual programs and the International Baccalaureate Diploma. Be aware, however, that annual tuition and fees can climb to $30,000 for top schools.