The government has authorized the first 28 software developers to receive the benefits of the industry’s promotion law. Almost 200 companies applied but many of them failed to submit all the paperwork. “They were the first to be authorized but will not be the only ones. There will be more authorizations soon”, sources from the Industry Department said.
The authorized companies were Software América, Neoris, Sofrecom, Meya Argentina, Excelencia en Informatics Solutions,Pixart, Adecef, Entrepids, Program Consultores, GyL, Worldsys, Hexacta, Buenos Aires Software, Delsat Group, Soft Office, Denarius, Data Streams Systems Argentina, Vía Argentina, Huddle, Interfaces, ATS, CWA, DC Sistemas, Business Smart, American Switching Network, Informática Orión, Axoft and Open Solutions. None of these companies has a turnover above $43 million, a figure that places them within the small-business category.
According to Martín Méndez, country manager to Neoris Cono Sur, “this law enables us to continue investing in research and development, the corporation’s main bet when it analyzed Argentina’s software quality”. It belongs to Mexican Cemex, it has branches in 7 countries and Rosario is home to the “excellence center” from where it exports to the world. “There are 200 employees in our local branch and we have invested US$ 1.2 million since 2000. We hired 30 people in December and will be hiring 70 more”, said Méndez to LA NACION, and pointed out that “today we assign 70% of production to the local market and the rest to exports. It was the other way around in 2003 and that is because of the economic growth.”
According to Juan Ruggero, CEO to Buenos Aires Software (BAS), a company with more than 26 years’ experience in developing software for administration purposes, “the most important aspect of this law is that it stimulates the companies to hire employees in accordance with employment and tax laws which in turn minimizes unfair competition”. This company has 75 employees and exports to Paraguay, Uruguay, Peru,Chile and Venezuela.
Among other issues, the law establishes fiscal stability for ten years, a 70% reduction of employer contributions, and a 60% reduction of income taxes. In order to access these benefits the companies must at least fulfill one of the following requirements: use more than 3% of total costs for investment and development, export 8% of sales or have a quality certificate. It is also a requirement to hire employees in accordance with labor and tax laws and not to have any fiscal debt. The 28 authorized companies agreed to a 15-% payroll increase (around 300 professionals), and to jointly assign $ 4.6 million to research before year-end.
Both Ruggero and Méndez pointed out that the worst problem in the industry is the lack of professionals, a fact that increases labor costs. The industry presently employs around 32,000 professionals and according to the Cessi, the chamber that gathers software companies in the industry, there will be around 9,000 openings this year, and demand will reach 14,000 people during the 2007- 2010 period.