SME regulatory and financial challenges in Latin America

Small and medium-sized enterprises (SMEs) in Mexico, the Dominican Republic, and Peru are navigating various regulatory, fiscal, and financial challenges.

In Mexico and the Dominican Republic, businesses have faced high tax burdens and regulatory complexity. In Mexico, legal instability and overregulation are estimated to cost companies between 544 billion and 907 billion pesos annually. In the Dominican Republic, the Chamber of Commerce and Production of Santo Domingo noted that tax burdens and new requirements on electronic transfers affect competitiveness.

In Peru, concerns have been raised regarding proposed legislative powers that might eliminate special tax regimes, potentially hindering the formalization of micro and small enterprises (MYPE).

To mitigate financial barriers in the Dominican Republic, the National Council for the Promotion and Support of Micro, Small, and Medium Enterprises (Promipyme) has actively provided support. In Barahona, Promipyme distributed RD$72 million in financing to approximately 350 to 372 entrepreneurs. Director General Fabricio Gómez Mazara highlighted that between 66% and 76% of these credits were directed toward women entrepreneurs, with roughly 40% of benefits reaching single-parent households. Additionally, Promipyme and the Universidad Católica Tecnológica de Barahona (UCATEBA) signed a collaboration agreement to provide training and technical assistance in business management and financial literacy to strengthen the local entrepreneurial ecosystem.