????One entrepreneur wants technology startups to give the Argentine capital a serious look.

????By Ian Mount

????(Fortune Small Business) -- It didn't take much for Martin Frankel to realize that Buenos Aires was a good place to start a business.

????In 2003 he was working in the city as an intern with electronics giant Siemens. Meanwhile, back in the U.S., his girlfriend was busy renovating their Manhattan apartment. On a whim Frankel researched the cost of hiring Argentine carpenters to build cabinets from scratch and ship them home. His findings: About $18,000 -- nearly 80% less than if they were made in the States. "I saw there were business opportunities in Buenos Aires because of the dramatic difference in labor costs," he recalls.

????It was a lesson Frankel remembered when he returned to Buenos Aires to live in 2006. He used some of his savings to buy a 35% stake in Sugar, a bar popular with budget-conscious foreigners because it charges only five pesos ($1.35) for a pint. This past April he launched Areatres, a flexible office and meeting space in the Palermo district, home to a large U.S. expatriate population.

????Areatres is aimed at the growing number of Argentine and expat Internet entrepreneurs interested in launching firms in cheap-but-cosmopolitan Buenos Aires. It has a decidedly Silicon Valley feel, with modern, playful furniture and open networking spaces. It's also close to one of Argentina's few Starbucks (SBUX, Fortune 500). Frankel and his partners, Argentine architects Fernando Hitzig and Leonardo Militello, invested $200,000 to update the 4,700-square-foot space.

????"Part of the appeal of coming here was controlling my own destiny," says Frankel, 33, who earned an M.B.A. from George Washington University. "You can take entrepreneurial risks for a lot less than you can in the States."

????A day pass to work in the Wi-Fi-ready common space costs 80 pesos (about $22), while a four-person office runs some 5,000 pesos (about $1,300) a month -- inexpensive by global standards.

????Although Areatres is relatively new, it has already attracted entrepreneurs such as David Garrett, whose firm, Bueno Entonces, sells Spanish-language educational videos that can be watched on iPhones and other handheld devices, and Maria MacDonald, who founded YoQueVos, an Internet newsletter with shopping tips for trend-obsessed Argentines. Areatres recently hosted 400 guests for a gathering of Palermo Valley, an 18-month-old Web 2.0 networking group, and won a few new customers.

????"We researched San Francisco, Vancouver, India and Buenos Aires," says Withers Davis, chief technical officer of MokuZoku, a New York-based children's game and social-networking startup that opened its Buenos Aires office at Areatres. "The time zone is just one hour off Eastern time in the U.S., which is a huge advantage over Asia. And Buenos Aires has talent in the areas we need."