Why is Investing in Latin America Good for your Business?

Latin America has grown on a global scale as a diverse and appealing destination for investors who want to expand globally and take their business to the next level. Latin America consists of countries like Peru, Argentina, Colombia, Brazil, Mexico and many others where the local population is highly educated, the government welcomes foreign participation in a variety of sectors and the natural resources are abundant.

Do you know that many of the best commercial opportunities are now available in Latin America? This is made possible by the tremendous economic development in many of the Latin American jurisdictions. See below some facts about the Latin American business environments, uncovering potential investment opportunities:

• Colombia is one of the greatest producers of Arabica beans in the world.
• Mexico has claimed to be the 7th largest automotive sector in the world.
• Peru is ‘pro-development’ regarding their mining sector.
• Chile leads the way in non-conventional renewable energy sources.
• Brazil new president is very ‘pro-business’ – encouraging FDI in the region.

Investing in Latin America can be an integral part of your global expansion plans.

LATAM Investment Opportunities

Another aspect that makes the Latin American markets so accessible is their determination to be involved in the global markets. This can be seen through legislative changes (for example, the creation of the simplified share company in Argentina) and through the creation of various regional trade agreements, for example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – ‘CPTPP‘.

This push by the national governments of many Latin America nations means that Latin America is very ‘open to business’ and is welcoming of international investors looking to enter the local markets.

Colombia remains as one of the most popular regions in Latin America in regards to investment, with the nation seeing steady economic growth and development over the past decade. The coffee produced in Colombia is on high demand from countries around the world and it is the only country in South America with direct access to both the Pacific Ocean and the Caribbean Sea – a perfect destination for trading companies. Colombia is an attractive economy where legislation allows full foreign ownership and where there are cheap operating costs and limited capital controls.

Additionally, the World Bank ranks Colombia as one of the most business-friendly zones in the region, along with countries such as Chile and Peru.

Chile is the country with the best living standards in Latin America and the nation has a highly educated local population, with many locals speaking English fluency. Many investors choose to establish a commercial presence in Chile due to its low levels of corruption.

Mexico is rated as an excellent investment destination due to its human talent which dominates a wide range of services and industries. A company in Mexico is able to operate with reduced manufacturing costs, high-quality service with relatively low labor costs when compared to Europe, the US or Canada.

Above are only a few of the countries which rank highly as investment destinations in Latin America. Additionally, countries such as Costa Rica and Panama are favored by foreign businesses.

Given its geographic location, The United States is a leading commercial partner for Latin America, having high volumes of both imports and exports in addition to well-developed relationships with most of the regions. With the NAFTA 2 being signed by the US, Mexico, and Canada (called the USMCA – United States-Mexico-Canada Agreement, or USMCA), trade between Mexico and the powerful North American countries is expected to boom and has brought about much-needed investor confidence to Mexico.

Setup and Establishment.

The setup and establishment of companies in Latin America are relatively straightforward; contradictory to many popular beliefs. Investors come from all corners of the globe and see Latin America as a region full of opportunity. In most Latin American jurisdictions, 100% foreign ownership is allowed, there are limited capital controls, and local companies are able to sponsor the visas of foreign individuals.

There are some minimum statutory requirements that all companies in Latin America must adhere to. In order to ensure complete corporate compliance, it is highly recommended to work with a local partner who can assist with all compliance matters, ensuring that your company remains in good standing with the local authorities.

Local Support – The Key to a Successful Market Entry.

Latin America continues to grow as a region full of commercial opportunities and with limited barriers to entry. Foreign businesses from around the globe have experienced commercial success in Latin America and new businesses are entering the various markets at an astounding rate to take advantage of all that the region has to offer.

Before entering one of the Latin America markets, it is best to consult with local experts who can guide your business venture during its initial stages of operations. Biz Latin Hub has offices in all key Latin America markets and is the trusted partner of many foreign companies who have expanded their operations abroad.

Reach out to our Managing Director, Mr. Craig Dempsey, to see how we support you and your business. Contact us today for personalized support.