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Potential for Stronger Colombia-China Trade Relations

Potential for Stronger Colombia-China Trade Relations

In recent years, market observers have recognized a high potential for stronger Colombia-China trade relations. As many know, China is the second-largest economy in the world. Colombia is the fourth-largest economy in whole Latin America. A pairing like this offers strong potential trade channels for exporters and importers operating in Colombia.In the last decade, all of Latin America’s economies have grown more accustomed to receiving Chinese investment and commercial attention. China is the biggest trading partner for Brazil, Chile and Peru. As part of that, Brazil received US$66 billion in Chinese investment, Peru US$25 billion and Chile US$9 billion. Chinese trade with Latin America jumped to US$225 billion in 2016 from US$12 billion in 2000, according to Jason Marczak, Director at the Atlantic Council. We outline the potential for a stronger context for Colombia-China trade relations and opportunities for multinationals to enter the market. Overview: current Colombia-China trade relations With Colombia-China trade relations strengthening in recent years, China has become Colombia's second-largest trading partner. Colombia is now China's fifth-largest trading partner in Latin America. In 2018, Colombian imports from China reached US$4.06 billion. Top 10 imports from China in 2018 include (table adapted from TradingEconomics): Colombia imports from China in 2018ValueMineral fuels, oils, distillation products$3.48 billionIron and steel$297.79 millionCopper$171.67 millionCoffee, tea, mate and spices$16.66 millionOres slag and ash$15.46 millionRaw hides and skins (other...

Manage your Business Risks with Due Diligence in Mexico

Manage your Business Risks with Due Diligence in Mexico

When doing business in Mexico, managing your business' risks with due diligence practices is essential to its success and longevity. Language and/or cultural barriers, understanding the market and the way of handling businesses are challenges that foreign business owners can face when expanding abroad. Buying existing companies or partnering with locals are key ways to reduce these challenges and get support navigating an unfamiliar market.However, it’s imperative to protect yourself when undertaking either of these processes in Mexico by conducting thorough due diligence checks of the companies and people you will surround yourself with.The purpose of this process is to minimize the risk present in a transaction by performing a detailed and independent analysis of the various business departments of the firm. Find out more about due diligence in Mexico and how to manage your business risks. Reducing risks and being prepared is key for starting off on the right foot in Mexico. Why is due diligence important in Mexico? Due to its strategic location and large population, Mexico is an attractive base for setting up a business in Latin America. Over the last decades, Mexico has attracted an enormous amount of foreign investment, and increasing numbers of large companies are establishing themselves in the country. These companies commonly enter the market by buying existing companies that hire local employees, or by partnering with other local companies.Despite this, commercial security remains a challenge for Mexico, and companies are encouraged to protect themselves...

Trends for Foreign Direct Investment in Central America

Trends for Foreign Direct Investment in Central America

In recent years, Central America has become an attractive destination for people and companies that want to do business. The region is targeted by foreign investors due to the continuous development that countries are pushing for in various economic sectors such as renewable energy, technology, infrastructure, tourism, agriculture, manufacturing and others. Foreign direct investment (FDI) in Central America is on the rise. The region’s governments are establishing clear regulatory frameworks that better position their economic policies to foreign entrepreneurs and investors. Their collection of free trade agreements – and willingness to pursue new partnerships with trading nations – also allow greater flexibility for import and export activity. We take a look at FDI trends in Central American nations, and the advantages they have to offer companies expanding into Latin America. Trends for investment in Central America The 7 countries making up the Central American region are Panama, Costa Rica, El Salvador, Guatemala, Belize, Honduras, and Nicaragua. As small nations, Central American governments understand that foreign investment plays a key role in their development. Therefore, each nation offers certain advantages to attract investors to its shores and become more competitive against other regional stars such as Brazil, Mexico, Colombia and Chile. There’s been an upwards trend for foreign investment in Central America over the last 2 decades, thanks to various economic policy reforms that have made conditions for foreign investors more favorable. Between 2010 and 2017,...

2019 Trends for Foreign Direct Investment in Brazil

2019 Trends for Foreign Direct Investment in Brazil

Considered the eighth-largest economy in the world and the largest in Latin America, Brazil is one of the leading economic figures in the region. In 2018, Brazil's GDP reached US$3.365 trillion, and according to the International Monetary Fund (IMF) the country's GDP is expected to increase by 1% in 2019.  Brazil is considered one of the most attractive countries for foreign investors in Latin America. This attractiveness is due to the size of its domestic market (211 million inhabitants), its wealth of raw materials, and its economic diversification. We look at the latest trends in foreign direct investment in Brazil. Foreign direct investment in Brazil Like most countries in the region, Brazil is in strong demand for foreign direct investment (FDI) to support the development of its economy. In 2018, Brazil received US$46 billion in FDI, according to data provided by the Brazilian Central Bank (Banco Central do Brasil). The main investor countries are the Netherlands, the United States, Germany, Spain, and the Bahamas. These investments were mainly directed towards oil and gas extraction, the automotive industry, financial services, trade, electricity, paper production, ICT, storage and transport, food industry, and mining. In August 2019, Brazil's FDI reached US$72 billion, representing nearly 3.91% of the country's GDP in the same month. In September, foreign investment increased by an additional US$6.3 billion, which points to a good outlook for the end of the year. Main drivers for foreign investment in Brazil There are a number of options for foreign investment in...

From Startups to Movers and Shakers: New Zealand Business Successes

From Startups to Movers and Shakers: New Zealand Business Successes

New Zealand’s business climate brings about the ideal conditions for commercial success. The South Pacific island nation houses a productive, motivated workforce, easy market access and a pro-investment government declared by Prime Minister Jacinda Ardern as “open for business.” Its multicultural, ‘melting pot’ demographics, reputable universities and innovative cities support progress driven by diverse values and perspectives. We explore some of New Zealand’s longstanding and emerging business successes to come out of its vibrant business environment. Startups in New Zealand - Economy Overview New Zealand outshines many others in the region with its robust economy, dynamic set of economic strengths, repeated demonstration of leading innovative thought, and global connections. Insulated from the 2008 global financial crisis, this self-sufficient economy sports ongoing positive growth. For the year ended March 2019, GDP showed a 2.7% increase, driven by goods-producing industries. As number one in the world for ease of doing business, it’s no surprise the country is also nurturing a growing startup ecosystem. Some companies emerging from the South Pacific country’s commercial environment have experienced significant success in their field, setting good examples for those who follow. Kiwi influencers Rocket Lab Rocket Lab was founded in Auckland, New Zealand in 2006 by Peter Beck. He received seed investment from a fellow New Zealand entrepreneur, Mark Rocket. Rocket Lab was established as a small satellite launch company, working as a provider to service micro space...

Top Drivers Behind Fintech Developments in Latin America

Top Drivers Behind Fintech Developments in Latin America

Latin America’s regional economy is capturing the world’s attention as it continues to grow at a rapid pace, stealing the spotlight from other regions such as Asia. Various government drives to increase foreign direct investment (FDI) are leading to legislative reform and competitive commercial outcomes. Multinational businesses are taking up tax and investment incentives to set up shop in the region and funnel into enviable trade channels built by strong trade blocs such as Mercosur and the Pacific Alliance. Supporting continuous development and growth is Latin America’s rapid turnover of people from traditional business practice into the online commercial world, where connection and convenience play to the wants and needs of the region’s growing middle classes. The development of financial services into a consumable online commodity is no exception. Financial technology or ‘fintech’ is bringing more of the We explore top trends in Latin America’s fintech environment, and where the hotspots for fintech activity are. Overview: technology in Latin America Latin America has been slower than others to come to the table of technological innovation, and governments are turning to their legislative mechanisms for foreign business and investment as potential culprits for this. New initiatives aim to increase FDI in many of the region’s fastest-growing countries. The promotion of new, foreign business has brought technological innovation to many of Latin America’s traditional sectors; predominantly, online and mobile commerce, financial services and some agritech initiatives are...

Colombia: OECD Member Driving Foreign Direct Investment

Colombia: OECD Member Driving Foreign Direct Investment

Colombia currently is one of the most attractive countries in South America. This is not only because of its amazing natural landscapes, but also its emerging economy, geostrategic location for international trade, and newest membership to the Organization for Economic Co-operation and Development (OECD). Through inter-institutional work, the country is boosting its economy and has achieved rapid growth and stability in recent years. Accordingly, Colombia’s government now focuses on the expansion of economic influence in the region and the world. Colombia and the OECD - What is the OECD? The Organization for Economic Co-operation and Development (OECD) is an international organization that promotes the rule of policies for a better life. Accordingly, all member governments advocate and work on establishing frameworks to solve shared social, economic, political and environmental challenges. Best practices sharing is one of the main principles ruling the organization and its members. According to the organization, OECD countries and key partners represent about 80% of world trade and investment. Developed economies as the United States, most of the European countries, Australia, Canada and developing economies as México and Korea are member countries of this important organization. The OECD works in a diverse and comprehensive agenda, covering topics related to economic co-operation and development such as: employment, finance, sustainable development, innovation, investment, and trade among others. Accordingly, all member states should follow the standards and...

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