Latin America Is The Fourth Largest Investor In Spain

Latin America is the fourth largest investor in Spain?

Latin American investment abroad reached 38,255 million dollars in 2018, an amount similar to that of the previous three years. The main investors were Brazil and Mexico, and to a lesser extent Colombia and Uruguay.

Latin American Foreign Direct Investment (FDI) in Spain amounts to 40,517 million euros, which represents an increase of 200%, in the last ten years. The main investor country is Mexico (26,408 million euros), and it is also the country with the most varied typology of investors (technology, banking, consulting … companies). Latin American investors have made 140 acquisitions of shareholdings in Spanish companies. Apart from the historical and cultural links between the two regions, there are other reasons that explain why Spain has become a popular destination for Latin American investors in recent years. On the one hand, Spain has become a long-term investment destination, characterized by low investment risk and very high macroeconomic stability. On the other, it has the fastest growing economy among large European countries and the price of assets is attractive. Therefore, the Latin American region is the fourth largest investor in Spain only behind the United States, the United Kingdom and France.

This is one of the conclusions of the Global LATAM report prepared by ICEX-Invest in Spain with the support of the Ibero-American General Secretariat (SEGIB). The CEO of ICEX, María Peña, stressed that “Latin American FDI abroad is currently at a record high, in cumulative terms, with 655,000 million dollars.” The overcoming of the recession cycle and the beginning of a new cycle of Latin American growth have improved business expectations and allowed foreign investment to stabilize at $ 38,255 million in 2018. Currently, Latin American investment abroad, led by the two major powers, Brazil (377,548 million) and Mexico (228,501 million), amounts to 654,785 million of dollars.

However, the trajectory of both countries in 2018 was divergent: Brazil decreased its operations abroad while Mexico recovered levels of previous years. It is also worth mentioning the evolution in 2018, of companies from other countries such as Colombia, Argentina and Central America, with high levels of investment abroad, while investment abroad was modest in the case of Chile or Perú. 60% of Latin American investment abroad is intra-regional and the main recipients of investment outside the region are the United States and Spain in Europe.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.