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Mexico: a top destination for Spanish investments

04/19/2016 10:53
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In spite of the current economic crisis in Latin America, 77% of Spanish are intending to increase their investment this year. 

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The report by the IE Business School on the outlook for Spanish investment in Latin America highlights that Mexico and Panama are the favored destinations for these investments, ahead of countries like Brazil, which has always traditionally headed the list for this type of transactions.

6% of the companies surveyed plan to cut back on their investments in Latin America in 2016 and 17% will maintain them at the same level.

SMEs are also opting for Latin America, but this year Columbia has overtaken Brazil as a destination for establishing this type of companies, with 71% compared to 69%.

This shift can be explained by the ease and attractiveness Colombia offers when investing, as the Brazilian market has more complex procedures when it comes to conducting these transactions.

The report also reveals that 78% of the Spanish companies surveyed consider that Latin America will be their main source of income in 2016. Mexico heads this list thanks to the 90% of companies that have a commercial presence there. Its second competitor, Brazil, lags almost 20 points behind, with a 73% commercial presence of Spanish companies.

Mexico and Brazil are the leaders in terms of Spanish companies establishing in their regions, followed by Colombia, Chile and Peru. The countries where Spanish investments are due to rise most are Mexico, Peru, Colombia and Chile, in that order. They are expected to fall in Venezuela due to the serious political and economic crisis.

Mexico is the favorite country for Spanish investments thanks to its internal market, competitiveness and geographic location.

The most attractive city in Latin America is Mexico D.F., which has displaced the previous front runners, Sao Paulo and Miami.

There is also predicted to be an increase in investments in Cuba and Argentina in 2016. This is because of the expectation of new opportunities thanks to Cuba's rapprochement with the United States, and to the change of government in Argentina.

Ever greater numbers of Spanish companies are opting to invest in Latin America, although only in scenarios they consider to guarantee both economic and political stability.

Source: Panorama report on Spanish investment in Latin America

By BBVA Innovation Center