Eduardo González
The vast majority of Latin American companies have increased their investments in Spain as “a new phase of internationalization”, especially due to the role of “springboard” that our country plays towards other markets, especially the European Union and Asia.
These are the main conclusions of the report ‘Latin American Investment in Spain’, prepared by Professor of Applied Economics Isabel Álvarez in collaboration with the Complutense Institute of International Studies (ICEI) and with the support of the Business Council Alliance for Ibero-America (CEAPI), and which was presented yesterday at the headquarters of the Ibero-American General Secretariat (SEGIB) in Madrid.
During the event, the Ibero-American Secretary General, Andrés Allamand, highlighted the emergence of “a new generation of young Ibero-American entrepreneurs with drive, vigor and capacity for innovation,” who have begun to land in Spain at the head of some “cutting-edge companies, highly technological, which make innovation a hallmark.” “They are very intelligent companies when it comes to taking advantage of opportunities and that add value not only from the economic point of view, but also from the social point of view,” and that have put “the focus on Europe” through Spain and, “to a lesser extent Portugal”, to even get closer to “other markets beyond Europe”, he added.
For her part, the president of CEAPI, Núria Vilanova, highlighted that Latin American companies are experiencing a “wave of the investment tsunami in Spain” that “will continue and accelerate.” “For entrepreneurs from Latin America, Spain is the springboard to the world, to Europe, Africa, Asia, even its neighbor to the north, the United States,” in line with the role of “springboard to Latin America” that Spain also plays in the opposite direction, specifically for other markets in the world with an “increasing interest in Latin America”, such as Saudi Arabia, the United Arab Emirates, Qatar, India, Turkey, the Philippines and even European countries, such as Germany, France, Italy or the United Kingdom.
According to Vilanova, Spain and Latin America are experiencing an “excellent moment of economic interaction” that translates into “bidirectional relationships from which both benefit but which have their future in internationalization towards the rest of the countries.” “We are stronger starting projects in Europe, Asia and the US with bases in Spain and Latin America,” she added. Likewise, the president of CEAPI highlighted the “new wave of ventures that will be led by the children of Latin American businessmen who do their undergraduate and graduate degrees here and are currently training in Spain.” “The impact on all these new elites of young people trained in Spain is something that we cannot yet measure, but we can intuit from close experiences,” she added.
The report
The report, which analyzes the responses of Latin American companies that invest and want to invest in Spain and collects the motivations for capital and investment flows from Latin America to Spain and its evolution, concludes that the main reason for companies to decide to Investing in our country, indicated by 86% of those surveyed, is “opening a new investment phase of internationalization of the company, that is, continuing with the evolutionary process of Latin American companies in their internationalization process.”
“Therefore, we can say that Spain maintains and increases its attractiveness as an investor country and as a springboard to other markets, especially in the European Union, as recognized by more than half of the companies surveyed, without forgetting that also 40% of Respondents consider it an important factor to invest in Spain that it serves as a platform to invest in Asia and other distant countries,” the report continues.
Furthermore, the market is one of the main attractions of Latin American investments when choosing Spain, since, “for 60% of those surveyed, it is essential to have Spanish companies as clients and suppliers, which is related to the strength of the customer base and supply chain, which influences decision making.”
Furthermore, the institutional and regulatory framework is an aspect that more than 80% of the companies questioned consider important and very important, and within this, issues related to the financial, banking and credit system, as well as the Legal stability that guarantees compliance with the law and contracts.
“After the pandemic shock of 2020, bidirectional flows of foreign direct investment (FDI) in Ibero-America have been reactivated, which strengthens its strategic role in the international context,” highlighted the author of the study.
In this context, Latin America as a whole has consolidated its position in fourth place in the world for FDI in Spain, after the United States, the United Kingdom and France. By country, 90 percent of Latin American foreign direct investment (FDI) in Spain comes from Mexico, Chile and Brazil. Mexico, by itself, constitutes 44 percent of the total (correlatively, Mexico is also the first destination of Spanish investments in the region), far behind the fifteen percent of Chile and eleven percent of Brazil.
These investments not only come from the so-called multilatinas (mainly focused on sectors such as mining, utilities -public services such as energy, water, gas and transportation- and manufacturing), but there is also an increase in presence of medium-sized companies (especially in science, technology and real estate investments) and small ones.
