Facing economic uncertainty along with a stagnant real estate market in Chile, Chilean real estate companies are actively redirecting their focus to Peru, where they see potential for significant returns in a dynamic and growing market. Forecasts show Chilean real estate firms will allocate over US$200 million to Peru’s property market by 2025, demonstrating their strategic redirection and trust in the Peruvian economic environment.

This migration of capital represents a clear trend: Chilean real estate companies are seeking to manage risk through diversification while exploring new growth prospects throughout Latin America during their extended domestic crisis. Peru stands out as an attractive destination for investors because of its relative macroeconomic stability combined with growing urban housing demand and favorable investment policies.

Chile’s real estate difficulties drive companies to expand their operations across Latin America

While Peru generates investor optimism, Chile’s real estate sector has faced significant difficulties. The industry suffers from reduced customer demand while construction costs escalate alongside increased regulatory demands and ongoing political unrest. Developers face a challenging market environment, which has led many to review their business models and growth strategies.

Throughout 2024, multiple top Chilean real estate firms experienced a reduction in profits along with unchanging sales figures in Chile. Consumer caution combined with restricted credit access further weakened the market demand for new housing units. These difficulties have led businesses to search for better opportunities beyond their national borders.

Peru: A Booming Market with Strong Fundamentals

Peru has presented an enticing alternative. The Peruvian Association of Real Estate Companies (ASEI) reported that Lima experienced a 30% increase in home sales during the first quarter of 2025 versus the same quarter in 2024. The middle-class expansion, combined with urban development and infrastructure progress, makes districts like Miraflores, San Miguel, Santiago de Surco, Jesús María, and Cercado de Lima central to the escalating surge.

Real estate experts observe that Lima maintains strong appreciation prospects as demand focuses on areas with quality transportation networks and safe services. This momentum has not gone unnoticed. Chilean real estate companies exploit this market development by focusing on the busiest city areas that enable rapid development, followed by sales and reinvestment.

Market Leaders Make Bold Moves

Paz Corp experienced a 123% profit increase from its Peruvian business in 2024, while Chilean earnings fell by 42%. The dramatic differences between regional performances highlight Peru as a dependable source for economic development. Paz Corp allocated US$34 million for Peruvian projects out of its total US$100 million investment plan for 2025. Peru generates 10% of Paz Corp’s profits and 18.5% of its revenue, which is projected to increase as the company continues to expand its operations within the country.

Peru serves as the main component of Besalco’s global expansion strategy. The company moved 159,000 m² in Peru while its Chilean operations sold less than 20,000 m² in 2024. In 2025, Besalco will allocate US$30 million to Peruvian development projects as part of its US$300 million total investment for that year.

The prominent Chilean developer Echeverría Izquierdo is increasing its focus on operations within Peru. The company achieved 40% of its real estate sales in Peru during 2024 while initiating construction on two major commercial developments in Lima. The company intends to strengthen its market position by allocating US$35 million towards commercial and residential projects in 2025.

Chilean real estate firms are rapidly moving into Peru to capitalize on emerging market opportunities

There are multiple important reasons why Chilean real estate companies view Peru as an attractive investment destination.

• Economic Stability: Peru anticipates its economy to expand at a rate above 3% per year until 2026 due to strong support from the mining, trade, and service sectors. The financial stability of Peru draws investors who prioritize secure long-term earnings.
• Rising Urban Demand: The continuous population increase and movement toward urban areas result in escalating housing demands throughout Lima and other cities. Accessible yet modern neighborhoods are seeing increased new home purchases led by middle-income families.
• Regulatory Environment: Peru presents a regulatory and tax framework that stakeholders find simpler and more predictable than Chile’s system. New development permits are processed more rapidly, which helps companies complete projects with greater efficiency.
• Undersupplied Market: Even with its recent expansion, Peru’s housing market continues to face supply shortages. According to government figures, Peru faces a 1.8 million unit housing shortage, which provides developers with significant expansion opportunities.

Looking Beyond Lima: New Opportunities in Secondary Cities

Chilean companies maintain their real estate investment focus in Lima yet seek opportunities within secondary cities, including Arequipa, Trujillo, and Piura. These cities demonstrate increasing trends in population size as well as rising income levels and expanding infrastructure projects. The combination of better connectivity and urban growth makes secondary cities strong prospects for residential and commercial development.

Developers benefit from higher profit margins in these regions because land prices remain low while competition stays weaker than in Lima. The government is channeling funds into regional infrastructure like roads, public transport systems, and utilities to make these cities more appealing for real estate developments.

Strategic Long-Term Positioning in Peru

While Chilean developers have yet to make substantial investments in Peru, these projects represent a clear directional trend in their business strategy. The growing number of successful business ventures in Peru will lead companies to widen their market footprint while developing permanent operations and forming strategic partnerships, along with initiating expansive mixed-use development projects.

The move represents a strategic shift from short-term crisis management to building a long-term market presence abroad. This development approach aims to secure market share through long-term plans in a nation expected to maintain economic and demographic expansion.

Paz Corp investigates multiple real estate avenues, including affordable housing projects and mixed-use developments that integrate retail and residential spaces. Echeverría Izquierdo uses its engineering and commercial construction expertise to focus on high-traffic business corridors in Lima for its upcoming projects. Besalco is developing new suburban projects directed at the expanding upper-middle-class population in Peru.

A Blueprint for Regional Expansion

Major real estate companies moving capital from Chile to Peru demonstrate their belief in the country’s extended potential rather than reacting solely to momentary domestic disturbances. Due to positive demographics, together with stable government and rising demand for contemporary living and business spaces, Peru shows potential to become a major regional hub for real estate investments.

The ongoing expansion of Chilean real estate firms in Peru could establish a model for their future growth throughout Latin America. The successful investment strategy in Peru could lead to more financial opportunities for neighboring nations that exhibit comparable economic and demographic profiles. At present, Peru emerges as the top real estate hotspot in the region, which attracts Chilean developers to its market.

Because economic competitiveness plays a vital role in drawing foreign investment, the region of Central America now recognizes Honduras as its most business-friendly nation due to its ranking in the 2025 Global Business Complexity Index (GBCI). The TMF Group, a leading international firm specializing in regulatory and corporate compliance, performed a yearly assessment of 79 countries worldwide, which ranked Honduras at 66th position, showing greater business ease compared to its regional competitors.

Honduras achieved a higher ranking than Costa Rica, which received 58 points and Nicaragua, which received 50 points, in Central America. The report demonstrates how Honduras has streamlined its commercial procedures and developed a stable business climate to make it a business-friendly country in Central America.

Regional Ranking Reflects Structural Reforms

Economists and academic experts believe that Honduras’ rise in the rankings resulted from specific improvements in its regulatory and business environment. University economist Professor Wilfredo Girón praised the government for establishing an improved business climate for entrepreneurs.

“We are on the right path. Despite my tendency to point out what needs improvement, today I see commendable efforts that merit positive recognition,” Girón stated during a recent media interview.

Girón emphasized that Honduras has become a more business-friendly country in Central America because of its enhanced transparency measures alongside the simplification of bureaucratic procedures and the advancement of digital government services. The updates represent comprehensive policy reforms, which emerge from joint efforts between government entities and private organizations to upgrade the country’s economic framework.

Advances in Digitalization Fuel Business Creation

Honduras achieved its reputation for being business-friendly in Central America through fast-paced business process digitalization. The GBCI reports that the government has successfully launched online business registration systems and virtual platforms for tax compliance and licensing.

Business founders can now establish companies and handle permits and regulatory filings through online processes, which remove many lengthy steps that previously discouraged local and international business initiatives. The recent developments have decreased waiting periods, while reducing face-to-face interactions with government staff and enhancing transparency.

The country has progressed in implementing fintech and e-government platforms, which serve to support more small and medium-sized enterprises that form an important part of Honduras’ private sector. The shift to virtual procedures modernizes the commercial sector while ensuring alignment with international corporate governance and compliance standards.

Foreign Investment Still Faces Obstacles

Local business leaders emphasize that numerous obstacles persist, even though the country has gained international recognition as a business-friendly country in Central America. As a regional manager in the maquiladora industry, Guillermo Matamoros warned that international praises can hide actual conditions on the ground.

Matamoros emphasized that technical evaluation must be coupled with genuine investor incentives to create an effective environment.

Matamoros recognized business facilitation progress yet highlighted the necessity of sustained investor trust, which relies on legal certainty along with consistent regulations and a competitive tax environment. According to his perspective, Honduras needs to develop an all-encompassing strategy with legal refinements, fiscal reform, and infrastructure upgrades rather than focusing solely on simplifying administrative processes.

Honduras needs to solve ongoing issues regarding the judicial system’s independence and corruption to secure its status as Central America’s top choice for business operations. It is essential to maintain these elements so that businesses, and particularly foreign-owned enterprises, can operate with confidence in their investments.

The current focus rests on Legal Certainty paired with Fiscal Policy

The private sector identifies weak legal frameworks as a significant problem. The stability of business contracts, along with intellectual property rights and labor laws, frequently suffers from political manipulation and instability. To draw high-value foreign direct investment (FDI), a country must ensure its legal environment remains predictable.

The demand for tax reform is steadily increasing in volume. International experts deem Honduras’ existing tax framework less competitive, when compared with neighboring countries’ systems. The excessive tax burdens combined with unclear incentive structures prevent investors from reinvesting their capital and creating new jobs.

The Honduran Council of Private Enterprise (COHEP) supports reforms that simplify the tax code, while pushing for investment incentives and improved public-private sector communication. This reform agenda would improve Honduras’ image as a business-friendly country in Central America and make it more attractive to long-term investors.

The status of Honduras within Central America and its global economic position

Despite Honduras ranking 66th among 79 countries worldwide, which may appear unremarkable, the position shows considerable prominence within Central American rankings. This improved placement shows a rising trend, which indicates increasing international trust in the nation’s economic management.

Nations with lower scores on the GBCI index usually feature uncomplicated regulatory systems, together with clear tax structures and strong digital services. Honduras needs to adopt effective practices from top-performing nations such as Singapore, Denmark, and New Zealand to advance its position within international rankings.

The business environment gap between Honduras and Costa Rica stands out as a clear indicator among Central American nations. Costa Rica, which receives praise for its democratic institutions and sustainability achievements, has recently fallen behind in terms of business simplicity. The current trend has the potential to transform investment patterns across the region and generate fresh trade and manufacturing dynamics.

Strategic Sectors Driving Business Growth

The Honduran government has pinpointed multiple sectors that can achieve high growth when the business climate improves.

• Textile and Apparel Manufacturing: The textile manufacturing sector in Honduras stands as a regional leader in maquila exports because of its favorable access to the U.S. market through the CAFTA-DR agreement.
• Renewable Energy: The development of solar energy and wind power projects receives support from international financial sources and changes in domestic energy policies.
• Agroindustry: Honduras exports agricultural products such as coffee and bananas and seafood products like shrimp while establishing value-added operations in food processing and packaging.
• Tourism: Sustainable tourism initiatives drive the promotion of the Bay Islands and Mayan archaeological sites.

Honduras can establish itself as a favorable destination for business in Central America by strengthening its sector regulations and increasing protections for international investors.

Workforce and Infrastructure: Dual Priorities

Site selection and business expansion decisions in Honduras need to evaluate both skilled labor availability and reliable infrastructure quality. The growing workforce in the country remains underutilized because educational and technical training deficiencies continue to affect productivity.

Government bodies and educational institutions, along with vocational institutes, are forming stronger collaborative relationships to resolve this issue. Skill development programs focused on English language proficiency and digital literacy, alongside trade-specific skills, continue to grow mainly in manufacturing areas.

Investments in transportation and logistics infrastructure development show increasing momentum. Infrastructure projects that include road modernization, together with port expansions in Puerto Cortés and enhanced customs facilities at border crossings, aim to boost supply chain efficiency. Investments in Honduras help preserve its status as a business-friendly country in Central America.

The Road Ahead: Consolidating Gains

Honduras needs to sustain its current progress to maintain its long-term competitive edge. Experts point out that consistent public policy, together with enhanced investor protections and transparent governance practices, are fundamental to maintaining the achievements recognized in the Global Business Complexity Index.

The country has the chance to establish itself as Central America’s most business-friendly nation, but reaching this goal needs ongoing political dedication and multisectoral cooperation with definite reform commitments. Honduras can draw increased investment and create jobs while establishing a foundation for inclusive and sustainable economic development by tackling the report’s detailed challenges and opportunities.

As the largest economy in Central America, Guatemala is developing into a vital regional hub for manufacturing and logistics due to its strategic location combined with its affordable labor market and growing industrial park network. Industrial parks in Guatemala provide essential market entry points for both foreign and domestic firms looking to reach North and South American markets through trade agreements such as the DR-CAFTA and the Central America–European Union Association Agreement.

This blog post delivers an exhaustive examination of the leading industrial parks in Guatemala while examining infrastructure elements, labor force attributes, regulatory benefits, and operational expenses.

Key Industrial Parks in Guatemala

Zona Libre de Industria y Comercio “Santo Tomás de Castilla” (ZOLIC) functions as an International Free Zone.

The International Free Zone (ZOLIC) stands as one of Guatemala’s leading free trade zones, situated in Puerto Barrios Izabal, with unmatched Atlantic coast maritime connections. The Santo Tomás de Castilla port serves as Guatemala’s main Caribbean gateway, located next to ZOLIC. The location of ZOLIC provides strategic advantages for companies that operate within the North American market, because of its proximity to both the United States and Mexico. ZOLIC provides businesses with tax and customs exemptions that last up to 25 years, while supporting industries such as agro-processing, textiles, pharmaceuticals, and electronics assembly. The combination of container yards with warehousing facilities and customs clearance services positions it as an ideal choice for manufacturing companies that focus on exports.

Zona Libre Quetzal (ZLQ)

ZLQ represents a newly developed free zone located near Puerto Quetzal on the coast of Guatemala’s Pacific coast, which provides direct access to shipping routes connecting with both Asia and North America. The facility specializes in export manufacturing and managing large-scale logistics operations. Port-adjacent warehousing, together with tax incentives and expedited customs processes provide ZLQ with significant operational advantages. This industrial park in Guatemala offers modern facilities such as controlled-access entry systems, backup power solutions, and an internal road network, which appeals to businesses in the automotive, agriculture, and electronics industries.

Michatoya Pacífico Industrial Park

Michatoya Pacífico stands as one of the leading industrial parks in Guatemala that combines modern facilities with sustainable practices while operating in Escuintla, which sits 45 minutes away from Guatemala City. Its strategic position close to Pacific ports, including Puerto Quetzal, and its strong highway connections to Guatemala City and El Salvador enhance its accessibility. Michatoya Pacífico serves as a hub for advanced manufacturing operations alongside logistics solutions. The site incorporates electrical substations for power distribution, along with water treatment facilities and fiber-optic telecommunication systems. Tenants from multinational corporations can access long-term leasing options as well as customized build-to-suit facilities. This industrial park in Guatemala encourages cluster formation in the apparel sector alongside food and beverage, as well as the plastics industries.

Parque Industrial Las Tunas

Founded near Amatitlán, Las Tunas serves as an essential industrial park for businesses that need manufacturing sites near Guatemala City while keeping logistics costs manageable. Tenants experience advantages through major highway connections, proximity to La Aurora International Airport in Guatemala City, and the availability of skilled labor forces. The industrial park serves packaging, food processing, and electronics industries and offers customizable spaces with flexible leasing options.

Parque Industrial Escuintla

Companies choose this park for logistics and light manufacturing operations because it lies along the CA-9 highway, which serves as a major commercial link between the capital city and Puerto Quetzal. Multiple international logistics firms and third-party manufacturing companies have their operations based in this industrial park. The industrial park excels in providing reliable energy sources and maintaining strong security measures on its premises.

Parque Industrial El Naranjo

The Parque Industrial El Naranjo, located in Mixco near Guatemala City, serves as an optimal location for last-mile distribution operations and urban industrial activities. Food distributors as well as consumer goods businesses and e-commerce logistic providers have chosen this location for their operations. Through high-speed fiber optic networks and round-the-clock operations this facility supports businesses that need quick response times.

Synergy Industrial Park

Synergy Industrial Park stands as one of Guatemala’s most integrated industrial parks, located in Palín, Escuintla, and designed to serve regional and global manufacturing companies. This location benefits from direct access to CA-9 and CA-2 highways while being 40 minutes from Puerto Quetzal and 45 minutes from Guatemala City. The park demonstrates its commitment to environmental sustainability through its wastewater treatment facilities and systems for capturing rainwater and generating renewable energy. Synergy serves as a home for businesses from textiles to plastics to food manufacturing while expanding its mix of tenants, which now features multinational corporations alongside logistics firms.

Puerta del Istmo

Puerta del Istmo functions as a vital industrial center for distribution-focused companies in Central America, while located close to the Honduran border in Zacapa. Regional logistics operations and light manufacturing activities, along with packaging operations, find this park to be an ideal location. The park provides duty-free benefits through Guatemala’s free zone regulations and attracts businesses that want to utilize their location near Honduras and El Salvador. Zona del Istmo boasts infrastructure that encompasses customs facilities along with warehousing options and expandable spaces designed for manufacturing and exporting goods.

Eight industrial parks in Guatemala showcase the country’s ability to establish specialized industrial zones, which provide tailored facilities for diverse manufacturing and logistics industries.

Access to Markets, Suppliers, and Infrastructure

Guatemala’s most advanced industrial parks utilize their connections to major seaports Puerto Quetzal and Santo Tomás de Castilla, as well as their proximity to La Aurora International Airport, which serves as the primary air cargo hub. Critical connections to Mexico and El Salvador are provided by the CA-1 and CA-9 highways. The fiber optic internet infrastructure in Guatemala ranks among the most developed in the region, while its electrical grid benefits from strengthened capacity due to new hydroelectric and renewable energy additions offering sustainable, competitive power options. Energy costs continue to change depending on the location and type of contract. The water and waste treatment systems across parks differ, and newer ones such as Michatoya Pacífico, Synergy, and Zona Libre Quetzal deliver modern utilities and sustainable functions, including water recycling and solar power generation.

Labor Market: Availability, Cost, and Regulation

A majority of Guatemala’s population belongs to the younger generation since 70% of its citizens are under 30 years old. The sectors of manufacturing and services dominate formal employment rates, with the highest concentration found in Guatemala City, Escuintla, and Zacapa regions. Manufacturing workers in Guatemala earn between $350 and $550 monthly based on their skill level and work site, which positions this country as a top cost-effective labor destination in Latin America. The Guatemalan Labor Code requires employers to follow an eight-hour workday and a 48-hour workweek while mandating contributions to social security and severance funds. Present union activity in the private manufacturing sector remains low, creating a stable labor environment for foreign investors. Public and private institutions offer training programs, including INTECAP, which delivers vocational and technical education based on industrial employers’ requirements.

Regulatory and Fiscal Environment

The government provides powerful financial incentives to companies located in free trade zones in Guatemala with exemptions from income tax and VAT, plus import/export duties for a maximum of 25 years. The main parks where these incentives can be accessed include ZOLIC, Zona Libre Quetzal, and Zona del Istmo. The nation benefits from duty-free entry into major global markets through its participation in regional and international trade agreements. The regulation landscape shows moderate streamlining, but municipal bureaucracy still stands as a significant issue. Major industrial parks throughout Guatemala provide full-service solutions and assistance to simplify new business establishment and regulatory adherence. The Ministry of Environment and Natural Resources (MARN), at the national level, primarily enforces environmental regulations with major efforts aimed at emissions control, together with wastewater management and solid waste disposal. Modern industrial parks follow international environmental standards, which helps simplify the permitting process and operational management.

Real Estate and Operating Costs

The expenses for leasing industrial spaces in Guatemala show large differences based on both the location and the infrastructure quality. The typical industrial lease rates in Guatemala City and Escuintla fall between $4 and $6 per square meter each month. Build-to-suit facilities located at modern industrial parks like Michatoya Pacífico or Synergy Industrial Park typically require higher lease payments. The construction cost per square meter for buildings in industrial parks in Guatemala generally falls between $450 and $650, based on specific project requirements. The costs for facility operations, including waste disposal management and private security services, remain competitively priced. Guatemala’s industrial parks tackle security concerns by providing round-the-clock surveillance, along with access control and regular internal patrols. Licensed private contractors manage waste according to regulations, and industrial parks frequently have their own treatment facilities on location. Utility charges for electricity and water usage depend on consumption levels and industrial rates, but high-volume users and sustainable practice adopters receive discounts in certain industrial parks in Guatemala.

Logistics and Freight Costs

Within its geographic area, Guatemala maintains competitive logistics costs. Transportation costs for containers travelling overland to ports such as Puerto Quetzal or Santo Tomás de Castilla range between $300 and $500, depending on the distance and transportation method. Transporting a full container load (FCL) to the U.S. East Coast costs $2,000–$2,500 per 40-foot container, while shipping the same container to Asia via the Pacific requires higher expenses due to extended distances and transshipment needs. Customs facilities at ZOLIC and ZLQ parks make export procedures quicker and shorten dwell times. The presence of third-party logistics (3PL) providers along with consolidators and freight forwarders in Guatemalan industrial parks helps reduce coordination expenses and bolsters supply chain dependability.

Tenant Mix and Cluster Potential

Major industrial parks in Guatemala accommodate multinational companies, along with regional firms operating in apparel manufacturing, as well as food processing, electronics, and plastic production, together with automotive parts manufacturing sectors. Michatoya Pacífico serves apparel manufacturing companies along with logistics service providers, whereas Synergy Industrial Park accommodates enterprises in the food production and plastic packaging industries. ZOLIC extends its support to multiple industries, which include both pharmaceutical companies and agro-industry exporters. Automotive and electronics firms show interest in Zona Libre Quetzal and Zona del Istmo because these zones promote the formation of new industrial clusters. The industrial parks in Guatemala provide businesses with networking advantages and service synergies, together with access to training options and shared infrastructure facilities, which promote enduring competitiveness and business stability. Global company partnerships demonstrate Guatemala’s ascent as a leading manufacturing site in Central America.

Manufacturing expansion in the Dominican Republic is driven by tax incentives, together with strategic location advantages and access to skilled labor.

The combination of increasing U.S. tariff barriers and global supply chain disruptions has driven many businesses to move their manufacturing operations from Asia to the Dominican Republic, a place traditionally recognized for tourism rather than industrial production.

The persistent global supply chain disruptions and geopolitical conflicts have led companies based in the United States and around the world to view the island nation as both a practical and sometimes better choice. This represents a significant change for a nation that had not previously been a part of discussions regarding competitive global manufacturing. Today, however, the Dominican Republic is making the case for its role as a Caribbean industrial hub.

Tariff Disruptions Spur Urgency for Nearshoring

The transformation started when former U.S. President Donald Trump raised tariffs. Manufacturing sectors that depended on NAFTA nations for affordable production experienced significant disruptions from these policy alterations.

World Emblem, which holds the title of the world’s biggest custom patch supplier for uniforms and equipment, became one of the most affected companies by policy changes. CEO Randy Carr discovered an overlooked solution in the Dominican Republic after tariffs forced him to quickly find alternatives.

Carr revealed in an interview that he was previously unaware that this was even a feasible solution. “Our investigation revealed remarkable advantages that we couldn’t overlook.”

Free Trade Zones: The Engine Behind the Island’s Industrial Growth

The Dominican Republic attracts interest because it offers both close geographical proximity to the United States and extensive free trade zones. Under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), 92 zones currently support more than 850 companies while providing zero income tax and duty-free access to U.S. markets.

The island holds a significant logistical advantage. Shipping containers from the location arrive in Miami within three days and reach New York within five days, unlike the four-week duration required from Asia. Workers in this area produce high-quality work at productivity levels similar to those in Mexico, but labor costs remain 30% lower.

Industrial activity in the Caribbean is rapidly flourishing in the Dominican Republic because of its efficiency benefits, along with cost-saving opportunities and resilient supply chain capabilities. These advantages are collectively positioning the country as a true Caribbean industrial hub.

Strategic Investments by Major Multinationals

Multiple companies share World Emblem’s assessment of the Dominican Republic’s potential. The country has seen expansion from major global brands including Hanes, Timberland, Cardinal Health, Eaton Corporation, and Rockwell Automation.

The Dominican Republic secured 41% of Central America’s foreign direct investment (FDI), according to the United Nations Conference on Trade and Development (UNCTAD), while manufacturing developed as the region’s second-largest sector following tourism.

This surge in investment underscores the country’s shift into a new phase of development, establishing itself not only as a travel destination but as a Caribbean industrial hub that garners interest from investors, governments, and trade organizations alike.

The country provides a skilled workforce ready for training that shows potential for growth. The current population stands at just over 11 million people, but the labor force reaches 5.41 million workers. The government understands the necessity of human capital investments to maintain industrial growth. Technical schools that provide industry-specific training programs are being constructed within the free trade zones.

Marino Auffant from Auffant Global Advisory revealed that this approach contributes to the nation’s industrial success. The manufacturing process becomes an educational platform that equips companies with skilled workers while preparing young people for employment.

However, challenges remain. Industrial park expansion faces limitations due to the country’s constrained land area, which is only slightly larger than South Carolina. This challenge is particularly acute in important border areas such as the one with Haiti. The lack of sufficient engineers and technical specialists may prevent future large-scale industrial development.

Still, Auffant remains optimistic: “We need more space and talent, yes. The country has both political support and the necessary infrastructure ready for development. And we’re building fast.” 

Legal Security and a Business-Friendly Climate

Foreign investors praise the Dominican Republic’s legal and regulatory system because it provides stability in a region that is typically unpredictable. Tax incentives receive strong backing from legislation, which ensures investors can depend on them for their long-term planning goals.

The World Bank’s Ease of Doing Business indicators show that the Dominican Republic outperforms its Caribbean neighbors. Foreign investors have the ability to send profits back to their home countries while maintaining full business ownership and benefit from trade arbitration systems aligned with global standards.

Legal security provides essential support for the island’s ambition to be a Caribbean industrial hub, allowing companies to pursue long-term investments without concerns about unexpected legal changes.

Infrastructure and Connectivity Support Expansion

Recent years have seen the Dominican Republic make substantial investments in logistics infrastructure, which improved ports, airports, and highways to boost export efficiency. Haina, Caucedo, and Puerto Plata stand as the top-performing ports in the Caribbean because they provide direct shipping routes to the United States, Europe, and Latin America.

Five international airports provide strong connectivity for both freight operations and executive travel needs. The telecom and internet infrastructure has made substantial advancements, which support smart factory operations and remote monitoring for international businesses.

The combination of tax breaks, connectivity, and skilled labor further strengthens the country’s position as a Caribbean industrial hub capable of serving global markets efficiently.

Global Visibility Remains a Challenge

In spite of its significant benefits, the Dominican Republic remains unable to achieve global visibility within the manufacturing industry. Circumstances drive executives like Randy Carr to explore the island’s potential when traditional manufacturing destinations such as China and Mexico no longer suffice.

“There’s a marketing gap,” Auffant acknowledged. The nation must improve its narrative presentation to the world. The country demonstrates strong achievements in the textile and medical device sectors, although this information remains largely unknown to others.

ProDominicana, together with the National Council of Free Zones (CNZFE), has intensified their marketing activities by taking part in global trade expos and setting up overseas investment offices. The Dominican Republic requires additional efforts to become a primary option during site selection evaluations and fulfill its role as a leading Caribbean industrial hub.

Future Outlook: From Outsider to Industrial Player

The Dominican Republic is expanding its position as a Caribbean industrial hub thanks to supportive economic policies, a skilled workforce, and increasing foreign investments. The country needs to overcome critical barriers, such as expanding industrial real estate and enhancing vocational training, while improving visibility to corporate leaders to maximize its business potential.

Still, the momentum is real. With nearshoring emerging as a global standard and businesses aiming to manage supply chain risk through geographic diversification, the Dominican Republic presents an attractive value proposition.

An emergency tariff response has now transformed into a long-term strategic plan. For World Emblem and numerous other businesses, the Dominican Republic has transformed from an optional contingency into a leading edge for industrial achievement.

The nation of Uruguay, which has earned recognition for its stable political environment, robust institutions, and favorable investment conditions, now stands at a crossroads between domestic sovereignty and worldwide economic changes. The global shift toward standardized corporate tax regulations has made Uruguay and the Global Minimum Tax central topics of fiscal policy discussions in the Latin American country.

The Organisation for Economic Cooperation and Development (OECD) championed global minimum tax implementation, which received G20 endorsement, creating opportunities and challenges for Uruguay. The policy establishes a 15% minimum tax rate for major multinational enterprises to counter base erosion and profit shifting while making sure these companies pay equitable taxes regardless of their operational locations.

Because Uruguay’s foreign investment strategy depends heavily on tax incentives and investment promotion policies, its position is highly vulnerable. A small open economy must work hard to maintain global compliance standards while staying competitive. Therefore, understanding the relationship between Uruguay and the Global Minimum Tax becomes critical for shaping the country’s fiscal future.

Understanding the Global Minimum Tax Framework

The international minimum tax framework was developed as a response to corporate tax base erosion from multinational companies moving profits to low-tax locations. The OECD’s two-pillar solution received approval from more than 130 countries, including Uruguay, when it was agreed upon in October 2021.

Under Pillar One’s framework, markets where consumers reside gain taxing rights over companies that lack physical presence in those markets.

Pillar Two establishes a worldwide minimum tax rate of 15% that affects Uruguay by targeting corporations with consolidated revenues above €750 million.

The proposed policy aims to ensure equitable taxation while stopping countries from lowering their corporate tax rates to attract businesses. Uruguay and the Global Minimum Tax intersect at this point, as the nation must modify its domestic tax laws to prevent international tax claims from companies’ home countries from taking precedence.

The Role of the QDMTT: Uruguay’s Main Tool for Compliance

The Qualified Domestic Minimum Top-Up Tax (QDMTT) stands at the center of the discussion about Uruguay and the Global Minimum Tax, because it allows jurisdictions to claim the gap between their corporate tax rate and the minimum global tax rate.

If a multinational corporation pays less than 15% tax in Uruguay without a QDMTT, the company’s home country gains the right to claim the tax difference. Uruguay’s tax base suffers erosion, and its fiscal sovereignty faces undermining because of this situation.

Javier Metre of CPA Ferrere considers the QDMTT fundamental to Uruguay’s tax system. He explained that Uruguay could collect tax differences that would otherwise migrate to other countries by adopting this tax. He emphasized that implementing the measure needs to be done intelligently and carefully to maintain investor interest in Uruguay.

Revenue Losses and Urgency

Economic Research Center’s Gustavo Viñales alerts that Uruguay suffers from tax revenue losses because of delays in implementing QDMTT. Multinational companies operating in Uruguay continue to face the global minimum tax obligation, but due to the lack of a domestic system, they frequently fulfill their tax payments in different jurisdictions.

Viñales suggests immediate implementation of the QDMTT to stop additional tax leakage. The proposed mechanism enables Uruguay to impose taxes on selected corporations while keeping corporate income tax rates unchanged for all other businesses. This approach targets the effects on large multinational enterprises (MNEs) while protecting small businesses and maintaining stability in the investment climate.

Government’s Strategic Response: A Balancing Act

The Uruguayan government acknowledges that the current situation demands serious attention. During a recent Center for Economic Research (Cinve) gathering at Montevideo’s Legislative Palace, Minister of Economy and Finance Gabriel Oddone admitted that Uruguay and the Global Minimum Tax have become permanently connected.

The Uruguayan government must take an “active role” in the international tax landscape while preserving its unique economic structure, according to Oddone. He described the situation as both a “challenge” and an “opportunity” to bring the nation’s investment attraction instruments into the modern era.

Oddone mentioned that the upcoming five-year budget law intends to reform tax incentives and investment promotion programs so they can align with the evolving international standards. He emphasized that success depends on determining how these tools can be used in the new economic environment.

Why Multinationals Want Compliance

The global minimum tax discourse regarding Uruguay features an important yet often overlooked aspect: multiple multinational corporations active in Uruguay show a preference to meet international regulations.

Multinational firms based in nations with high tax transparency requirements confront international norm alignment pressures. Oddone observed multiple corporations have shown preference for a domestic system that enables them to fulfill international responsibilities without using offshore entities.

Through the QDMTT, Uruguay and the Global Minimum Tax framework create a transparent and compliant system that enhances Uruguay’s status as an accountable and progressive jurisdiction. Investment strategies with an environmental, social, and governance (ESG) focus now prioritize this particular trait.

Risks to Incentive Regimes

Álvaro Romano, Director of the Tax Advisory Office at the Ministry of Economy and Finance, provided a more sobering view. He emphasized that developing nations such as Uruguay would not benefit from the current circumstances. The global tax reform directly targets the fiscal mechanisms that countries such as Uruguay have utilized to achieve competitive advantages, including special tax regimes, free trade zones, and investment exemptions.

Romano predicted that these regimes would face unavoidable effects and emphasized that strategic adjustments must be implemented to reduce adverse outcomes. The assessment requires determining which incentives will compete effectively within the new framework and which incentives need redesigning or elimination.

Regional Context: Uruguay’s Position in Latin America

Uruguay stands out in Latin America because of its transparent legal system, low corruption, and a strong legal framework. The country’s strengths enable it to draw high-quality foreign direct investment (FDI) beyond what its size would normally attract.

Geographic remoteness and a small market size have traditionally been structural barriers for Uruguay, which generous tax benefits have served to offset. The implementation of the global minimum tax threatens to disrupt Uruguay’s current equilibrium.

Uruguay and the Global Minimum Tax challenge the country to evolve its investment narrative. The domestic market size of Uruguay does not serve as an investment draw because it remains much smaller than neighboring countries like Brazil, Argentina, and Mexico. The country’s value proposition needs to shift toward highlighting institutional quality alongside political stability and workforce skills.

Potential Opportunities Amid the Challenge

The implementation of the global minimum tax brings disruption, but gives Uruguay a chance to establish sustainable competitive advantages.

• Regulatory Predictability: By presenting itself as a stable nation governed by rules, Uruguay can stand out from the region’s typical unpredictability.
• Sustainability and ESG: The rising demand for ESG-compliant investment strategies will likely increase the value of Uruguay’s clean energy infrastructure and democratic governance beyond its current low tax rate benefits.
• Human Capital: Investment in education, along with digital infrastructure development, could establish Uruguay as a center for innovative activities and premium service offerings.

Through alignment with global tax standards and enhancement of its non-tax competitive strengths, Uruguay and the Global Minimum Tax dynamic offer not just survival, but the opportunity for transformation into a stronger, more resilient economy.

Conclusion: The Road Ahead

Global fiscal policy trends and national priorities have converged to position Uruguay and the Global Minimum Tax at a crucial decision point. Implementing the QDMTT represents Uruguay’s most direct and practical approach to maintaining tax revenue while meeting global commitments.

However, the journey doesn’t end with compliance. Uruguay needs to redesign its investment attraction approach by transitioning from tax incentives to a comprehensive value proposition that highlights institutional quality as well as innovation and sustainability.

Through strategic planning and innovative financial practices, Uruguay and the Global Minimum Tax alignment can serve as a launchpad for the country to preserve its attractiveness and competitiveness within the evolving landscape of worldwide tax collaboration. The country must take deliberate yet careful steps to assert its position in the ever-changing international financial system.