Peru is positioning itself as one of Latin America’s most dynamic and promising economies in 2025. With a projected GDP growth of up to 4%, the country demonstrates resilience and adaptability in the face of global economic uncertainty. This projected expansion is driven by increased foreign investment, robust domestic demand, the expansion of key sectors, and a suite of reforms aimed at improving competitiveness and economic freedom. As a result, economic growth in Peru in 2025 is expected to create a favorable environment for both emerging startups and large-scale industrial ventures.

Luis Fuentes, director of Grupo Fuentes and Alligare Internacional, highlights the positive transformation of the business environment in Peru:

“The Peruvian business ecosystem is evolving rapidly. Companies that understand the new market dynamics and adapt quickly are making a difference. The country is making strategic decisions to position itself as a regional business hub. The opportunities exist for those who know how to identify them and act with vision.”

Sectors with High Growth Potential

According to Fuentes, Peru presents significant investment and expansion opportunities across a wide variety of economic sectors, many of which are crucial to driving sustained national development:

Infrastructure and Logistics:

One of the cornerstones of economic growth in Peru in 2025 is the modernization of its infrastructure. The Chancay megaport, backed by significant Chinese investment, is a flagship project poised to transform the nation’s logistics network. Once operational, this deepwater port will dramatically cut shipping times between South America and Asia, making Peru a vital gateway for international trade. Improvements in roads, railways, and airport logistics are also helping connect Peru’s remote regions to global markets.

Energy and Mining:

Peru continues to build its reputation as a global mining powerhouse, with a mining investment portfolio exceeding $ 50 billion. As one of the world’s top producers of copper, gold, and silver, the country is also focusing on the environmental sustainability of its extractive industries. Efforts include tighter environmental regulations, promoting community engagement, and a growing interest in clean energy investments, such as solar and wind. These initiatives support the dual objectives of resource development and environmental stewardship.

Technology and Digital Services:

Digital transformation is another key driver of economic growth in Peru in 2025. The rapid adoption of mobile technologies, cloud computing, and digital platforms is fueling a new wave of tech startups. These young enterprises deliver innovative solutions tailored to Peru’s evolving consumer base in education technology (EdTech), telemedicine, fintech, e-commerce, and streaming services. Government support for digital entrepreneurship and the growing availability of venture capital are accelerating this trend.

Automotive Industry and Manufacturing:

The Peruvian government is negotiating with international electric vehicle (EV) manufacturers to establish production facilities in designated industrial zones. These initiatives could significantly alter the country’s industrial profile, creating skilled jobs and reducing reliance on fossil fuels. Enhanced manufacturing capabilities, supported by tax incentives and special economic zones, further strengthen Peru’s appeal as a production hub in South America.

Reforms and a Favorable Business Climate

Behind these sectoral advancements lies a broader commitment to reform. Over the past few years, the Peruvian government has implemented over 400 deregulation measures across 13 critical economic sectors. These actions have reduced red tape, eliminated bureaucratic hurdles, and streamlined business registration and operation procedures. This regulatory overhaul is complemented by macroeconomic stability, low inflation rates, and prudent fiscal management—pillars that underpin economic growth in Peru in 2025.

Moreover, Peru’s vast network of trade agreements—with economic powerhouses such as the United States, China, Canada, Japan, and the European Union—has positioned the country as a strategic trade hub. These agreements lower tariffs, increase export potential and incentivize foreign firms to establish regional operations in Peru.

Outlook and Regional Opportunities

While Lima remains the epicenter of economic activity, a significant trend toward regional decentralization is unfolding. Secondary cities such as Arequipa, Piura, Trujillo, and Cusco are experiencing rising investment inflows. These cities are developing as industrial, agro-export, and technology hubs, benefiting from improved infrastructure, regional tax breaks, and lower operational costs. This shift will contribute to Peru’s more balanced and inclusive economic growth model in 2025.

In particular, the agro-industrial sector is seeing increased interest thanks to Peru’s rich biodiversity, favorable climate zones, and strategic export locations. The rise of agrotechnology—leveraging data, automation, and climate resilience—enables higher yields and access to international markets. Likewise, the fintech sector is growing rapidly, supported by a young, digitally native population eager for accessible financial services.

Sustainable tourism is another area experiencing renewed momentum. With destinations like Machu Picchu, the Sacred Valley, and the Amazon rainforest, Peru invests in responsible tourism that balances economic gain with ecological protection. Government and private sector actors work together to develop eco-friendly lodges, community-based tourism models, and sustainable travel infrastructure.

Consumer Trends and Investment Climate

The modern Peruvian consumer is more connected, demanding, and aware of environmental and social issues than ever before. This transformation is compelling companies to rethink their business models. Sustainability, transparency, digital accessibility, and personalized services are no longer optional—they are expected. This evolution presents ample room for new entrants that can offer differentiated, impact-driven solutions.

While investor caution persists due to past political instability, recent efforts to improve institutional transparency and enforce regulatory consistency are improving business confidence. The current political climate, although not without its challenges, has shown signs of stability, offering a more predictable environment for domestic and international investors alike.

Luis Fuentes concludes,

“This information is available on our platform, perubizconnect.com, where you can learn more about these trends and other insights related to the Peruvian market, taxation, legal matters, and business. The outlook encourages those with the vision and strategy to engage with this market.”

As the country continues investing in sustainable development, digital transformation, and export-oriented growth, Peru’s economic growth in 2025 will likely surpass expectations. Businesses that enter now with an understanding of local dynamics and a long-term perspective stand to gain significantly from one of the region’s most vibrant and future-ready economies.

Companies continuously seek efficient, cost-effective solutions to maintain their competitive edge in a world driven by digital transformation and global competition. One such solution is business process outsourcing in Latin America, which has become increasingly popular due to the region’s cost advantages, skilled labor force, and growing technological infrastructure. With proximity to North America, cultural alignment, and rising government support, Latin America offers an array of destinations where companies can outsource key business processes, from customer service to IT support, finance, and HR operations.

This blog explores Latin America’s most promising countries and cities for business process outsourcing based on critical factors such as labor costs, workforce quality, infrastructure, time zone compatibility, and legal frameworks.

Colombia: A Rising Star with Strong Government Support

Key Cities: Bogotá, Medellín, Barranquilla

Colombia has become a top contender for business process outsourcing in Latin America, especially in customer service, IT support, and back-office operations. Medellín, once known for its turbulent history, has transformed into a hub for innovation and digital services. Bogotá and Barranquilla also offer vast talent pools and competitive costs.

• Labor Cost: Moderate, with competitive wages and high quality of service.
• Workforce Quality: Colombia boasts over 500,000 university graduates annually, many of whom are bilingual.
• Infrastructure: Modern office parks and expanding broadband penetration.
• Time Zone: Same or close to Eastern Standard Time, making communication seamless.
• Incentives: Free trade zones and tax benefits for tech and BPO companies.
• Security & Data Protection: Colombia has enacted laws aligned with international standards.

With a strong push from ProColombia and municipal governments, Colombia’s position as a preferred destination for business process outsourcing in Latin America continues to solidify.

Mexico: North America’s Nearshore Powerhouse

Key Cities: Mexico City, Guadalajara, Monterrey, Tijuana

Mexico’s geographical proximity to the U.S., cultural similarities, and large bilingual workforce make it one of Latin America’s best countries for business process outsourcing. Guadalajara is Mexico’s Silicon Valley, while Monterrey and Tijuana offer strategic access to U.S. markets.

• Labor Cost: Higher than some Central American countries, but still cost-effective compared to the U.S. and Canada.
• Workforce Availability: A strong pool of bilingual talent in IT, customer service, and finance.
• Infrastructure: Extensive fiber-optic networks, tech parks, and co-working spaces.
• Time Zone: Shares several time zones with the U.S., ideal for real-time collaboration.
• Business Environment: NAFTA/USMCA provides regulatory stability.
• Track Record: Home to major BPO providers like Teleperformance, Conduent, and Atento.

Mexico’s consistency in providing high-quality services and diversified economy makes it a reliable hub for business process outsourcing in Latin America.

Costa Rica: The Premium Outsourcing Destination

Key Cities: San José, Heredia, Alajuela

While Costa Rica has relatively higher operating costs, it compensates with a stable business environment, high English proficiency, and a reputation for quality.

• Labor Cost: On the higher end, but justified by workforce efficiency and language skills.
• Workforce Quality: A highly educated population with strong English capabilities.
• Infrastructure: Tech parks like Global Park and America Free Zone provide plug-and-play solutions.
• Government Support: Procomer and CINDE (Costa Rican Investment Promotion Agency) and provides assistance and incentives.
• Security & Legal Framework: Ranked high in political and economic stability.

Costa Rica is especially attractive to U.S. companies seeking business process outsourcing in Latin America without sacrificing quality or security standards.

Argentina: Talent-Rich and Technologically Sophisticated

Key Cities: Buenos Aires, Córdoba, Rosario

Argentina is renowned for its highly educated workforce and strong IT services sector. It has a growing reputation for software development, digital marketing, and financial outsourcing.

• Labor Cost: Relatively low due to currency fluctuations.
• Talent Availability: Argentina has one of Latin America’s highest literacy and education levels.
• Technology Ecosystem: Buenos Aires is a recognized tech hub with vigorous startup activity.
• Time Zone: Similar to U.S. Eastern Time.
• Legal & Economic Environment: While there are challenges with economic volatility, the quality of services remains high.

Companies focused on tech-driven solutions often turn to Argentina for business process outsourcing in Latin America, especially in niche areas like fintech and app development.

Chile: A Stable and Business-Friendly Option

Key Cities: Santiago, Valparaíso

Chile is known for its strong institutions, legal transparency, and ease of doing business. It is especially well-suited for high-end outsourcing services, including legal process outsourcing (LPO) and IT support.

• Labor Cost: Moderate to high.
• Infrastructure: Chile has one of the best broadband networks in the region.
• Political Stability: Ranked among the most stable countries in Latin America.
• Language Skills: High English proficiency, especially in Santiago.
• Regulatory Framework: Transparent laws and protection for foreign investors.

Chile’s emphasis on technology and innovation strengthens its case as a premier location for business process outsourcing in Latin America.

Uruguay: Small but Mighty

Key Cities: Montevideo

Uruguay may be small in population, but it punches above its weight regarding digital capabilities and governance. It is a leader in data privacy and technology adoption.

• Workforce Quality: Strong focus on STEM education and English fluency.
• Cost of Doing Business: Higher than average, but with added service quality and reliability value.
• Legal Framework: One of the most progressive regarding data protection.
• Track Record: Companies like Tata Consultancy Services and Mercado Libre have long-term operations here.

Uruguay offers one of Latin America’s safest, most reliable platforms for business process outsourcing.

Dominican Republic: The Caribbean’s BPO Leader

Key Cities: Santo Domingo, Santiago

With a large English-speaking population and proximity to the U.S., the Dominican Republic has built a robust BPO industry in recent years.

• Labor Cost: Low to moderate.
• Workforce: More than 30,000 people are employed in call centers alone.
• Incentives: Free trade zones and tax breaks.
• Infrastructure: Growing investment in telecom and business parks.
• Industry Presence: A large number of contact centers and back-office providers.

The Dominican Republic is a top choice for companies seeking cost-efficient business process outsourcing in Latin America with minimal language barriers.

Guatemala and El Salvador: Competitive and Growing

Key Cities: Guatemala City, San Salvador

These Central American countries offer low labor costs and increasing foreign direct investment in the BPO sector.

• Labor Cost: Among the lowest in the region.
• Time Zone Alignment: Same as U.S. Central Time.
• Cultural Compatibility: Close affinity with U.S. work culture.
• Incentives: Government policies aimed at encouraging IT and BPO growth.

While there are concerns about political stability, many companies have successfully operated in Guatemala and El Salvador for over a decade, contributing to the momentum behind business process outsourcing in Latin America.

Key Factors Driving Site Selection

When choosing the correct location for business process outsourcing in Latin America, companies must weigh several strategic variables:

• Labor Cost vs. Service Quality: Costa Rica and Chile offer high service quality but at a premium, whereas El Salvador and Guatemala are highly affordable.
• Time Zone and Communication: Countries like Mexico, Colombia, and Central American nations offer strong time zone alignment with North America.
• Infrastructure and Connectivity: Uruguay, Chile, and Costa Rica are front-runners in digital infrastructure.
• Regulatory Framework: Countries like Uruguay and Chile lead in data protection and investor-friendly laws.
• Government Support and Incentives: ProColombia, CINDE (Costa Rica), ProDominicana, and Invest in Guatemala actively attract BPO investment with incentives and logistical help.

Conclusion: Choosing the Right Destination for Long-Term Success

Latin America’s business process outsourcing landscape is as diverse as the region. Mexico remains a leader in nearshoring due to its proximity and scale, while Colombia is quickly ascending as a digital outsourcing powerhouse. Costa Rica is the premium destination for high-end services, while countries like Argentina and Chile attract niche operations in tech and finance.

Central America and the Dominican Republic provide strong returns for companies prioritizing cost, while Uruguay offers exceptional stability and data security. With each location offering its unique blend of benefits, the key lies in aligning your business goals with the right environment.

In today’s global economy, business process outsourcing in Latin America isn’t just a cost-saving strategy—it’s a growth strategy. By selecting the correct country and city, businesses can tap into a thriving ecosystem that supports innovation, scalability, and operational excellence.

Whether you’re a startup looking to scale operations or a multinational corporation seeking efficiency, business process outsourcing in Latin America offers a path to sustained competitive advantage.

Long-Term Business Outlook Drives Continued Interest

Companies from the Netherlands continue to view Mexico as a strategic destination for international expansion. Despite ongoing global economic shifts and the uncertainty triggered by U.S. tariff policies, Dutch investment in Mexico is gaining momentum. According to Steven Büter, representative of the Netherlands Business Support Office (NBSO) at the Dutch Embassy in Mexico, Dutch companies are drawn to the country not for short-term gains but for long-term operational plans that span decades.

“There is a solid long-term vision behind these investments,” Büter explained. “Even in the face of short-term challenges, Dutch businesses are planning for the next 30 to 40 years, not just for the next U.S. administration or policy cycle.”

Ten Projects Underway Across Strategic Regions

The NBSO currently tracks at least ten Dutch investment projects in various stages of development. These initiatives are being launched in strategically important Mexican states, including Querétaro, Jalisco, and Nuevo León. These regions have become magnets for foreign investment thanks to their robust industrial ecosystems, well-developed infrastructure, and skilled labor pools.

Specifically in Querétaro, two manufacturing-related investments are underway. One company from the Netherlands is entering the automotive sector, while another will produce television stands. “We’re working on about 10 projects for Mexico and about two or three for Querétaro, which are almost finalized—they are going to happen,” said Büter, highlighting the growing confidence in the local business climate.

Job Creation and Capital Inflows

These new investments will have a significant economic impact at the local level. Bueter estimates that the two projects in Querétaro alone will result in an influx of €30 to €40 million and create between 300 and 400 jobs. One of these ventures is already in the installation phase, while the other is set to commence operations within the month.

Dutch investment in Mexico brings capital, technology, innovation, and best practices in sustainable and efficient manufacturing. These advantages enhance Mexico’s position as a preferred destination for nearshoring and foreign direct investment.

Expanding Beyond Manufacturing: Interest in Agriculture

While the manufacturing sector remains a dominant attraction for Dutch investors, there is also rising interest in the agricultural industry, particularly in protected agriculture, such as greenhouse farming and high-tech cultivation systems. Bueter pointed out that Dutch companies involved in greenhouse technology have found a receptive and mature market in Mexico.

“When 50 Dutch companies are coming here, it shows strong interest in Mexico’s agricultural sector,” he said. “For example, if you go to the area in the Netherlands where greenhouses are located, they’re all already here in Mexico, they already have business in Mexico—so it’s a very mature market, and the production market can mature even more. That’s why Dutch companies keep coming.”

This segment of Dutch investment in Mexico is helping to introduce advanced agricultural technologies that improve productivity and reduce environmental impact, aligning with global sustainability goals.

Navigating U.S. Tariff Uncertainty with Long-Term Strategies

The threat of U.S. tariffs, such as the proposed 25% duties on goods from Mexico, has introduced uncertainty into global supply chains. However, Bueter emphasized that these developments do not deter Dutch companies because their investment decisions are made with a long-term perspective.

“It’s challenging to gather all the information about what’s happening,” Bueter said. “We’re trying to bring all the companies together and have conversations to figure out what’s happening. Even so, companies that invest in Mexico don’t do so for just four years—they do so for 30 to 40 years. So, they’re looking at the long-term horizon of the investment, which means the projects continue.”

While higher tariffs could temporarily increase production costs, the structural advantages of producing in Mexico, such as lower operating expenses, trade agreements, and access to regional markets, still outweigh the risks.

Talent Availability: A Critical Asset for Investors

One of the most cited advantages driving Dutch investment in Mexico is the availability of skilled human talent. Mexico offers a young, trained, and competitively priced workforce compared to the United States, where labor shortages in specific sectors have created bottlenecks.

“Obviously, 25% tariffs are significant, but sometimes it’s still easier to produce in Mexico,” Bueter noted. “Especially due to the availability of human talent, which the United States lacks. Even if you can get it cheaply, how can you produce it if it is unavailable?”

This abundance of capable labor makes Mexico an increasingly attractive base for Dutch companies looking to optimize cost and efficiency in their global operations.

Nearshoring Trend Continues to Gain Momentum

The global trend of nearshoring—relocating supply chains closer to consumer markets—continues to benefit Mexico. Dutch firms are taking advantage of Mexico’s proximity to the United States, its network of trade agreements, and its expanding logistics infrastructure.

A recent example is the February 2024 opening of Trouw Nutrition’s facility in Colón, Querétaro. The Dutch company invested 1 billion pesos to produce animal feed in the region. This move illustrates how Dutch investment in Mexico supports the region’s industrial development and food security.

Nuevo León: The Leading Destination for Dutch Capital

Nuevo León is the primary recipient of Dutch investment in Mexico, attracting over USD 5.13 billion between 2006 and 2024. This figure represents 32.2% of Dutch capital inflow into the country. The state’s strong industrial base, skilled workforce, and developed infrastructure make it a preferred destination for international investors.

Following Nuevo León, Quintana Roo ranks second with 11.3% of Dutch investment, followed by Veracruz (9%), the State of Mexico (8.7%), and Mexico City (8.3%). These statistics, provided by Mexico’s Ministry of Economy, underscore the geographical diversity and scale of Dutch investment in Mexico, totaling approximately USD 15.95 billion over the 18-year years.

Ecuador has taken a significant step in its economic development strategy by creating two new free trade zones. These zones, located in Posorja and Pascuales within the coastal province of Guayas, represent a significant policy shift that aims to attract investment, boost employment, and strengthen Ecuador’s role in regional and global trade networks. These developments are part of a broader legislative and regulatory modernization effort intended to make the country more competitive and responsive to the demands of international commerce.

The first of the two free trade zones is managed by ZOFRAPORT S.A., which successfully transitioned from the previous ZEDE (Special Economic Development Zones) regime. The second zone is managed by PASEO TABLADO ZONA FRANCA PTZF S.A., a new player in the field that is taking advantage of the updated framework. These two investments account for a combined private capital injection of USD 10,532,002.71, representing investor confidence in the country’s revised trade and investment policy.

Strategic Importance of Location and Scale

The Posorja and Pascuales free trade zones span over 117 hectares of industrially strategic land in Guayas. The location is critical, especially considering Posorja’s proximity to the DP World Port, which enhances its logistical advantage for exports and imports. These zones are poised to become industrial and commercial hubs with the potential to impact local and national economies.

According to official data, the development of these zones is expected to generate 414 direct jobs in their initial phases. These employment opportunities are significant in the context of Guayas, a province that, despite being the country’s economic engine, faces challenges in employment generation and poverty reduction in its peri-urban and rural zones. The creation of jobs tied to industrial and logistical infrastructure can be a catalyst for more inclusive and sustained growth.

This progress is rooted in the Organic Law on Economic Efficiency and Job Creation, passed in 2023. The law replaced the outdated ZEDE model with a more dynamic, business-friendly free trade zone regime. The new rules, officially published in February 2024 in Official Register No. 496, outline the conditions under which public and private sector actors can establish or transition into free trade zones. The simplified regulatory framework is designed to lower entry barriers for investors and encourage broader participation in economic zones.

Investment Commitments

According to data from the Ministry of Production, ZOFRAPORT committed USD 563,472.71 for its transition to the new framework. Meanwhile, the newly created Paseo Tablado free trade zone in Pascuales has pledged USD 9,968,530 in capital investment. These figures represent the beginning of physical development and a larger vision for positioning free trade zones in Ecuador as magnets for innovation, manufacturing, and logistics.

These zones attract investors because of their special customs and tax regimes. In contrast to other jurisdictions in Latin America, free trade zones in Ecuador do not impose minimum investment thresholds or specific land extension requirements, which means that even medium-sized firms and startups can participate. This flexible approach enhances Ecuador’s competitiveness and makes the zones more accessible to a broader range of domestic and international investors.

Tax Benefits of Free Trade Zones

One of the most compelling advantages of the free trade zones in Ecuador lies in the generous tax incentives provided under the new law. Companies operating within these zones are granted a five-year exemption from income tax, a significant financial benefit during the critical early years of a business’s operation. Following the exemption period, a reduced 15% income tax rate applies for the remaining duration of their license within the zone.

Furthermore, tariffs on imported raw materials, supplies, and capital goods are eliminated. This measure drastically reduces upfront costs and encourages installing high-tech or capital-intensive operations. In addition to these benefits, companies are exempt from the Foreign Currency Exit Tax (ISD), a longstanding concern for multinational firms that must repatriate earnings or move funds across borders.

Other key incentives include VAT refunds on domestic purchases and eliminating income tax on dividends for shareholders. These financial tools collectively lower operational costs and enhance the profitability of businesses within the zones. These conditions are expected to attract new and existing international firms looking for stable, pro-business environments in the region.

Employment and Local Economic Development

The Posorja and Pascuales free trade zones are expected to play a vital role in Ecuador’s broader employment and economic inclusion strategies. The initial estimate of 414 direct job openings is only the beginning. As infrastructure develops and companies begin full operations, the number of indirect jobs created across supply chains, logistics, and supporting services is projected to grow significantly.

These zones also create meaningful opportunities for micro, small, and medium-sized enterprises (MSMEs) to plug into global supply chains. A critical aspect of this is nearshoring, a practice where businesses relocate manufacturing or services closer to target markets. By doing so within free trade zones in Ecuador, MiSMEs can benefit from shared infrastructure, lower logistics costs, and a reduced regulatory burden. This opens up access to international markets that would otherwise be difficult for smaller enterprises to enter.

The zones promote employment and export diversification, especially in high-value sectors. With the proper support, Ecuadorian firms can move up the value chain, offering manufactured goods and specialized services to global buyers. Such diversification is key to shielding the country from fluctuations in commodity markets and ensuring more stable long-term growth.

Legal Framework and Institutional Support

The creation of these zones is grounded in Ecuador’s broader legislative efforts to modernize its economic development framework. The Organic Law on Economic Efficiency, published in Official Register No. 461, is central to this shift. It repeals the older ZEDE model and provides a flexible and transparent structure for establishing and operating free trade zones.

The law’s implementation guidelines, published in early 2024, simplify bureaucratic procedures, especially land designation and investment requirements. This facilitates quicker project implementation and increases investor confidence in the regulatory environment.

The new framework aligns with global best practices by removing outdated constraints and focusing on results-driven incentives. By doing so, Ecuador is signaling to international investors that it is open for business and capable of adapting to a fast-changing global economy.

Internationalization and Global Market Access

Ecuador’s new free trade zones serve a dual purpose: they attract foreign direct investment (FDI) while enabling Ecuadorian companies to access international markets more easily. These zones are vital for advancing the government’s internationalization agenda, which seeks to improve the country’s export profile and reduce dependency on raw commodities.

As mentioned earlier, nearshoring is a critical aspect of this strategy. With global firms looking to shift production closer to key markets like the U.S. and Latin America, free trade zones in Ecuador offer a viable and cost-effective alternative to Asia-based manufacturing. Ecuador’s strategic location on the Pacific coast and its free trade agreements with countries in the Americas make it a logical destination for such operations.

The zones enhance Ecuador’s competitive edge by lowering logistical costs and simplifying cross-border procedures. In doing so, they create a more dynamic and resilient economy capable of weathering external shocks and benefiting from global trade flows.

Conclusion: A Path Toward Sustainable Growth

In summary, Ecuador’s creation of the Posorja and Pascuales free trade zones is a bold and forward-looking move. These zones prove the country’s commitment to fostering a more efficient, diversified, and inclusive economy. Through innovative policy reforms, strategic location choices, and a supportive legal framework, free trade zones in Ecuador are poised to become powerful engines of national development.

As these zones attract new investment, generate employment, and promote the internationalization of local industries, their impact will extend well beyond the borders of Guayas. Ultimately, the evolution of free trade zones in Ecuador reflects a broader vision of sustainable, globally connected growth—one that balances economic efficiency with social inclusion and long-term prosperity.

In relative terms—measured by the number of factories and per capita production—the Dominican Republic’s cosmetics industry stands out as the largest in Latin America and the Caribbean. This dynamic sector plays a significant role in the country’s economic activity, not only due to its direct contributions through sales and exports but also because of its ability to generate jobs and linkages across various industries such as packaging, logistics, retail, and advertising.

According to data from the Dominican Association of the Cosmetics, Personal and Home Care Industry (Afaper), the country is home to 347 formally registered cosmetics companies. This thriving sector comprises various businesses ranging from microenterprises to large-scale manufacturers. Of these, a remarkable 81.27% are microenterprises, showing the importance of small-scale entrepreneurship in fueling the growth of this industry. Additionally, 2.68% are categorized as small businesses, 2.31% are medium-sized, and 3.75% are large enterprises, underscoring a diverse ecosystem that includes local innovators and established market players.

A Resilient Sector with Growing Global Reach

Despite logistical difficulties, climate-related challenges, and global supply chain disruptions—especially concerning raw materials—the Dominican Republic cosmetics industry has shown strong resilience and continued to thrive in domestic and international markets. During their recent participation at the HOY Economic Forum, Afaper leaders, including former presidents Pedro Alorda and José Antonio Lomba, board secretary Zaira Mártir, and executive director Yndhira Hernández, underscored the industry’s ability to meet growing demand despite these external pressures.

This resilience is reflected in the sector’s export performance. In 2024, exports reached approximately US$144.64 million, representing a solid 12.64% growth compared to 2023. These figures demonstrate an upward trajectory, reinforcing the industry’s capacity to scale and compete in global markets.

The Dominican Republic ranks seventh in the region in terms of beauty product exports, holding a 2.1% share. While not the highest in absolute export volume, this ranking is particularly impressive considering the country’s size and population, further affirming its leadership in per capita production.

Key International Markets and Export Dynamics

The Dominican Republic’s cosmetics industry has an impressive international footprint. In 2024, 95.64% of exports were directed to just a handful of key markets. These include the United States, Colombia, Curaçao, the Netherlands, Japan, Panama, Cuba, Guatemala, Haiti, Puerto Rico, Costa Rica, and Caribbean territories such as Bonaire, St. Eustatius, and Saba.

The United States remains the top destination, consistently accounting for nearly 49% of total exports over the past five years. This sustained demand from the U.S. underscores the industry’s ability to produce high-quality, competitively priced products that resonate with international consumers.

Moreover, Dominican cosmetic products are now present in over 70 countries, reflecting the industry’s increasing global appeal and capacity to meet diverse markets’ regulatory standards and consumer preferences.

Economic Impact and Job Creation

The Dominican Republic cosmetics industry’s positive economic impact extends beyond export revenue. In 2024, the sector directly employed 7,053 individuals, reflecting a 0.99% increase over the previous year. Women play a significant role in this workforce, holding around 48% of direct jobs, highlighting the industry’s contribution to female employment and empowerment.

In addition to direct employment, the industry generates approximately 185,000 indirect jobs across related areas, such as beauty salons, independent product sales, and brand promotion. These indirect roles help sustain a broad network of small business owners and service providers, many of whom operate in underserved or rural communities.

Moreover, the average monthly salary within the sector increased to RD$39,508.20, a 7.46% rise compared to 2023. This salary growth reflects the sector’s economic stability and commitment to improving its workforce’s livelihood.

Sales Growth and Market Expansion

According to Euromonitor data, the Dominican Republic cosmetics industry closed in 2024 with total sales of US$1.569 billion, equivalent to approximately RD$93.355 billion. This figure marks a 2.28% increase compared to 2023’s total of US$1.528 billion. Despite global economic headwinds, the industry continues to expand, driven by both local consumption and international demand.

This consistent growth is attributed to a combination of factors: the adaptability of local companies, increasing consumer awareness, improved branding and packaging, and the rise of natural and organic product lines that appeal to global markets.

The Role of Packaging and Graphic Design in Product Success

One key factor in the success of the Dominican Republic’s cosmetics industry is the synergy it has developed with other local industries—particularly packaging and graphic design. Afaper executives noted that advancements in these complementary sectors have significantly enhanced the quality and presentation of locally manufactured cosmetics.

Dominican plastics manufacturers have improved the functionality and sustainability of packaging materials, while the country’s graphic design sector has evolved to produce modern, appealing, and competitive labels and branding. This has allowed domestic producers to increase consumer acceptance and better compete on international shelves, where aesthetics and first impressions are often decisive factors in purchasing behavior.

Supporting Microenterprises and Innovation

Since microenterprises comprise more than 80% of the industry, fostering innovation and providing technical support for small business owners remains crucial. Many of these microenterprises operate at a community level, often producing artisanal and specialty products using natural ingredients sourced from the Dominican Republic’s diverse ecosystems.

Efforts to formalize and support these enterprises—through access to credit, training, and quality control mechanisms—are essential to ensuring that the industry continues to grow inclusively. Moreover, several small and medium-sized enterprises (SMEs) are beginning to invest in research and development, aiming to differentiate their offerings through product innovation, sustainable practices, and tailored marketing strategies.

Future Outlook and Continued Growth

Looking ahead, the Dominican Republic cosmetics industry is well-positioned for continued expansion. The combination of a skilled workforce, favorable trade relationships, improving infrastructure, and growing demand for health and beauty products—both locally and abroad—points to a positive future.

Industry leaders believe targeted investments in technology, e-commerce, and logistics will help overcome current raw materials and transportation challenges. Expanding trade agreements and partnerships, particularly with neighboring Caribbean and Central American countries, will likely open new growth opportunities.

As the country continues to strengthen its manufacturing base and diversify its export portfolio, the Dominican Republic’s cosmetics industry is a shining example of how small and medium-sized enterprises can fuel sustainable economic development, job creation, and international competitiveness in the modern economy.