Latin America has further established itself as a region with considerable economic opportunities. It has seen a proliferation of natural resources, geographic advantages, and in recent years, an increasingly diverse manufacturing and service industries. Costa Rica’s rapid growth in sustainable technology, Chile’s rise as a new fintech hub, and Colombia’s expansion in e-commerce and logistics are only a few examples of how the region has consolidated itself as a new frontier for international investment and development. However, there are also significant structural issues that present a drag on the growth potential for Latin America. Informality, low wages, underemployment, and bureaucratic hurdles remain part of the structural economic factors for many countries in the region. These factors continue to challenge economic growth in Latin America, especially when it comes to creating inclusive and formal employment.

Per the Inter-American Development Bank (IDB), while 70% of the working-age population of Latin America is already engaged in employment, most of these are informal jobs with no social protection, insufficient wages, and limited opportunity for professional growth. This limits the potential for full, shared, and sustainable development. In this context, foreign direct investment (FDI) is playing a key role to accelerate change in the region. FDI brings much-needed capital, creates formal jobs and hiring, fosters skill development and technology transfer, and drives overall productivity growth and competitiveness in key sectors across the region, such as renewable energy, manufacturing, agriculture, and digital services. Indeed, strategic FDI is increasingly being recognized as a critical lever for economic growth in Latin America, supporting innovation and modernizing industrial sectors.

FDI in Latin America: Regional Trends

FDI flows to Latin America have experienced ups and downs in recent years. A combination of global economic uncertainty, political transition, and commodity price fluctuations have driven considerable change across the region. Mauve Group analyzed FDI data for 20 Latin American markets, finding a 9% contraction in total FDI inflows in 2023, despite high growth recorded by some of the region’s largest economies.

Mexico remains one of the most attractive Latin American destinations for foreign investment. The country has reported an influx of USD 35.74 billion in foreign capital between January and September 2024, representing a 8.5% increase in FDI compared to the same period last year. The rise in FDI was driven by increased nearshoring to Mexico, especially in automotive manufacturing, electronics, and renewable energy. Both U.S. and Asian firms have been expanding or setting up new operations in the country, focusing primarily on northern states like Nuevo Leon and Chihuahua for their proximity to the North American market and competitive labor costs.

Other markets have also experienced high growth in FDI flows, according to Latinometrics data. Argentina grew by 57% while Costa Rica saw a 28% increase in FDI, followed by Chile with 19%. Argentina’s growth was driven by investments in lithium extraction, agriculture, and energy projects; Costa Rica has seen a sharp increase in foreign capital inflow with its leadership in sustainable manufacturing and life sciences, while Chile’s technology, renewable energy, and banking sectors have led its impressive growth. These trends demonstrate that FDI continues to serve as a cornerstone for economic growth in Latin America, reinforcing sectors with high potential for innovation and long-term competitiveness.

FDI in Latin America: Market Opportunities

Jaime Bustamante, Regional Director of Business Development at Mauve Group, a Latin American employer-of-record (EOR) and Global Employment Organization (GEO), spoke on these trends and their impact on development in the region. “FDI not only brings in foreign capital, but it also accelerates skill development and innovation,” Jaime Bustamante said. “It creates jobs, stimulates industries, and trains local workers with the skills they need to fill in-demand positions. In that way, it creates a virtuous cycle of productivity and resilience that can help foster long-term and sustainable growth in Latin America.”

Foreign firms, however, still face significant administrative and regulatory challenges when investing in Latin America. One of the most complex issues that still exists for foreign companies entering or expanding in Latin American markets is the sheer complexity of regulatory and tax systems. For example, in countries such as Mexico or Brazil, the administrative burden of navigating labor and tax compliance is often compounded for businesses unfamiliar with local frameworks. Mexico’s corporate tax season, for example, begins on March 31 of every year, while Brazil’s tax season starts on March 17. In both countries, business expansion is often stymied by a lack of support in managing compliance with myriad obligations, such as payroll, human resources, and rigid labor codes and stipulations. This can create a bottleneck of bureaucracy that slows business development.

FDI in Latin America: Regulatory Hurdles

Foreign investors are also sometimes discouraged by abrupt policy shifts and protectionist agendas in certain Latin American countries. Governments undergoing transitions or reform sometimes change tax breaks, minimum wages, or labor stipulations that directly impact foreign investment. This unpredictability underscores the need for stable and transparent regulatory policies that will incentivize long-term FDI.

In this context, employer-of-record (EOR) solutions and global employment organizations (GEO) have become a key differentiator. Mauve Group and similar platforms are helping foreign businesses across the region manage time-intensive and laborious HR and compliance processes, ensuring seamless and localized onboarding with significantly less bureaucracy, risk, and legal exposure. The EOR model allows investors to navigate regulatory frameworks with the support of local experts who can help businesses operate within the rule of law, which is particularly critical in Latin America, where missteps can incur high costs.

FDI and Global Mobility: Latin America

A third key dimension of FDI and its impact on growth in Latin America is global mobility. Cross-border employment and talent exchange are vital aspects of knowledge transfer and development. However, there are also significant gaps between companies and the foreign workers they employ in Latin America.

According to a 2024 study from Mauve Group, 90.8% of expatriate employees in the three countries surveyed, including Brazil, Mexico, and Colombia, reported having had little to no knowledge of labor regulations before their relocation to Latin America. 69.3% also reported feeling “not at all prepared” to navigate administrative processes, including, but not limited to, visa applications, tax compliance, or employee benefits. These findings point to a clear gap in knowledge and preparation for expatriate workers before assignment in Latin America and the importance of on-the-ground HR support.

Latin America is also acutely aware of the need to attract and retain skilled professionals, and governments and private sectors across the region are working to improve their relative advantage in this area. For example, Brazil has been developing its “Startup Visa” for foreign entrepreneurs and innovators, and Chile has unveiled a “Tech Visa” to attract high-tech talent from abroad. Countries are not just competing for capital but also for human capital with these investments in recruitment and onboarding for key industries such as artificial intelligence, clean technology, life sciences, and fintech. These resources are vital for both sustainable innovation and long-term competitiveness in the region.

FDI Success Stories

The potential for FDI to positively impact economic growth in Latin America is evident in the region’s success stories. The deepening relationship between Brazil and China is one example of a growing symbiosis. Trade and investment between Brazil and China are on the rise, with China’s consumption of Brazil’s primary products helping to drive increased demand for Brazilian agribusiness and mining exports. Brazil’s processing and export capabilities are also growing, and Chinese companies are investing in Brazil’s clean energy and automotive manufacturing.

Costa Rica, as mentioned earlier, is another compelling case study for FDI and its sustainable development potential in Latin America. FDI in sustainable technology and related manufacturing is helping position the country as a new global leader in eco-friendly business. Major firms in medical devices, biotechnology, and renewable energy have been attracted by Costa Rica’s reputation for political stability, well-trained workforce, and institutional transparency. This provides a model not just for FDI in Latin America, but one that also aligns with more sustainable, longer-term development plans.

Colombia’s government reforms and successful security measures have opened the door for investment in logistics and transportation. Peru, similarly, has been a regional leader in attracting multinational mining and engineering firms. Chile, despite some limitations, has maintained a consistent and open environment that has made it one of the region’s most attractive destinations, aided by its growing digital ecosystem and services.

The Future of FDI

As global supply chains are reconfigured, nearshoring will remain a critical factor that will determine how and where long-term investors decide to commit capital. Latin America, especially Mexico, Central America, and northern South America, will likely play a key role in the re-shoring and nearshoring of production and supply chains away from Asia. At the same time, Latin American countries must address the institutional and regulatory inefficiencies that have plagued much of the region for decades. Governments must improve the rule of law, reduce bureaucracy, and streamline processes while also making real investments in education and workforce development to ensure that people have the skills they need to support further growth. These are complex goals, however, which are not easily achieved, especially as it takes many years to train a capable workforce.

Sustainable investment, in particular, is an area of focus. Latin America must do more to promote FDI that creates a circular economy around renewable energy, clean technologies, and other eco-friendly industries, while also boosting inclusivity and participation. For example, public-private partnerships (PPP) can help bridge infrastructure and digital gaps, and developing a national brand to attract green investment and digital innovation can help countries like Panama and Uruguay reduce the gap with their neighbors in other areas of economic growth.

Conclusion

Foreign direct investment (FDI) is an essential pillar for sustainable and inclusive economic growth in Latin America. FDI creates formal jobs, stimulates local industry, transfers skills and technology, and connects Latin American economies to global value chains and trade. Despite existing regulatory challenges and structural issues, there are reasons to be optimistic about FDI’s long-term outlook. Latin America is increasing diversification in trade, production, and investment, especially in regards to growing partnerships with China. The region’s future trajectory is bright and will be highly influenced by external factors such as nearshoring as a global economic trend. The most effective strategy to mitigate downside risk and boost the attractiveness of the region in the medium to long term will be to pursue greater transparency, simpler regulations, and investments in human capital to sustain economic growth in Latin America over the coming decades.

The Australian company Ausenco bets on Peru as it strengthens its long-term commitment to expanding its presence and operations in the country. Operating in the Peruvian market for over 17 years, Ausenco aims to position itself as a regional reference for mining engineering and consulting services in South America. This statement was made by Leonardo Peña, Vice President of Minerals and Metals for the Peru office, as the company announces its plans for growth over the next two to three years. With a clear focus on sustainable mining, digital transformation, and innovative engineering solutions, Ausenco Peru has set an ambitious goal of achieving 30% growth by the end of 2025, responding to the increasing demand from the industry.

Ausenco’s Global Background and Presence in Peru

Ausenco is a Brisbane-based company that offers comprehensive consulting and engineering services to the mining, metals, and related industries. In Peru, the company’s portfolio includes services related to studies, project execution, asset management, and maintenance, covering the entire mining value chain.

“Our work has always been aligned with the market and national development. In nearly two decades, we have participated in significant mining projects such as San Gabriel, Zafranal, Marmato, and Warintza, among others. These projects have strengthened our team and consolidated our reputation for delivering projects characterized by technical excellence and environmental commitment,” said Peña.

Peru as a Strategic Hub for Regional Expansion

Currently, Australian company Ausenco bets on Peru not only as a platform for growth in South America but also as a strategic node in its network of engineering and consulting operations worldwide. As one of the top copper producers globally and with an increasing portfolio of projects in critical minerals, Peru offers an attractive base for the company’s regional expansion plans.

Ausenco’s activities in the country, coordinated from its Lima office, are also part of a regional engineering hub that supports projects in Ecuador, Colombia, and Guatemala, among others, while maintaining close relationships with other offices in the Americas, Australia, and other countries.

Growth Performance and Market Demand

Leonardo Peña, vice president of minerals and metals of Ausenco Peru, detailed that the company has recorded sales growth throughout the first half of 2025. This performance, he said, is both a reflection of an increase in market demand for sustainable engineering solutions and Ausenco’s ability to capture that demand through its proactive approach to anticipate the needs of the sector.

“We have taken advantage of this window of opportunity thanks to our multidisciplinary integration capacity, from the very beginning of the development of a mining project. This allows us to optimize project timelines, reduce risks and ensure alignment with the sustainability objectives of our clients,” he said.

Strong Project Backlog and Long-Term Growth Outlook

The executive highlighted that Ausenco’s growth in Peru is supported by a solid project backlog. This backlog consists of committed contracts with enough work to guarantee billing for several months, in addition to strategic partnerships in copper and critical mineral projects. The company, he said, expects to reach a 30% increase in business volume, year-on-year, by the end of this year and to continue at that growth rate over the next two to three years.

All of these projections, the executive added, are in line with global megatrends towards responsible mining and the decarbonization of industrial processes.

Peru’s Role in Ausenco’s Latin American Portfolio

In regional terms, Peru already represents about 40% of Ausenco’s total portfolio of projects in Latin America. Although Chile remains the region’s leading market in terms of total mining volume, thanks to its long-established copper production, Peña said that Peru has shown a dynamism in recent years that has allowed it to position itself as one of the main poles of sustainable mining in the region.

“We have reached similar operating volumes to those of our Chile office, demonstrating the capacity and commitment of our local team and the growing relevance of Peru as a destination for mining,” he explained.

Building a Regional Hub for Sustainable Engineering

All these aspects, he added, outline how Australian company Ausenco bets on Peru as one of the central pillars of its strategy for its entire Latin American network of operations. The company, he said, has a clear long-term vision of transforming its Lima office into a regional hub that, in addition to serving clients in South America, will position the country as an exporter of engineering excellence to other emerging mining markets worldwide.

Comprehensive Services Across the Mining Value Chain

The opportunities, he added, are extensive and involve all segments of the mining value chain. Ausenco’s service portfolio in Peru includes all the phases of a project—from conceptual and feasibility studies to engineering design, project management, construction, and long-term optimization of assets and facilities.

In this context, the company has been playing a very active role in providing consulting services related to environmental, social, and governance (ESG) issues, helping its mining clients align with international sustainability standards and improve operational efficiency.

Engineering Innovation and ESG Commitment

In this regard, Peña mentioned the design of concentrator plants and the development of mineral transport infrastructure, such as mineral pipelines, as key segments. The implementation of innovative logistics and maintenance solutions to improve the productivity and sustainability of mining operations in Peru would also be an area of growth in the coming years.

Challenges Facing the Peruvian Mining Sector

However, the executive acknowledged that Peru’s mining potential is not without challenges. He noted that the country still faces a need for a more stable and predictable regulatory framework, especially regarding permits for exploration and development of new mining projects. Lengthy approval processes and changing requirements increase uncertainty and costs for investors.

Additionally, the geographical location of many projects in hard-to-reach areas, as well as the increasing demand for mining operations to generate tangible and sustainable benefits for local communities, remain significant challenges for companies like Ausenco.

A Holistic and Stakeholder-Focused Approach

Australian company Ausenco bets on Peru through an integrated and holistic approach that involves not only technical innovation but also active engagement with all stakeholders.

“We apply comprehensive risk analysis from the very first stages of the design of a project, maintain continuous dialogue with the different communities and authorities involved in the project, and design solutions that are tailored to the specific environmental and geographic conditions of each project,” explained Peña.

This approach, he added, not only makes projects more viable and less susceptible to delays and cost overruns but also strengthens the company’s reputation as a trusted and responsible partner in the Peruvian mining industry.

Investment Priorities: Talent, Technology, and Sustainability

As part of its commitment to long-term growth, Ausenco plans to increase investment in Peru over the next few years, focusing on three fundamental areas: talent, technology, and sustainability.

Peña announced that the company is betting on the implementation of AI-based systems to optimize project design and execution, improve predictive maintenance, and enhance decision-making. “These investments, while capital intensive, are critical for us to maintain our competitive edge in an industry that is rapidly changing and transforming worldwide,” he added.

Driving the Energy Transition Through Innovation

“We will also be making investments in the development of innovative engineering solutions that will allow us to promote the energy transition. Finally, we will continue to make investments in the continuous training of our local human talent,” said the executive.

The company plans to position Peru as a regional hub for sustainable engineering and a center of innovation where technology and environmental responsibility go hand in hand.

Peru as a Source of Innovation and Human Capital

This commitment also translates into how Australian company Ausenco bets on Peru not only as a market but as a source of innovation and talent that can drive the transformation of mining worldwide.

Among other actions, the company has acquired cutting-edge tools that allow more precise, efficient, and less polluting engineering processes. This includes dynamic simulation, which allows engineers to anticipate potential operational bottlenecks and optimize designs before the construction phase, reducing costs, risks, and environmental impact.

Advanced Engineering Tools and Digital Transformation

Ausenco has also incorporated next-generation platforms such as SmartPlant 3D, which allows detailed three-dimensional modeling of complex facilities, and EcoSys, an integrated project management system that improves control over capital expenditure (capex) and financial forecasting.

The company has also invested in proprietary solutions such as OutGrind, specialized software that integrates the company’s engineering knowledge for sizing critical equipment in concentrator plants.

Commitment to Sustainability and Community Development

The company’s vision of long-term sustainability for Peru is based on environmental stewardship, community engagement, and shared economic growth. By training Peruvian professionals in the latest digital and green technologies, Australian company Ausenco bets on Peru with the aim of strengthening local human capital and contributing to equitable development.

Its sustainability strategy includes efforts to reduce water consumption and energy use, promote circular-economy practices, and design energy-efficient facilities that support clients’ net-zero goals.

Collaboration with Academia and Human Capital Development

Ausenco is also engaged in collaborative initiatives with local universities and technical institutes to develop a new generation of engineers and technicians with the skills needed for the future of mining. These alliances contribute to strengthening the company’s talent pipeline and Peru’s broader human capital base.

Conclusion: A Long-Term Vision for Sustainable Growth

In sum, Australian company Ausenco bets on Peru as a market of opportunities and a laboratory for sustainable mining. The company’s longstanding presence, technical expertise, and commitment to environmental and social responsibility have positioned it as a key player in the country’s mining future.

A Tariff-Proof Manufacturing Base

Creating a “tariff-proof” manufacturing or assembly base may become the path to building operations that are more resilient, sustainable, and embedded in the local economy. As global fragmentation in international trade continues, Mexico has become a natural fit as a favored destination to relocate investment flows that want more predictability in the medium and long term, and access to large consumer markets. In particular, China wants to partner with Mexico with those strategic goals in mind, Diana Gamboa, Communication and Media Manager of the Mexico-China Chamber of Commerce and Technology (ChAMCham), says.

A Rising Tide of Chinese Investment

China has become the third-largest country of origin for investment announcements in Mexico. Mexico’s Ministry of Economy reports that more than 1,000 Chinese companies have been registered in Mexico under the foreign direct investment regime. The Mexico-China Chamber of Commerce and Technology estimates that the figure is between 4,000 and 5,000 when accounting for representative offices, distributors, and commercial intermediaries. This indicates not only an expansion of Chinese presence but an even greater deepening of Chinese operations in the Mexican economy.

Trade Realignment and Strategic Diversification

José Manuel Salazar Xirinachs, Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), believes the world is experiencing a realignment of global trade, “above all as a result of policy changes adopted by the United States, and particularly its China policy.” In this new investment context, diversification is the approach. But diversification is hard in the Mexican case since the economy is still predominantly anchored to the United States. As Finamex Casa de Bolsa Chief Economist Víctor Gómez Ayala explained, 80% of exports are destined for U.S. markets, while a greater share of imports comes from Asia. However, in this geopolitical moment of caution, Asia is not the most strategically attractive partner.

Moving Beyond Assembly to Strategic Integration

Nevertheless, China wants to partner with Mexico to develop an integrated production base that can serve global markets and leverage the country’s specific trade and investment advantages. Mexico’s critical mass in industrial sectors such as aerospace, medical devices, software, and advanced manufacturing clusters is a strong draw. Industrial clusters generate virtuous circles that pull in more investment and talent, strengthen the supply chain, and further embed a value-added manufacturing base.

Ten years ago, China saw Mexico almost exclusively as a low-cost assembly base to access the U.S. market. Today, it’s clear that China wants to partner with Mexico in a more strategic, long-term way. Gamboa highlights the fact that Chinese companies have stopped thinking only of Mexico as a staging ground for exports to the U.S. market, and increasingly, see Mexico as a market in itself. “The reasons that Chinese companies are coming to Mexico,” Gamboa says, “are not only for geographic reasons. Mexico has free trade agreements with over 50 countries, and the North American market is a preeminent platform from which to access the rest of the world. At the same time, it also has macroeconomic stability, competitive costs, and a young and skilled labor force.” China’s evolving relationship with Mexico reflects the way investment is being redefined in response to a global fragmentation of international trade. It’s no longer enough to plug into global value chains that are themselves vulnerable to disruption, be that from tariffs or sudden shifts in policy. Chinese companies want direct access to North America’s production ecosystem by physically embedding in the region.

Geopolitical Sensitivities and the U.S. Factor

But of course, this increasing alignment also raises acute political concerns. Alberto Quiroz, Public Affairs Manager at Integralia, points out the fact that the United States is increasingly sensitive to Chinese investment that attempts to use Mexico as a platform to evade tariffs or other restrictions on Chinese imports. “It is an issue that will become even more important,” Quiroz says, “during the upcoming period of review of the United States-Mexico-Canada Agreement (USMCA).” However, he concedes that it represents a political dilemma: on the one hand, “productive investment is welcome regardless of origin, as long as it has the potential to become a key part of the national economy.”

Major Chinese Enterprises Embedded in Mexico

Examples of large Chinese enterprises that are already operating in Mexico and investing in manufacturing operations abound. Among them, firms like Hisense, Minth Group, Huawei, Kuka Home, Hangzhou XZB, JAC Motors, Changan, ICBC, Honghua Group, and many others are not just investing in Mexico, but are beginning to treat the country as a strategic market in its own right. And all of this is creating the foundation for more long-term integration.

The BYD and Dragon Mart Cases

BYD, an electric vehicle manufacturer, is a case in point. Rumors in China said the project in Mexico would be canceled, but in fact, Gamboa confirms it is going forward, but in a measured way: that is, with a scale that is more in line with current operating conditions. “A more pertinent example, given the current circumstances, could be the Dragon Mart project, a Chinese retail and logistics project that began in 2012 in Quintana Roo.” At the time, a number of foreign investors showed interest in coming to Mexico to invest in infrastructure projects. “The project did not materialize because of a lack of consensus among the various stakeholders,” Gamboa says. “In this regard, one of the lessons learned is that in Mexico, there needs to be coordination and consensus not only between authorities and the private sector but with local communities as well. They are also an essential part of any project, and their voice must be taken into account.”

Opportunities for Innovation and Industrial Integration

China wants to partner with Mexico, not only to develop existing infrastructure, but also to co-create innovation, logistics, and value-added production ecosystems. Mexico’s industrial hubs in booming states like Nuevo León, Guanajuato, and Querétaro are also looking increasingly attractive to Chinese companies that want to embed within a mature supply chain ecosystem. This is crucial in industries like automotive, electronics, and renewable energy, where Chinese capabilities are strong and bring both technological know-how and capital. At the same time, Mexico provides proximity to markets in North America and trade advantages.

Improving Infrastructure and Business Conditions

In recent years, Mexico has also been working to make targeted improvements in infrastructure and regulatory transparency to attract foreign capital. Industrial parks designed for foreign investors, improved energy availability, and streamlined customs procedures have all been part of this trend. As China wants to partner with Mexico, this more robust and dynamic environment becomes even more attractive.

Macroeconomic Stability as a Strategic Asset

Mexico also offers a compelling macroeconomic picture for Chinese investment. With a relatively stable inflation rate, its interest rate regime is predictable and favorable for long-term planning, and its central bank has developed credibility with investors, all of which makes Mexico a safer bet for Chinese investors seeking predictability and yield outside of Asia.

A Strategic Fit with the Belt and Road Vision

Further, Mexico’s development agenda is well-aligned with the Belt and Road Initiative (BRI) push by China’s government to expand infrastructure connectivity and economic corridors. Mexico is not a formal part of that initiative, but the spirit of that framework is well-aligned with Mexico’s long-term goals of positioning itself as a global manufacturing and logistics hub. Chinese companies are motivated to mitigate risks and access high-consumption regions like the U.S., so Latin America, and particularly Mexico, offers an attractive alternative.

Navigating the U.S.-Mexico-China Triangle

In this context, Mexico and China must also be careful not to antagonize the United States, which remains the anchor of Mexican trade and investment activity. But with strategic coordination and transparent policy frameworks, this three-way relationship can be more complementary than competitive.

Future Collaboration in Emerging Sectors

Gamboa also suggests that greater collaboration in areas of innovation, renewable energy, green supply chains, and digital infrastructure could further shape the next phase of the engagement. Chinese battery producers, for instance, are already identifying Mexican states with lithium potential for further collaboration. Cooperation on areas of AI, smart manufacturing, and 5G connectivity could further bind the two economies together and increase local capability.

A Long-Term, Value-Generating Partnership

Overall, there is no shortage of possibilities. China wants to partner with Mexico not simply to avoid tariffs or reposition its supply chains, but to become a long-lasting and value-generating force in the region. This sort of partnership can become a game-changer for the dynamics of investment and trade in the Americas, as long as all three parties align their regulatory, diplomatic, and community interests.

Medellín received the title of “Most Innovative City in the World” in 2013 from Citigroup, The Urban Institute, and The Wall Street Journal. Since then, the city’s story has been shaped by a dream of forming major alliances that help overcome the socioeconomic gaps preventing it from reaching its full competitive potential. Over the last decade, Medellín has undergone an economic metamorphosis grounded in sustainability, social inclusion, and internationalization. Once overshadowed by instability, the city now attracts forward-thinking enterprises and investors committed to building long-term prosperity.

Tourism and Culture Fuel the Local Economy

The local economy is energized by tourism driven by Antioquian culture, which is currently showcased in the renowned Feria de las Flores (Flower Festival). This event draws visitors from around the world and across Colombia who want to experience traditional Antioquian customs. The Flower Festival is not just a cultural affair—it is an economic engine. It provides a platform for hundreds of small and medium-sized businesses, artisans, hotels, restaurants, and transportation providers to benefit from the influx of tourists.

Nicolás Rodríguez Aristizábal, Director of Investment at ACI Medellín, stated, “The Flower Festival is a space to position the city. Here, we welcome ambassadors and investors, showcasing our traditions to them. They come to experience our culture and fall in love with it, so we are fully aligned with the city’s strategy to generate investment encounters.” This cultural diplomacy approach has proved effective, as many visitors see Medellín not only as a destination for leisure but also as a gateway for business opportunities in Colombia and Latin America.

Every year, thousands of tourists arrive in the city, expressing admiration for its urban development, infrastructure, and the warmth of its people. These are key factors that make Medellín not only a destination for family-friendly activities but also a thriving business hub where corporate alliances are welcomed. Hotels report occupancy rates exceeding 90% during peak cultural events, and the city’s airports handle increased international traffic, reflecting Medellín’s growing integration into global travel networks.

Investment Event Showcases Medellín’s Potential

Recently, the Medellín 2025 Investment Roundtable was held. This high-level forum facilitated connections with international investors focused on the city, aiming to attract foreign capital with high growth potential across a range of industries. These sectors include infrastructure and logistics, technology services and outsourcing, commerce, manufacturing, creative industries, agribusiness, life sciences, and energy. Medellín’s diverse industrial base allows it to weather global economic headwinds while opening doors to niche sectors like fintech, healthtech, and green energy.

These industries have helped position Medellín as a prime destination where major companies seek to invest and grow their operations, thanks to a well-qualified labor force, institutional support, and modern infrastructure. In addition, Medellín’s universities and vocational training institutions, such as Universidad EAFIT, Universidad de Antioquia, and the SENA network, play an instrumental role in talent development—furnishing a steady pipeline of bilingual and tech-savvy professionals.

All these attributes make Medellín a haven for startups and business expansion—enhanced by the friendly culture and temperate Antioquian climate. Additionally, the city’s cost of living and cost of doing business are significantly lower compared to other Latin American hubs such as Bogotá, São Paulo, or Mexico City, giving it a strategic price-performance advantage.

Medellín: A Hub for International Business

Today, the city is recognized for its international business prospects. It appears on the global radar as a leader in tech-based startups, some of the most robust in Latin America. Medellín’s startup scene is gaining increasing attention for its strong ecosystem supported by innovation hubs like Ruta N and the Center for the Fourth Industrial Revolution, one of only a handful in the world created in partnership with the World Economic Forum.

But it wasn’t always this way. In the past, the city faced periods of violence that discouraged foreign investment in Medellín and posed significant risks to local businesses. The transformation is particularly notable because it was driven by long-term public policies that emphasized resilience, inclusiveness, and international integration.

The Medellín Mayor’s Office played a key role in reversing this trend. The path to combating insecurity was rooted in education, entrepreneurship opportunities, the creation of technology development centers, and offering alternatives that would steer youth away from violence. Aligned to generate opportunities and focus on young talent, Ruta N was founded in 2009. This organization was created to foster innovation, entrepreneurship, and the growth of tech-based businesses. It has incubated and accelerated hundreds of startups, providing mentorship programs and international investor connections.

Institutional Support to Attract Foreign Capital

In response to the growing need to attract international investors to Medellín’s industrial landscape, the Agency for Cooperation and Investment of Medellín and the Metropolitan Area (ACI Medellín) was established. This agency has been instrumental in bringing foreign investment to Medellín and consolidating strategic partnerships to expand local markets. Through detailed investor roadmaps and personalized assistance, ACI Medellín removes friction from the investment process—providing foreign companies with a clear pathway to launch or expand operations in the city.

ACI has built global bridges, putting Medellín on the map for foreign investors. Through alliances with leading global companies, ACI leverages international cooperation to implement projects that enhance the quality of life for residents of Medellín and the Aburrá Valley. The organization also coordinates closely with ProColombia and Colombia Productiva, ensuring that foreign direct investment complements national development priorities.

In line with its mission to attract foreign investment in Medellín, ACI presented the results of its efforts during the first half of 2025. The Investment Roundtable, led by ACI Medellín and the Medellín Chamber of Commerce for Antioquia—with support from ProColombia, Ruta N, ANDI del Futuro, and the Antioquia Governor’s Office—showcased the city’s strategic direction and growing visibility among global investors.

Foreign Investment in Medellín: 2025 Outlook

As of mid-2025, ACI reported 18 foreign direct investment projects amounting to USD 168.11 million, with projections for more than 8,100 jobs. This foreign investment in Medellín originates from countries including the United States, France, the United Kingdom, Brazil, China, and Puerto Rico. These investments span across sectors such as software development, BPO (business process outsourcing), agritech, advanced manufacturing, and logistics.

Nicolás Rodríguez Aristizábal commented, “From the agency, we supported $168 million in investments and reinvestments. These were 18 projects across the technology and agricultural sectors. We expect to close the year with $400 million in foreign investment in Medellín supported by the agency.” These figures reinforce Medellín’s evolution from a national center of industry to a regional magnet for high-value international capital.

Medellín: A Business and Innovation Powerhouse

The Investment Roundtable enabled 27 regional companies to engage with national and international investment funds, expanding their reach and solidifying Medellín as a business hub capable of transforming society through a stable economy and strong labor conditions. These matchmaking sessions included seed funding discussions, venture capital introductions, and infrastructure co-financing opportunities.

Among the key outcomes were 350 tech-based startups and more than 300 investors facilitating the development of these initiatives. These efforts reinforce Medellín as a vibrant innovation ecosystem, with support from key players like Ruta N and Staritia—crucial allies in building the best environment for startups. The presence of these firms also allows Medellín to serve as a testing ground for digital solutions that can later be scaled across Latin America.

International Cooperation and Social Impact

It is worth noting that these international collaborations generated USD 2.58 million in social projects focused on gender equity, circular economy, data for public governance, and hunger alleviation strategies. These projects are not peripheral—they are essential to Medellín’s inclusive growth model. From pilot programs for digital inclusion in low-income neighborhoods to entrepreneurship grants for women and youth, foreign investment in Medellín is tied to measurable social impact.

ACI also leads initiatives that drive the city’s economic and social progress, including the Antioquia Investment Table and diversification of investment mechanisms. Two noteworthy platforms include MedInvest and the First Investment Roundtable for Traditional Sectors—both essential for boosting local industries through domestic and international capital. These platforms aim to integrate traditional sectors like textiles, food production, and furniture manufacturing into the global value chain.

Global Networking from Medellín to the World

A standout success story is SOS Paisa, a network created by the Medellín Mayor’s Office. It connects Paisas (people from Antioquia) living abroad to contribute to the city’s development through networking, bringing together individuals with shared interests to form both professional and personal connections. The initiative has attracted members from more than 25 countries and has played a role in several investment opportunities and philanthropic initiatives.

Conclusion

In summary, foreign investment in Medellín is not only accelerating its transformation into an innovation powerhouse but also bridging global capital with local talent. Backed by robust institutional support, cutting-edge infrastructure, and a people-centric development model, Medellín continues to evolve as an inclusive and visionary business destination for the 21st century. From tech startups to agribusiness, from social development to global networking, Medellín is proving that with the right vision and partnerships, cities can reinvent themselves and lead on the international stage.

Embraer, the Brazilian aerospace company, has just obtained an exemption from the tariffs announced by the Trump administration on Brazilian goods. On July 30th, President Trump’s administration declared that, effective August 1st, 50% in tariffs would be added to a comprehensive package of Brazilian exports. However, through diplomatic outreach and established economic policy, Embraer obtains an exemption that prevents its commercial and executive aircraft from being subject to financial penalties from the increase.

In this post, we’ll discuss the extent of Embraer’s exemption, what aircraft the deal covers, and why it matters for companies on both sides of the equator.

Escaping from the Tariff Storm: Good News for Embraer’s Commercial Aircraft

The tariff declaration applies an additional 40% tax on top of existing levies, making Brazilian goods generally more expensive in U.S. markets. However, the U.S. government made a point of exempting civil aircraft, as well as aircraft parts and components, from the policy. Sources from the aerospace industry tell us that Embraer obtained an exemption from the White House after a concentrated campaign of negotiation, based on its importance to the U.S. regional jet fleet and local production.

This case closely resembles rulings against Airbus in the past. As trade war heat was turned up across the Pacific, American negotiators have regularly carved out large civil aircraft from punitive measures in order to avoid disrupting key supply chains and airline economics.

Saving the E175: A Key Player in U.S. Domestic Aviation

The biggest winner in the exemption is easily the Embraer E175-E1 regional jet, used extensively in the U.S. by regional airlines under the livery of major carriers like Delta, American, and United. Regional jets like the E175 fill a unique role in domestic aviation and keep passenger counts high at smaller airports that don’t get as much traffic as larger hubs.

Absent the tariff exemption, Brazilian-made aircraft and component sales would be much more difficult to justify, creating potential holes in regional coverage that could hurt smaller carriers and make their businesses unprofitable. Instead, Embraer obtains an exemption that will keep these workhorse jets in the middle of the U.S. market for the foreseeable future.

Gearing Up for the E2 Family and Praetor Jets

The exemption also applies to Embraer’s larger E-Jets E2 family and its line of Praetor 500 and Praetor 600 business jets. The E2 aircraft line is Embraer’s newest and most competitive lineup, which includes updated versions of its E190 and E195 jets. It gives Embraer a technological edge that places it head-to-head with Bombardier and Gulfstream in long-range, fuel-efficient executive aircraft.

Embraer has placed a significant emphasis on quality in recent years, creating aircraft that punch above their weight class in terms of range, fuel consumption, and payload capacity. The company has also been able to sell these aircraft at more competitive prices than traditional market leaders. The tariff-free ability to sell to the U.S. domestic market is a significant win that will allow the company to continue competing on performance even as the regional market fragments.

In another win for the company, Embraer obtains an exemption that will protect these and its most competitive models, too.

Made in Florida: Protecting Embraer’s North American Operations

Beyond Embraer’s aircraft portfolio, the tariff exemption also acknowledged the unique economic role that the company plays in the U.S. manufacturing industry. Embraer operates an assembly line in Melbourne, Florida, which produces the Phenom 100 and Phenom 300 light jets for the U.S. and international markets. This factory also serves as a high-skill employer for dozens of local workers in the region, tying itself to the aerospace and economic communities.

While the Phenom jets assembled at the Florida plant are technically made in the U.S., they use many high-end components that are still manufactured and shipped from Brazil. In addition to the aircraft themselves, these parts would have been subject to import taxes under the new tariffs, increasing the total manufacturing cost and driving up prices. However, Embraer obtains an exemption for its critical components and maintains a streamlined production for its U.S.-made aircraft.

Large Civil Aircraft: Traditionally Exempted from Trade Conflicts

Aerospace is also an industry that has shown a strong degree of continuity in the past, even during intense geopolitical flare-ups. It is common for major manufacturers and programs to be carved out of broad-based sanctions or tariffs. This practice is the direct result of the complex and global nature of the industry, with international supply chains stretching across hundreds of suppliers and subcontractors.

The United States government and Brazilian Embraer have been able to negotiate in a way that has produced this exemption, allowing all parties to avoid the kind of unintended blowback that broad sector tariffs have in the past.

In a savvy move, Embraer obtains an exemption in a high-stakes environment, which serves as a tacit recognition that aviation products should not be subjected to tariffs in the same way that other goods are treated.

The Missing Piece: Military Aircraft—Where Does It Stand?

Oddly, the new decree that levies these penalties does not have similar protections for military and defense-related aircraft. This could put additional pressure on sales and production of programs like the A-29 Super Tucano, which is manufactured in Florida by Embraer as part of an agreement with Sierra Nevada Corporation. Embraer’s C-390 Millennium transport aircraft could also be negatively affected by this program, due to its unique capabilities and design elements.

While Embraer’s military and commercial aircraft share limited areas of overlap, any future disruption to either segment’s manufacturing process, supply chain, or other factors could create future complications when making sales to the U.S. military or third-party countries.

In Conclusion: An Embraer Exemption with Room to Expand

In conclusion, Brazil’s Embraer obtains an exemption for itself and its aircraft from the steep tariffs placed on Brazilian goods and companies. This exemption is a major positive for the company’s business strategy, as it keeps Embraer’s aircraft competitive in price, its supply chains protected, and its existing commitments secure.

A major message from this ruling is that the current geopolitical environment is somewhat volatile and unpredictable. But, a physical and economic commitment to major markets like the United States can give companies significant political and diplomatic leverage, should trade or geopolitical conflict begin to escalate.

While it remains to be seen how Embraer and other major manufacturers and airlines will be affected by the larger U.S.–Brazil trade dispute, one thing is clear: Embraer obtains an exemption and buys itself some time in one of the most important markets for the company’s future growth.