Brazil has announced its most extensive airport investment program to date, aimed at modernizing Brazilian airports to meet the growing demands of both domestic and international travelers. Over the next five years, the government plans to expand and revitalize 130 airport terminals nationwide in a move expected to boost regional connectivity, support economic development, and address longstanding infrastructure gaps. In an interview with CNN Brazil, Silvio Costa Filho, Brazil’s Minister of Ports and Airports, shared insights into this ambitious program, highlighting its broad scope and critical role in fostering economic growth through improved transport networks.

An Unprecedented Investment in Brazilian Airport Infrastructure

The Brazilian government’s airport investment program is the largest in the country’s history in terms of the scale and financial resources involved. This transformative initiative, which Costa Filho explained will include a combination of public and private investments, focuses on three primary objectives: constructing new regional airports, substantially upgrading existing facilities, and creating a more efficient and modernized national airport network. The initiative is seen as a critical step toward modernizing Brazilian airports to meet the demands of an increasingly mobile population while also making Brazil a more attractive destination for international tourism and business.

Regional Airport Construction and Development

One of the modernization program’s most crucial elements is the emphasis on regional airports, which are essential for enhancing air connectivity across Brazil’s vast territory. Brazil has dozens of small regional airports operating under concession agreements. According to Costa Filho, the government plans to upgrade at least 30 airports through improved facilities, expanded terminals, and more frequent and reliable services. This approach aligns with modernized Brazilian airports to create a better comprehensive transport network for urban and remote areas, providing faster access to economic and social hubs.

Additionally, the state-run airport operator Infraero is working on projects to develop 20 new airports, with a flagship project underway for the future Olímpia International Airport, set to serve northern São Paulo state. This new facility will enhance São Paulo’s air connectivity and support tourism and commerce in this rapidly developing region. This part of the investment program highlights the government’s recognition that modernizing Brazilian airports can catalyze regional economic development, promoting new economic opportunities in areas that are currently underserved.

Expanding Connectivity Through 80 New Projects Nationwide

In addition to developing new airports, the program includes extensive modernization and expansion efforts at 80 existing airports across Brazil. Much of this work will be done through private-sector partnerships under concession agreements. By involving private operators, the government aims to accelerate the pace of modernization while leveraging industry expertise in airport management and technology. The overarching objective is to establish a network that can keep pace with Brazil’s growing demand for air travel, particularly in regions where tourism and agricultural industries are expanding.

This regional expansion strategy also reflects Brazil’s broader goal of using transportation infrastructure as a vehicle for economic inclusion. Many of these projects aim to improve accessibility in remote areas, ensuring that even small communities benefit from the nationwide effort to modernize Brazilian airports. By providing reliable air links to these regions, the government hopes to open up new opportunities for business, tourism, and essential services, making air travel more accessible to a more significant segment of the population.

Modernizing Major Hubs: São Paulo and Rio de Janeiro Airports

In addition to regional improvements, Brazil’s two most significant metropolitan areas, São Paulo and Rio de Janeiro, will receive substantial investments to upgrade their primary airports. São Paulo-Guarulhos International Airport (GRU), which handles approximately 70% of Brazil’s international arrivals, is set to undergo a significant transformation to enhance passenger experience and bolster security measures. The new administration of GRU has already outlined a comprehensive modernization plan, including expanded terminal facilities, updated security systems, and improvements in customer service infrastructure, all aimed at modernizing Brazilian airports to provide a world-class experience for travelers.

Similarly, Congonhas Airport (CGH), São Paulo’s second busiest airport, is set to benefit from a sizable investment by the Spanish airport operator Aena. With an investment of 2 billion reais (around USD 350 million), Aena will focus on passenger comfort, modernized amenities, and streamlined airport operations. These improvements will help ensure that Congonhas can serve as a seamless, efficient transit point for millions of travelers annually.

For Rio de Janeiro, the government is committed to expanding the capacities of both Galeão (GIG) and Santos-Dumont (SDU) airports. While Costa Filho declined to provide specific details, he confirmed that discussions are underway with multiple stakeholders to ensure that the airports’ facilities and services meet international standards. These improvements in São Paulo and Rio de Janeiro, Brazil’s leading economic and cultural centers, will play a pivotal role in supporting the modernization of Brazilian airports and strengthening Brazil’s position as a global tourism and business destination.

Supporting Tourism and Agriculture through Airport Modernization

One of the central goals of Brazil’s airport modernization program is to foster tourism growth, particularly by increasing domestic flight routes to underserved regions. Brazil’s rich natural and cultural landscapes make it an attractive tourist destination, but limited infrastructure has traditionally hindered access to many areas. By modernizing Brazilian airports, the government hopes to stimulate tourism and drive new economic activity in emerging tourist regions. Improved airport facilities and expanded flight options are expected to boost international and domestic visitor numbers, supporting Brazil’s tourism industry.

In addition to tourism, the program also aims to meet the needs of Brazil’s agricultural sector, particularly in the country’s interior. Many of Brazil’s rural areas, where agricultural production is concentrated, need more transportation infrastructure, which can hinder the efficient transport of goods. Developing new airports in these areas will facilitate faster, more reliable transport links for Brazil’s agricultural exports, significantly contributing to the national economy. By modernizing Brazilian airports in these regions, the government is not only improving accessibility but also supporting the country’s economic backbone.

Addressing Infrastructure Gaps Exposed by the Pandemic

The COVID-19 pandemic highlighted several infrastructure weaknesses, particularly in Brazil’s remote areas, where access to healthcare services was severely limited. In the Amazon region, where geographical challenges and limited transport options create barriers to timely medical assistance, the government has prioritized the construction of at least ten new airfields. These new facilities will improve regional access to essential services and provide emergency response capabilities that were previously unavailable in these remote areas. The government hopes to strengthen the national infrastructure network and improve resilience against future crises by modernizing Brazilian airports in underserved regions.

Moving Forward: Brazil’s Vision for a Modernized Airport Network

This unprecedented investment program signals Brazil’s commitment to modernizing airports as part of a broader strategy to build a more integrated, accessible, and resilient transport network. The program aims to set a new standard for airport infrastructure in Latin America by upgrading facilities, enhancing passenger services, and expanding connectivity. As Costa Filho emphasized, this initiative will play a key role in driving economic growth, supporting the tourism and agriculture sectors, and ensuring that all Brazilians benefit from improved access to transportation.

With details of the complete program expected by year-end, the Brazilian government’s efforts to modernize its airport infrastructure underscore a long-term vision of creating a world-class transport system that is both inclusive and sustainable.

Uruguay has once again established itself as a regional leader in the International Property Rights Index (IPRI), ranking first in Latin America and 25th worldwide. This recognition comes from a report by the Center for Development Studies (CED), in collaboration with the Fraser Institute, which evaluates each country’s legal environment, physical property rights, and intellectual property rights.

The IPRI, a measure of a country’s ability to protect property rights, is a crucial aspect of socioeconomic development. In the 2024 report, Uruguay’s overall score of 6.4 out of 10, a one-point increase from the previous year and a four-place jump in the global ranking, is a clear sign of progress. This improvement underscores Uruguay’s strengthening institutions and its commitment to a stable legal environment, making it a beacon of hope for intellectual property rights in Latin America.

Uruguay’s performance in the IPRI is particularly impressive in the Legal and Political Environment (LP) category, where it scored 7.5 points, placing 19th globally. This indicator, which measures factors such as government transparency, political stability, and judicial effectiveness, is a testament to Uruguay’s commitment to ensuring the security of property rights. The report’s revelation that Uruguay improved its performance in this area by 10% is a clear sign of the country’s progress in institutional quality and its ability to attract foreign investment

Uruguay’s progress is internal and reflected in its international perception. The country is increasingly seen as a reliable investment destination, a fact underscored by a spokesperson for the CED. This confidence is built on Uruguay’s institutional stability and respect for the rule of law, making it a model of transparency and effective governance in Latin America, especially in a context where other countries in the region face political and economic challenges.

Physical and Intellectual Property Rights: Areas for Improvement

In addition to its leadership in the legal environment, the IPRI report evaluates Uruguay in the categories of Physical Property Rights (PPR) and Intellectual Property Rights (IPR). The country scored 6 points in physical property rights, ranking 35th worldwide. This aspect pertains to the protection of physical assets, such as land and property, and mechanisms to resolve disputes in this area. While Uruguay shows strength in this category, it continues to face challenges compared to developed countries, where physical property rights are even more robust.

Regarding intellectual property rights, a vital element in attracting tech and creative industries, Uruguay scored 6.2 points, achieving the 44th position in the global ranking. Intellectual property rights in Latin America are essential for fostering innovation and attracting companies in the technology and creative sectors. While the country has shown progress, further improvement is needed to keep pace with global standards and ensure more robust protection of intellectual property rights, especially in the digital era.

Uruguay’s leadership in intellectual property rights in Latin America is particularly notable compared to other countries in the region. The 2024 report surpassed Chile, which ranks 38th with a score of 5.9, and Costa Rica, which holds the 39th position with 5.8 points. Countries like Panama, Brazil, and Argentina also rank below Uruguay, highlighting the gap in the region’s commitment to property rights security. This privileged position allows Uruguay to stand out as an attractive destination for international investment, particularly compared to other Latin American economies facing more significant challenges in ensuring legal certainty for intellectual property rights.

Uruguay: A Model for Sustainable Development

The growth in property rights protection in Uruguay strengthens its appeal for foreign investment and drives internal economic development. Protecting property rights, including intellectual property rights in Latin America, is essential to creating an environment where individuals and businesses can thrive. According to the CED, Uruguay’s property rights index has shown an upward trend over the last 15 years, primarily driven by improvements in the legal and political environment.

Moreover, legal certainty in property rights directly impacts the country’s sustainable development, encouraging investment in critical sectors such as infrastructure, technology, and agriculture, which are crucial to the Uruguayan economy. “Protecting property rights ensures that resources are used efficiently and that investors have confidence in the country’s future,” stated the CED in its report on intellectual property rights in Latin America.

Despite these significant advancements, Uruguay still faces physical and intellectual property rights challenges. Improvement in these areas will be crucial to maintaining its position in the IPRI and advancing toward higher global rankings. With the growing digitalization of the economy, strengthening intellectual property rights will be essential to attracting innovative companies and protecting the work of Uruguayan creators.

Greater collaboration with international organizations and countries leading in intellectual property rights is essential to exchange experiences and enhance local practices. According to the CED, improving intellectual property laws and implementing advanced technologies to protect physical property rights are areas where Uruguay can innovate and strengthen its regulatory framework.

Uruguay’s performance in the 2024 International Property Rights Index confirms its leadership in intellectual property rights in Latin America and highlights its commitment to legal security and institutional stability. With a leading position in the region and a favorable business environment, the country continues to be a reference in intellectual property rights in Latin America. However, improving physical and intellectual property rights is fundamental to sustaining this growth and consolidating its position globally.

Conclusion

Uruguay’s rise to the top in intellectual property rights within Latin America underscores its dedication to creating a secure and transparent environment for local and foreign investors. As demonstrated by its performance in the International Property Rights Index, Uruguay’s strength lies in its solid legal and political framework, which is a bedrock for economic stability and growth. This institutional robustness attracts foreign capital and fosters a favorable climate for innovation, allowing industries like technology and agriculture to flourish. However, for Uruguay to maintain its leadership and further enhance its global standing, it must address ongoing physical and intellectual property rights challenges. Strengthening protections, particularly in an increasingly digital economy context, will be vital in keeping pace with global standards and ensuring comprehensive coverage for intellectual property assets. Uruguay can bolster its regulatory framework and remain competitive in an evolving global market by collaborating with international organizations and adopting best practices from countries that excel in property rights. As Uruguay advances its commitment to legal certainty and innovation, it sets a standard for other Latin American countries, highlighting the crucial role of stable governance and effective property rights protections in sustainable economic development. Moving forward, Uruguay’s focus on these enhancements will be instrumental in solidifying its reputation as a model of institutional reliability and sustaining its growth trajectory within Latin America and beyond.

Honduras, positioned as a gateway between North and South America, offers a unique blend of strategic location, workforce availability, and access to diverse markets. Companies considering doing business in Honduras should carefully assess various factors influencing its economic and operational environment. This guide provides an overview of the primary considerations for establishing and running a successful business in Honduras.

Economic Stability and Inflation

Economic stability is not just a factor but a crucial strategic consideration for businesses in any market. Honduras has experienced moderate economic growth in recent years, bolstered by its agricultural and manufacturing sectors. However, knowing the latest inflation trends is not enough. Businesses should actively assess and project how economic fluctuations could influence their operations. This proactive approach and consulting financial analysts can provide valuable insights and help companies make informed decisions.

Regulatory Environment

While improving, the regulatory environment in Honduras still presents significant challenges for foreign companies. Understanding and navigating the country’s regulatory framework, which includes legal requirements for business registration, operational permits, and environmental compliance, is not just important but crucial. While Honduras has taken strides to simplify business regulations, some industries may face additional requirements. Companies should be prepared for the necessary steps to acquire licenses, understand the country’s trade regulations, and ensure compliance with Honduran laws to avoid legal complications. This caution and thorough preparation can help companies navigate the regulatory landscape more effectively.

Taxation Regime

Understanding the taxation regime is essential for managing costs effectively. Honduras imposes taxes on income, value-added goods, and services. The corporate tax rate is generally around 25%, with additional taxes applicable depending on the nature of the business. Companies must be prepared to navigate the tax structure, as compliance with tax regulations is critical to maintaining a favorable business standing. Engaging with local tax experts or consultants can be advantageous when doing business in Honduras, as they can offer guidance on tax obligations, exemptions, and deductions that may apply to specific sectors.

Labor Market and Laws

A young, eager workforce characterizes the labor market in Honduras, but companies must understand local labor laws. The country has specific regulations around minimum wage, working hours, overtime pay, and employee rights. Businesses should be mindful of the labor code to avoid potential disputes. Labor unions are also prevalent in certain sectors, and companies should be prepared for collective bargaining. Companies with a presence in Honduras will benefit from staying informed about labor legislation updates and ensuring compliance with all regulations.

Political Climate and Stability

Honduras has a complex political landscape that can impact the business environment. While the government encourages foreign investment, changes in administration can result in shifts in policy priorities. Businesses should closely monitor political developments and evaluate how these changes may affect their operations. Establishing a presence in Honduras may require navigating political considerations, particularly for industries closely tied to government regulations or services. Partnering with local advisors is often beneficial for staying attuned to the political climate when doing business in Honduras.

Currency Controls and Import/Export Restrictions

Honduras operates with the Lempira (HNL) as its currency. While currency conversion is relatively stable, businesses must understand any restrictions on currency exchange and repatriation of profits. Currency controls may occasionally impact operations and financial planning. Additionally, companies must familiarize themselves with import and export restrictions. Specific goods may face tariffs, quotas, or regulations affecting sourcing and distribution strategies. Companies should ensure compliance with customs regulations to prevent delays or penalties, an essential aspect of doing business in the country.

Infrastructure and Logistics Connectivity

Honduras has invested in infrastructure, especially in roads, ports, and airports, which are crucial for businesses with supply chain needs. However, some areas still lack adequate connectivity, potentially impacting logistics efficiency. The port of Puerto Cortés, one of the most important in Central America, provides valuable access for import and export activities. Businesses should assess the transportation network and logistics infrastructure to determine whether it aligns with their needs, as it can significantly impact operational costs and delivery times when conducting business in Honduras.

Industry-Specific Opportunities and Challenges

Honduras offers sector-specific opportunities, particularly in manufacturing, textiles, and agriculture. The country has a strong position in the apparel sector, owing to its proximity to the U.S. and competitive labor costs. Agribusinesses benefit from favorable conditions for crops like coffee, bananas, and palm oil. However, industries also face challenges, such as competition and market saturation. A market analysis is recommended for any company exploring doing business in Honduras, as understanding sector-specific trends is essential for identifying potential growth areas and challenges.

Foreign Direct Investment (FDI) Incentives

Honduras has introduced a range of FDI incentives to attract international businesses. Special Economic Zones (ZEDEs) offer benefits such as tax exemptions, reduced duties, and flexible labor regulations. These incentives can be highly advantageous, especially for industries like manufacturing and logistics. Companies should investigate whether they qualify for these benefits, as FDI incentives can significantly reduce operational costs and enhance profitability. When doing business in Honduras, understanding the available FDI incentives can substantially affect financial planning.

Trade Agreements and International Relations

Honduras participates in various trade agreements that facilitate access to international markets. The Central American Free Trade Agreement (CAFTA-DR) with the United States is particularly beneficial, providing tariff-free access to U.S. markets for specific products. Additionally, Honduras is a member of the Central American Integration System (SICA), which promotes regional cooperation and trade. Companies considering establishing a presence in Honduras should evaluate these trade agreements to leverage tariff reductions and streamlined export processes for their goods.

Energy Supply and Costs

Energy availability and costs are crucial for industries with high energy demands. Honduras relies on a mix of hydropower, thermal, and renewable energy sources. However, businesses may encounter fluctuations in energy costs and potential power shortages in certain regions. Companies should assess their energy requirements and explore partnerships with local energy providers. Understanding the local energy landscape is essential for energy-intensive sectors to ensure reliable and cost-effective power supply when doing business in Honduras.

Legal System and Dispute Resolution

Honduras’s legal system is based on civil law, and foreign businesses may encounter challenges navigating its legal framework. Resolving business disputes can be time-consuming, so companies should familiarize themselves with local laws and dispute-resolution methods. Arbitration is commonly used for commercial disputes, providing an alternative to lengthy court processes. It is advisable for businesses doing business in Honduras to engage legal professionals who can offer guidance on contracts, dispute resolution, and other legal matters.

Intellectual Property Protection Laws

Protecting intellectual property (IP) is essential for businesses across industries. Honduras has established IP laws, but enforcement can vary, and counterfeiting remains a concern in some sectors. Companies should take proactive measures, such as registering trademarks and patents, to safeguard their IP assets. Engaging a local IP attorney can help ensure compliance with Honduran regulations and provide guidance on IP protection strategies, which are critical when doing business in Honduras.

Environmental Regulation

Environmental sustainability is becoming increasingly important, with the government implementing regulations to reduce environmental impact. Businesses in manufacturing, agriculture, and energy sectors should be aware of these regulations, as compliance may require adopting sustainable practices. Companies should assess their environmental responsibilities to ensure they meet regulatory standards. When doing business in Honduras, understanding environmental requirements can help companies align with local laws and global sustainability goals.

Market Demand and Competition

Market demand varies by industry, and companies should conduct thorough market research to gauge local consumer preferences and demand trends. In Honduras, consumer goods, electronics, and telecommunications sectors have shown promising growth. Additionally, competition from local and international companies can be a significant consideration. Companies should evaluate market saturation levels, consumer behavior, and competitors to make informed decisions about their business strategy. Tailoring products and services to local needs is essential for successful market entry in Honduras.

Cultural and Language Considerations

Understanding cultural nuances is fundamental for establishing solid relationships with customers, employees, and business partners. Spanish is the primary language in Honduras, and companies are encouraged to employ bilingual staff for smoother communication. Additionally, understanding business etiquette and social customs can positively impact interactions with local stakeholders. When doing business in Honduras, respecting cultural differences can help build trust and foster effective partnerships, contributing to the overall success of the venture.

Conclusion

Thorough research and strategic planning are crucial for companies considering doing business in Honduras. Understanding the country’s economic conditions, regulatory landscape, labor market, and cultural context can help companies better navigate the complexities of operating in Honduras. This guide outlines the key areas companies should explore to ensure a successful and sustainable presence in the Honduran market. From regulatory compliance and labor laws to market demand and cultural insights, each factor is integral to achieving a rewarding experience when doing business in Honduras.

German auto parts companies have significantly boosted their investments in Mexico this year, reaching an unprecedented level. According to Francisco González, Executive President of the National Auto Parts Industry (INA), German investment in Mexico’s auto parts sector has surged in response to strong demand from some of the world’s top automakers based in the country, including BMW Group and General Motors. This marks a critical expansion for German companies, which are increasingly central to the country’s thriving automotive manufacturing industry. This surge also aligns with Mexico’s emerging role as a hub for nearshoring, drawing in companies globally to meet demand closer to the United States.

A Record-Breaking Investment Surge

In the first half of 2024, investment in Mexico’s auto parts sector reached an all-time high. German firms supplying manufacturers like BMW in San Luis Potosí and Volkswagen, Audi, and Stellantis in other states have ramped up their orders significantly. Francisco González noted that the contribution from German companies in the sector has reached approximately 47% of the total foreign investment inflow, indicating substantial confidence from Germany in Mexico’s potential. “This semester, Germany has invested more in Mexico than ever, making up nearly half of the investments in this sector,” he commented.

The auto parts industry in Mexico saw a total foreign direct investment (FDI) influx of $1.634 billion during the first six months of 2024, with German investment accounting for a substantial 47.3%. Japan followed with 20.2%, and South Korea with 11%, showcasing Germany’s leading role. German investment is evident not only in terms of scale but also in terms of long-term commitment to the country’s industrial growth.

Diverse Investment Destinations Across Mexico

Several key states are among the regions benefiting from this investment increase in Mexico. From January to June 2024, German companies across various sectors, not limited to auto parts alone, invested $4.167 billion, the highest level on record, according to data from Mexico’s Secretariat of the Economy. Much of this investment has flowed into states like Puebla, San Luis Potosí, and Jalisco, highlighting Mexico’s appeal beyond the traditional industrial hubs.

San Luis Potosí, in particular, has emerged as a hotspot for growth in auto parts production. According to INA, the state’s industry saw a 10.37% increase in output from January to July 2024, outpacing even Nuevo León, another central industrial region. The concentration of German investment in Mexico is especially apparent here, with German automakers and their suppliers expanding their presence to support local and regional manufacturing needs.

Strengthening Automotive Supply Chains

The German investment extends beyond monetary contributions; it reflects a commitment to developing robust automotive supply chains that benefit both countries. Francisco González highlighted ongoing efforts to attract additional investment from potential suppliers in Germany and other European nations. “We are incorporating more suppliers and expanding in-depth. BMW’s growth continues, and we are seeing increased sales of auto components across the board, particularly in interior, electrical, electronic, and safety segments,” he noted. San Luis Potosí’s position as a critical location for German investment in Mexico has benefited from the presence of BMW and consistent contributions by General Motors.

These developments underscore Mexico’s central role in global supply chains, particularly as German companies respond to demands for high-quality auto parts across the Americas. German investment in Mexico increasingly focuses on expanding manufacturing capacities to meet these needs while positioning Mexican-based facilities as pivotal production centers for North and South American markets.

Government Support Boosts Investor Confidence

A critical factor supporting this wave of German investment in Mexico has been the Mexican government’s open stance toward foreign investment, particularly under the leadership of Marcelo Ebrard, Mexico’s current Secretary of Economy. González praised the government’s willingness to engage with the automotive industry, emphasizing that their proactive approach has been essential in attracting German and other foreign investors.

“The openness of the new government has been clear. They are putting in significant effort to support where investments are landing, especially in the northern border region, the Bajío area, and the central regions,” González explained. With this supportive environment, the conditions for German investment in Mexico appear favorable for continued growth, especially as companies look to optimize their operations through proximity to the United States.

‘China Plus One’ Strategy: Reorienting Supply Chains

The global shift towards regionalization and the “China Plus One” strategy has also encouraged companies to consider Mexico an alternative or complementary manufacturing base to China. According to González, approximately 65 multinational firms from around the world have reoriented their production strategies this year to include Mexico, attracted by factors like lower production costs and proximity to the U.S. This includes not only German companies but also firms from France, Switzerland, the United States, and Canada.

This trend is particularly relevant for German investment in Mexico, as German companies join this wave of manufacturing diversification, moving operations closer to key markets in the Americas. “These companies once based in China are now looking to produce near the United States, recognizing Mexico as a crucial point in this strategy,” González remarked. German manufacturers mainly find Mexico attractive for its cost-competitive workforce, established infrastructure, and favorable trade conditions under agreements like the United States-Mexico-Canada Agreement (USMCA).

Expanding the Supplier Ecosystem

In addition to attracting multinational giants, German investment in Mexico has catalyzed growth within the local supplier ecosystem. German auto parts manufacturers bring specialized knowledge, technology, and industry standards that enrich Mexico’s domestic manufacturing base. This ecosystem expansion is particularly vital for sustaining the complex supply chains required by major automotive brands.

Moreover, Mexican suppliers benefit from the advanced technological demands and quality standards that German firms introduce, fostering a higher caliber of production across the sector. This partnership enhances Mexico’s position as a supplier of high-value-added products in the automotive industry. It strengthens its capacity to support German companies looking to meet demand from American and Canadian markets.

Looking Forward: A Bright Outlook for German Investment

With increasing opportunities for German investment in Mexico, the country appears well-positioned to maintain its role as a preferred destination for European and global manufacturers. Mexico’s strategic geographic location, favorable trade policies, and active government support continue to make it a magnet for companies seeking to streamline supply chains and expand into the North American market.

In conclusion, German investment in Mexico has achieved historic levels, driven by solid demand from the automotive sector and the strategic advantage of manufacturing near the United States. This trend shows no signs of slowing as more German firms eye the Mexican market for future growth, bringing capital, valuable expertise, and advanced technology that benefit the local economy and foster a more integrated and efficient regional supply chain.

Peru’s favorable tax policies and strategic trade agreements are increasingly positioning the country as a top destination for Brazilian investment in Peru by companies seeking to expand their reach in Latin America. Boasting trade agreements with over 50 countries—including the United States, China, and members of the Asia-Pacific Economic Cooperation (APEC)—Peru provides a streamlined route for Brazilian businesses aiming to tap into major global markets. This extensive network and targeted tax incentives foster a robust investment climate that continues to draw Brazilian investment.

The Brazil-Peru Chamber of Commerce (CAMBRAPER) facilitates business ventures between the two nations. A recent Business Breakfast titled “Taxation in Brazil and Peru: Key Considerations for Business Ventures,” organized in a hybrid format spanning São Paulo and Peru, is a testament to this. Experts at this event explored various available tax advantages, highlighting these incentives’ critical role in attracting cross-border capital and facilitating economic collaboration.

A Competitive Tax Environment in Peru

Peru’s tax framework offers a relatively competitive and predictable environment compared to its regional counterparts. With structured corporate taxation around a 29.5% Corporate Income Tax rate and an 18% General Sales Tax (IGV), Peru’s tax structure enhances its attractiveness. It provides a predictable tax structure for Brazilian investment in Peru by companies weighing the cost benefits of expanding their operations.

One of the most influential tax incentives driving this investment flow is the Agreement to Avoid Double Taxation between Peru and Brazil. This agreement significantly reduces the impact of double taxation on cross-border business activities, ensuring that income earned through services provided by Brazilian companies from abroad is taxed at a reduced rate in Peru. Typically, such foreign services might incur a 30% withholding tax; however, this treaty capped withholding at 15%. This adjustment substantially lowers the tax burden on Brazilian investments, providing businesses with greater legal certainty and stability.

According to Indira Navarro Palacios, Senior Partner at Torres y Torres Lara Abogados, this treaty represents a vital measure for Brazilian investors, granting them confidence in the fiscal environment and reducing potential tax-related risks. Navarro Palacios emphasized that this provision, combined with other regulatory frameworks, places Peru in a favorable light for companies looking to optimize their tax strategy while expanding their operational footprint in Latin America.

The Strategic Importance of Chancay Port

The ambitious development of Chancay Port, located approximately 80 kilometers north of Lima, adds to Peru’s appeal as an investment destination. This port will become a central commercial hub connecting Latin America and Asia. With an investment of over $3.6 billion, the port project is set to significantly enhance Peru’s trade capacity and regional competitiveness, offering Brazilian investment in Peru a vital logistics gateway to Asian markets.

As the construction of Chancay Port progresses, Brazilian firms are increasingly drawn to its possibilities. Antonio Castillo Garay, General Manager of the National Society of Industries (SNI) in Peru, highlighted the substantial benefits the port will bring to Brazilian exporters and manufacturers. “Chancay Port has the potential to become a crucial center for Latin American trade with Asia, allowing Brazilian investment in the country to access Asian markets with greater ease and cost efficiency,” he said.

The port project supports trade flows and aligns with Peru’s broader goals of enhancing its infrastructure and logistics capabilities. Brazilian companies stand to benefit from improved shipping routes, reduced transportation costs, and streamlined access to supply chains. These factors make Brazilian investment in Peru an attractive hub for companies looking to position themselves closer to key international markets while leveraging Peru’s logistical strengths.

Peru as a Growing Center for Nearshoring

Peru’s strategic location and evolving infrastructure make it a prime candidate for nearshoring, a trend in which companies relocate manufacturing closer to key consumer markets, such as North America and Asia. This shift has spurred Brazilian investment in Peru, as companies consider it a destination for optimizing their supply chains. Nearshoring offers numerous advantages, including shortened delivery times, reduced costs, and minimized geopolitical risks.

Antonio Castillo Garay of the SNI noted that Peru is solidifying its international outsourcing and assembly center role, drawing interest from Brazil, Asia, and North America businesses. Key sectors such as infrastructure, metallurgy, and agribusiness present particularly lucrative opportunities for investment by firms seeking to diversify their operations in Peru. “Peru’s economic landscape offers robust growth prospects for Brazilian companies looking to streamline operations and capitalize on favorable production conditions,” Castillo Garay explained.

Leveraging Trade Agreements for Competitive Advantage

Peru’s extensive network of trade agreements is another crucial factor propelling Brazilian investment in Peru. With trade pacts involving over 50 countries, Peru grants Brazilian companies direct access to markets with reduced tariffs and simplified customs procedures. Notable agreements with major economies like the United States, China, and various APEC members grant Brazilian businesses a competitive edge by facilitating access to high-demand markets and creating opportunities for export growth.

These agreements significantly lower trade barriers, making it easier for Brazilian companies to establish production facilities or distribution channels in Peru. For instance, Brazilian agro-industrial firms can export Peruvian-manufactured goods to the U.S. under favorable terms, leveraging Peru’s access to the North American market. Similarly, Brazilian firms engaged in technology or manufacturing can use Peru as a strategic base for expanding into Asia through streamlined trade routes and customs processing enabled by Peru’s APEC membership.

CAMBRAPER: Strengthening Bilateral Economic Ties

The Brazil-Peru Chamber of Commerce (CAMBRAPER) is pivotal in fostering economic relations between the two countries. CAMBRAPER actively connects Brazilian and Peruvian businesses, promoting trade opportunities, organizing events, and facilitating business discussions to nurture a stable environment for Brazilian investment in Peru. Through initiatives like the recent Business Breakfast event, CAMBRAPER provides valuable resources and networking channels for companies interested in exploring cross-border ventures.

The chamber’s work underscores the mutual benefits of investments in Peru, not only for the businesses themselves but also for broader regional development. By supporting such collaboration, CAMBRAPER aims to strengthen the commercial ties between Brazil and Peru, creating a lasting foundation for economic integration in Latin America.

Outlook for Brazilian Investment in Peru

With its competitive tax regime, robust trade network, and strategic infrastructure projects, Peru presents an increasingly compelling case for Brazilian investment in Peru. Key incentives, like the tax treaty and the Chancay Port project, create a favorable environment for businesses seeking to expand into new markets while enjoying tax efficiencies and logistical benefits. Moreover, Peru’s commitment to nearshoring and integration with global trade partners aligns well with the operational goals of Brazilian companies pursuing growth in a post-pandemic, supply chain-sensitive economy.

As CAMBRAPER and industry leaders like Torres and Torres Lara Abogados continue to underscore the opportunities for Brazilian investment in Peru, bilateral investment looks promising. Peru is poised to maintain its status as a strategic, tax-efficient destination for Brazilian businesses, drawing them closer to global markets and fostering a thriving environment for Latin American economic cooperation.