The foreign direct investment environment in Latin America continues to change and presents multiple complexities. Certain countries in the region show promise because of their economic potential and natural resources, together with skilled labor forces, but other countries face challenges that undermine investor confidence. The best countries to invest in Latin America often exhibit a blend of macroeconomic stability, export diversification, and a strong institutional framework. Brazil and Mexico continue to be the top investment destinations in Latin America, according to the 2025 Foreign Direct Investment Confidence Index from Kearney. The global rankings for both Brazil and Mexico decreased when compared to their positions in the previous year. The only regional country to show progress was Colombia, which reflected a change in investor outlook.
Latin America’s Top Investment Destinations in 2025
Investors view Brazil and Mexico as the best countries to invest in Latin America in 2025, although both countries experienced decreases in their international rankings. The Kearney index rankings for the top 25 FDI destinations saw Brazil fall to 21st place from its previous year ranking, while Mexico reached its lowest ranking at 25th.
Both nations maintain their appeal to investors because of their sizable domestic markets alongside their abundant resources and established manufacturing sectors. Global investors appear to focus more on political stability and regulatory reliability than market size alone when evaluating potential investment opportunities.
The Rise of Colombia
Colombia emerged as the sole Latin American country to advance in this year’s Kearney ranking by reaching the 20th position. This positive shift demonstrates increased investor trust in Colombia’s economic strategies and infrastructure modernization initiatives. The advancement of Colombia proves that maintaining steady policies along with economic changes can create major positive outcomes even when regional conditions are challenging.
According to Kearney’s analysts, developed markets hold 19 out of the top 25 positions in global rankings which indicates investor preference for established market stability during times of geopolitical and economic uncertainty. Colombia’s rising position signals that the best countries to invest in Latin America are not always the largest markets, but those making strategic reforms and modernizing infrastructure.
Argentina and the Emerging Market Index
Argentina has dropped out of the top 25 global index but still maintains a strong ranking in Kearney’s 2024 list of attractive emerging markets for investment. Argentina holds the ninth position in this subset and continues to attract investors looking for high-risk investment opportunities with potential high rewards. The nation’s unstable economy, alongside its changing regulations, persist as obstacles that prevent progress.
Chile (15), Costa Rica (23), Peru (24), and Uruguay (25) appeared lower on the emerging market index in comparison to Argentina, which shows wider investment competition among Latin America’s secondary markets.
Factors Driving Investment Decisions
According to the report, two factors dominate investor considerations when evaluating where to allocate foreign direct investment: Investors prioritize national economic performance and the efficiency of legal and regulatory processes when choosing investment destinations. The criteria that guide investment behavior demonstrate that investors seek stable institutions and strong economic foundations along with transparent legal frameworks.
Kearney’s analysis reveals that nearly half of the leading investment destinations attribute their appeal to strong economic performance. GDP growth, along with low inflation and sound fiscal policy, stand out as essential factors for attracting global capital flows.
Growing Investment Risks
Various Latin American countries have improved their appeal to international investors, but they also encounter external risks that could obstruct investment inflows. Global investors in 2025 face significant challenges due to increasing commodity prices together with expanding geopolitical tensions.
According to the survey results, 38% of respondents think that increased commodity prices will be the most probable global situation next year. The percentage of respondents who predict increasing geopolitical tensions reached 35%, which demonstrates a seven-point increase from 2024. Emerging markets face heightened uncertainty since their dependency on commodity exports leaves them susceptible to global supply chain disruptions and political instability.
Brazil: Still the Regional Powerhouse
Brazil maintains its reputation as the leading nation in its region and remains a top investment choice for investors looking at Latin American markets, despite its recent minor drop in global rankings. Mark Essle from Kearney Brazil states that the country’s ranking drop remained minor because of statistical modifications. Brazil achieved better performance than Mexico while also outperforming India and multiple other emerging economies.
According to Essle, Brazil’s appeal stems from its varied economic capabilities. The nation possesses abundant natural resources, which support prominent mining and agricultural industries. Brazil stands out as a worldwide front-runner in renewable energy and carbon-based economic initiatives, which makes it more appealing as sustainability becomes a global priority.
According to Essle, Brazil attracts international attention for its massive consumer market and attractive investment opportunities, which span both established businesses and new projects. Foreign investors remain attracted to Brazil’s vast territory and future opportunities despite ongoing governmental disagreements about fiscal strategy. Among the best countries to invest in Latin America, Brazil continues to offer scale, diversity, and a pathway toward green economic growth.
A Favorable Business Environment
In addition to its natural resources, Brazil possesses multiple factors that establish its status as one of the best countries to invest in Latin America. These include:
- A relatively skilled labor force.
- The regulatory system provides uniform treatment to both domestic and foreign investors.
- Improving infrastructure and logistics capabilities.
The economy comprises sectors such as manufacturing along with services, energy production, and technological development.
Kearney’s evaluation reveals that these strengths establish Brazil as one of the leading five countries within emerging markets.
A Historic Return to the Rankings
After being absent for 25 years, Brazil reappeared on the FDI Confidence Index starting in 2024. Despite not regaining its early 2000s top-tier status yet, staying listed shows ongoing global investor interest.
Brazil shows that strategic assets and improving governance enable a large market to maintain international capital relevance despite economic and political complexities.
The Broader Latin American Context
Latin America stands out as a region of contradictions amid ongoing changes within the global economy. Certain nations are becoming dependable targets for foreign direct investment, while others face difficulties in sustaining stable economic policies. The best countries to invest in Latin America share common traits: strong economic resilience, clear regulatory transparency, and access to essential markets, while also aligning with progressive global trends including digital transformation and decarbonization efforts.
While Brazil, Mexico, and Colombia receive attention, Chile, Peru, and Costa Rica are building competitive advantages through sustainable practices, innovation, and export diversification. Investors looking for opportunities in Latin America will probably continue to assess companies based on quality and predictability reasons, aside from size alone.
Looking Ahead
Brazil, Mexico, and Colombia represent the best countries to invest in Latin America for 2025 due to their distinctive value propositions in a challenging global market. The Kearney index performance demonstrates the potential opportunities and existing challenges of the Latin American region.
The changing landscape of global economic conditions coupled with rising geopolitical tensions leads investors to monitor Latin America’s leading markets closely. In the upcoming years, regional nations must strengthen legal certainty, improve infrastructure, and expand regional integration, which serve as essential steps to achieve better standings in future international investment rankings.