The South American nation is considering the implementation of another tax-free zone in Argentina, this time targeting retail consumption.

The aim is to encourage shopping, tourism, and commerce in the Argentine interior.

Under the proposed initiative, which is still under discussion by government officials, imported products would be allowed to be sold in certain areas at a reduced tax rate, lowering their final price for consumers.

These types of projects have been implemented around the world and are usually referred to as “duty-free stores” or “tax-free commercial areas.”

“There are many countries that have sought to attract tourism and consumption by creating commercial areas where taxes are reduced,” said one official regarding the proposal.

Improving Consumption through a Tax-Free Zone in Argentina

The officials leading the project are considering it as part of a series of economic measures that seek to:

• Stimulate consumption
• Become more competitive vs neighboring countries
• Attract shoppers and tourists
• Bring forward private investment

As such, the idea behind a tax-free zone in Argentina is tied to broader efforts to liberalize commerce and encourage consumerism.

Tax-Free Zones Explained

A tax-free zone is an area within a country where goods can be imported with few or no customs or tax-related obligations.

These areas, sometimes known as free trade zones or duty-free areas, allow for:

• The tax-free importation of goods
• The reduction or exemption of certain taxes for retailers
• Special regulatory and logistical treatment for businesses

Originally, tax-free zones were established to promote industrial development and exports. Some still function under these rules.

Free trade zones became popular in the middle of the 20th century as countries sought to attract foreign investment.

In recent years, nations have been using these areas to promote consumption. The goal is to develop a shopping destination akin to duty-free outlets found in tourist areas and international airports.

Such areas are now common in Latin America. In Argentina, tax-free zones have been used mostly to promote industrial activity and exports.

Attracting Tourists and Domestic Consumers

Another goal of the proposed retail tax-free zone is to attract Argentines who currently travel abroad to shop.

Cross-border shopping is common in Argentina, especially in provinces that border countries such as Brazil and Uruguay.

By lowering tax rates on retail goods to those encountered in nearby countries, it is hoped that domestic shoppers will begin shopping in Argentina rather than abroad.

“The project seeks to keep domestic consumption inside the country while also attracting foreign visitors,” said an official.

Jurisdictions around the world use tax-free shopping as a means to both keep consumers from shopping abroad and attract foreign tourists.

Tourists can spend their money domestically while taking advantage of well-known brands at lower prices.

Argentina Already Has Tax-Free Areas

Argentina isn’t starting from scratch when it comes to tax-free areas.

The country currently hosts at least two free trade zones. These areas are spread across multiple provinces and have been set up to promote:

• Industrial development
• Exports
• Logistics activity

Free trade zones allow businesses to import raw materials and merchandise without paying customs duties, as long as they follow rules associated with exporting or producing goods.

Likewise, Argentina previously launched duty-free shopping complexes for tourists. The most well-known is located in the country’s Patagonia region.

The shopping mall includes:

• Electronics stores
• Clothing retailers
• Beauty shops
• Furniture outlets
• Among others

As Argentine consumers have changed the way they shop, visiting malls in Argentina is no longer the only option.

E-commerce has boomed in Argentina in recent years, with many shoppers visiting international online stores.

Shoppers can now purchase goods from other countries without leaving their homes, a convenience that has had some domestic retailers crying foul.

Both examples provide key lessons for the proposed tax-free zone.

Regional Developments and Changing Consumption Habits

While cross-border shopping is nothing new in Argentina, something that is fairly new is online shopping from international markets.

Here are three key trends that have affected the retail landscape over the last decade:

• The explosion of e-commerce in Argentina
• The rise of international e-commerce
• New policies that made it easier for Argentines to purchase goods from other countries

Thanks to these factors, many Argentine consumers are now shopping online from other countries.

With that in mind, officials are looking to create a zone that could provide the domestic market with a fighting chance against foreign e-commerce.

How Could a Tax-Free Zone Benefit Argentina?

Retail tax-free zones have the potential to provide numerous benefits to the Argentine economy. These include:

• Encouraging private investment into shopping centers and supporting infrastructure
• Creating jobs within the tax-free zone in Argentina
• Fostering tourism development (hotels, restaurants, etc.)
• Developing commercial hubs outside of Argentina’s traditional strongholds

Tax-free zones can act as catalysts for growth that extend far beyond retail. In many cases, these projects help establish entirely new entertainment and services districts.

Policy Considerations

As with any tax incentive, tax-free zones are not without their downsides.

Risks include:

• Domestic industries being unable to compete with tax-free products
• Domestic retailers being unable to compete with international retailers that can sell within the tax-free zone
• Damage to the local tax base
• Fraud and other unwanted side-effects

For this reason, many governments implement stringent rules when creating these areas.

Policy could include:

• Limits on how much shoppers can purchase within the tax-free zone
• Limits on what types of products can be sold within the zone
• Strict surveillance to ensure that imported goods are not brought back into the country
• Monitoring the flow of goods into these types of zones will be critical to the tax-free zone’s success in Argentina.

Similar Projects Around the World

Argentina is not the first country to implement tax-free zones for retail.

Similar projects can be found all over the world in:

• Airports
• Tourist attractions
• Border towns

Outside of airports, one of the more common examples of tax-free zones can be seen in tourist destinations.

Airport duty-free shops are some of the most recognizable tax-free areas in the world. These stores allow travelers to shop before they leave the country without paying certain taxes.

Over time, this concept has been expanded to include shopping malls in tourist destinations. Tourists can spend their money within the country while receiving discounts on certain goods and brands.

How Will Argentina’s Tax-Free Zone Compare?

It remains to be seen if Argentina will implement a tax-free zone.

If the country decides to implement another tax-free zone in Argentina, it has the potential to create a new retail destination for tourists and Argentine shoppers.

Another tax-free zone in Argentina could:

• Increase tourism
• Spur private sector investment
• Create employment
• Foster regional development

Much of the tax-free zone’s success will depend on how it is implemented.

Some of the factors that will determine its success include:

• How goods can be purchased within the tax-free zone
• Infrastructure and logistical support for businesses within the zone
• Its competitiveness compared to shopping in other countries

Online shopping is continuing to change the way we consume goods. As a result, traditional shopping districts must evolve in order to stay relevant.

Tax-free zones provide one method that countries can use to lure consumers.

Formulating a National Investment Promotion Strategy

The Central American nation is moving forward with the formulation of an Investment Promotion Strategy for the purpose of improving its capacity to promote Honduras as an investment destination. The plan is being led by the National Investment Council (CNI) in coordination with a group of technical specialists from the European Union (EU), who will assist Honduras in defining its value proposition and identifying priority sectors as part of the process.

Authorities and government representatives from Honduras understand the need to position the country as a strategic investment destination among investors worldwide. They have also identified the need to create an orderly process for carrying out actions related to promoting Honduras as an investment destination.

The National Investment Council has established alliances with key sectors of the public and private productive apparatus, as well as multilateral organizations, to begin developing an orderly mid and long-term roadmap with the objective of structuring Honduras as a reliable investment destination.

Workshops Bring Key Economic Actors Together

From March 4th to 6th, the CNI hosted working sessions attended by representatives of important sectors from both Tegucigalpa and San Pedro Sula. These workshops were planned with the purpose of jointly analyzing Honduras’ potential from an investment standpoint and defining the country’s strategy to position Honduras as an investment destination.

Participants in these workshops represented the following:

• Government institutions and ministries
• The private sector
• Productive sectors associations
• International cooperation entities

In total, there were 92 attendees representing 63 companies and institutions involved in creating Honduras’ new investment strategy. This showcases the level of interest that exists among Honduras’ economic actors to improve the perception of Honduras as an investment destination.

International Technical Support from the European Union

The workshop participants were joined by an international team of specialists led by Ramón Tejeiro, Silvana Torres, and Susana Casablanca, who facilitated sessions with the technical team of the National Investment Council (CNI). Topics discussed during these meetings centered around the identification of opportunities, challenges, and strategic opportunities.

These workshops are part of the ongoing collaboration between Honduras and the European Union. In this case, the project ties into the Global Gateway initiative led by the EU.

Global Gateway seeks to promote sustainable investment projects as well as economic development through partnership programs.

The initiative places special focus on promoting investments that seek to provide long-term value as well as ensure the environmental sustainability of partner countries.

“The Global Gateway strategy seeks to accelerate sustainable and viable projects, prioritizing quality, transparency, and environmental care,” said Ramón Tejeiro.

Competitive Advantages of Honduras as an Investment Destination

Honduras boasts several advantages that make it an ideal destination for companies looking to expand their operations throughout the Americas.

Among the main advantages discussed during the workshops are:

• Centrally located within America
• Access to two oceans through logistics corridors
• Various natural resources
• A relatively young workforce

Manufacturing and Export Opportunities

Honduras is also looking to highlight specific sectors in which it has competitive strengths. During the workshops, multiple sectors were identified as priorities for attracting investment.

Key sectors for investment mentioned during workshop sessions:

• Agroindustry
• Electricity
• Transportation
• Manufacturing
• Tourism
• Business services

An investment promotion strategy should identify sectors in which the country has a comparative advantage. By positioning these sectors as pillars of economic development, it will be possible to attract investments that create jobs and contribute to the growth of exports.

Strategic Pillars to Strengthen Investment Promotion

To accomplish this, the CNI has identified 5 pillars that will help strengthen the position of Honduras as an investment destination. They are as follows:

• Promote Honduras internationally as an investment destination
• Prepare bankable projects
• Establish better coordination with institutions
• Facilitate access to financing
• Ensure the business environment is attractive and consistent

Agriculture as a Strategic Sector

During the workshop sessions, the topic of agriculture was discussed at length. Santiago Vélez, representative of the Inter-American Institute for Agricultural Cooperation (IICA), pointed out that this sector is strategic for Honduras’ investment portfolio.

“It is a sector that not only helps us achieve food sovereignty but also allows us to generate exports and employ Honduran citizens,” said Vélez.

Companies interested in investing in Honduras need to know about specific projects they can be involved with. Santiago Herrera, Manager of Economic Policy at COHEP, advised that we need to provide clear and viable projects to catch the attention of investors.

“Investors want to see projects prepared by the country, so they know what they would be potentially investing in,” said Herrera.

Infrastructure and Connectivity Improvements

Improving Honduras’ territorial connectivity is essential for sectors such as tourism. Juan Fernando Carranza, highway coordinator at the Secretariat of Infrastructure and Transportation (SIT), explained that by improving the country’s roads, it could open up more opportunities for tourist attractions and development.

“The construction of highways not only improves the integration of producers with their markets but also allows us to attract tourism through improved access,” said Carranza.

Construction Sector and Employment Opportunities

The construction industry in Honduras recognizes the importance of bringing more investment into the country. David Hércules, representing CHICO, explained that this industry can play a key role in employing Honduran youth.

“When we increase investment in our country, we are not only creating jobs in the construction industry but across the entire economy,” said Hércules.

Tourism as a Driver of Economic Growth

Representatives from the Tourism sector had the opportunity to share their perspectives on positioning Honduras as an investment destination. Aracely Alvarado, representative of the Honduras Convention and Visitors Bureau, mentioned that increased tourism brings numerous benefits to the country.

Tourism takes advantage of other sectors such as transportation, hospitality services, and more to further drive economic activity.

“We have to continue improving our efforts to position Honduras as a tourist destination,” said Alvarado.

Better air connectivity was mentioned as an important factor to increase tourism. Airlines are often the first point of contact that foreigners have with Honduras and other countries around the world.

For this reason, improving the country’s airport infrastructure and air connections to international destinations is also part of the strategy to position Honduras as an investment destination.

International Promotion and Investment Outreach

As part of the strategy to position Honduras as an attractive investment destination, CNI and the EU team will continue to work on international promotion activities. Some of these activities may include:

• Investment forums
• Business alliances
• Investment missions to key financial centers
• Meetings with institutional investors

These types of activities will allow Honduras to make its voice heard in the most important investor platforms around the world. By telling Honduras’s story, the country aims to successfully position itself as a competitive and reliable investment destination.

Central America closed 2025 with an estimated GDP growth of 3.2%, underpinned by economic recovery indicators. This is reflected in data compiled by ADEN International Business School, whose regional estimate places growth above 3% by year-end.

The organization points out that this projection takes into account the gradual normalization of tourism activities and remittances, as well as the strong pace presented by the services sector.

“Activity has been marked by high interest rates globally and continued volatility in supply chains,” says the report Economic Trends in the Central American Region and El Salvador 2025–2026. However,  the Central American economy “has exhibited moderate resilience amid global market volatility.”

Likewise, the study highlights that the region closed 2025 by containing inflationary pressures recorded since the pandemic; thus, projections place this indicator in a year-on-year average rate of 2.6%.

El Salvador was one of the countries with the lowest inflation

For its part, inflation in the Central American economy of El Salvador stood out as one of the lowest rates in the region, with an annualized rate of 0.91%, a factor that benefits price stability and increases the confidence of investors and financial analysts.

Sources of Growth for Central America’s Economy

Regional growth is based mainly on “the services sector, the sustained recovery of tourism activity after the pandemic, and remittances,” report the consultants at ADEN Business School. These three factors “fuel domestic consumption” in countries where funds sent from abroad represent more than 20% of GDP, as in Guatemala, Honduras, and El Salvador.

Structural elements have favored the upward trend of the Central American economy, especially those economies that have been able to diversify their exports and expand their presence in foreign markets. The main ones are:

• Tourism has reopened strongly after the pandemic. This sector was impacted by restrictions on international travel but has recovered strongly, boosting economies such as Costa Rica, Panama, and the Dominican Republic.
• Remittances remain strong in Central America, especially those sent from the United States. These resources represent a substantial contribution to household income and therefore boost domestic demand.
• Business process outsourcing. Several Central American countries have managed to attract call centers and services for IT outsourcing. The industry has grown in the region and continues to offer new opportunities in digitization and support services.

ADEN analysts report that “tourism has been essential to reactivate SMEs after the health emergency.” Hotels, restaurants, taxi drivers, and tourist guides have experienced a gradual recovery, allowing companies in this sector to increase their payroll.

Technology services have also continued to grow in the region. Costa Rica, Panama, and El Salvador have managed to create specialized service platforms that offer services such as multilingual call centers, software development companies, and digital banking services to international clients.

Foreign investment finds a haven in Costa Rica and Panama

Costa Rica and Panama have been the countries most capable of attracting foreign investment to the Central American economy, mainly in technology and logistics projects. “The reconfiguration of global supply chains and geostrategic positioning” has become a determining factor in welcoming capital and projects with added value in both nations.

Multinationals have begun to include the region within the framework known as nearshoring. By this term, companies are referred to that seek to relocate their operations closer to North American territory, strengthening economies such as Costa Rica and Panama, which offer competitive labor and a stable legal framework.

Projects that have stood out in recent years include:

• Medical devices and specialized manufacturing.
• Logistics projects and warehousing close to the Panama Canal.
• Innovation centers and technology services.
• Projects related to renewable energies such as wind and solar farms, and geothermal.

Costa Rica, for example, has become a benchmark in attracting high-tech projects and medical device manufacturing. On the other hand, Panama continues to take advantage of its logistics capacity and project development next to the Panama Canal.

El Salvador bets on citizen security and digital transformation

On the other hand, El Salvador closed 2025 driven by two major government initiatives focused on citizen security and financial digitalization. Preliminary results published by the Central Reserve Bank (BCR) indicate that the Salvadoran economy grew 5.1% in the third quarter of 2025.

This growth was led by investment, both private and public, especially in the construction sector, which grew by 27.1% during the referenced quarter.

Other sectors that have helped the Salvadoran economy maintain annual growth are:

• Transportation services
• Administrative and support services
• Financial services
• Manufacturing industries

Government support and initiatives linked to public security and digital transformation have helped improve confidence among investors and the local population. Security, in particular, has been key to attracting visitors, real estate investment, and entrepreneurs.

Public debt, however, is one of the factors that must be monitored in the short and medium term. At the end of 2025, public debt reached 89% of GDP, “which should continue to be monitored in the short and medium term,” warns the central bank.

Structural challenges to improve in Central America

Central America is starting to grow, but the region still faces major structural challenges. Productivity levels, access to education, and infrastructure development are issues that set Central American countries apart from other emerging economies.

• A series of obstacles stand out among these challenges, including:
• Low labor productivity, especially in agriculture and traditional manufacturing.
• High levels of inequality between countries.
• Insufficient or deteriorated infrastructure, such as ports, roads, and energy plants.

Political instability affects growth and investment in countries such as Nicaragua and Honduras.

“In addition to growing,” points out Gustavo Riveros Sachica, director of ADEN’s Master’s in Strategic Development, “what we need to do is transform that growth into sustainable productivity and quality employment.”

Salvadoran authorities now have the opportunity to increase investment in sectors other than remittances. “It has a historic opportunity to attract long-term industrial projects because it already has stability and has improved its security perception.”

What does the future hold for Central America?

Forecasts for economic growth in Central America are favorable for the coming years. Expansion will be relatively flat but steady throughout the region.

The region will continue to rely heavily on domestic demand, but increased foreign investment and tourism will provide a fillip to growth rates.

Countries like Costa Rica, Panama and Honduras have the opportunity to continue developing their education systems, improve productivity, and attract investment in sectors such as technology, advanced manufacturing and logistics.

If successful, these reforms could convert Central America into a highly competitive region for investment and one of the main destinations for services, logistics projects and high-tech industries in Latin America.

Spending cuts, corporate tax reductions, and the easing of permitting requirements are part of a package of measures the government seeks to spark Chile’s economic takeoff.

The economic agenda in Chile under President José Antonio Kast combines fiscal austerity, investment incentives, and tax adjustments with the aim of restoring growth and strengthening confidence in the country’s economy. His program includes cuts in public spending, reductions in corporate taxes, and measures to accelerate investment permitting, in a context marked by expectations of economic recovery and internal political challenges.

Marking a clear departure from his two predecessors, the new president of Chile, the ultraconservative José Antonio Kast, decided that he will reside in the Palacio de La Moneda rather than in a residence financed with state funds—an action that could signal austerity as one of the defining features of his administration, which he described during his campaign as an “economic emergency” government.

The announcement has been well received by Chileans, who trust that Kast will fulfill his promise to reinvigorate key areas such as:

• Economic growth and productivity
• Greater efficiency within the public sector
• Improved security and public order

These are three of the issues that most concern the inhabitants of a nation that has long displayed one of the most stable economic performances in the region and that, despite its shortcomings, continues to be perceived as a model for its neighbors.

In other words, the new president will do everything possible to return Chile to its pre-2019 state, when the social upheaval that erupted in September destabilized the social and economic foundations that had underpinned its reputation as an advanced country, although he must do so in the midst of a turbulent global environment and persistent domestic tensions.

Lowering expectations

Although his characteristic determination remains unchanged, José Antonio Kast appears to have understood that moderation is an indispensable quality in political discourse. Perhaps for that reason, he has recently repeated the phrase “don’t ask us for miracles,” alluding to the fact that solving Chile’s structural challenges will not happen overnight.

“The most complex challenges for the new government will probably have to do with managing expectations,” says Arturo Garnham, a partner at the Santiago-based firm Garnham Abogados. His opinion aligns with that of several analysts who believe that the economic agenda in Chile will require patience from investors and citizens alike.

According to Garnham, the new occupant of La Moneda must generate confidence, and this requires stabilizing the political ground on which he operates. Key political challenges include:

• Determining whether the political opposition will support or obstruct the government’s policy agenda.
• Ensuring that government officials possess the political skills needed to avoid unnecessary conflicts.
• Maintaining stable relations with business associations and economic stakeholders.

“The second issue is determining whether members of Kast’s government will have sufficient political skill to avoid unnecessary conflicts with business associations—which are largely influenced by the opposition—and with the opposition itself, in ways that provide enough short- and medium-term confidence to investors and the markets,” Garnham explains.

Fiscal cuts: a major challenge

A proponent of reducing the size of the state and improving its efficiency, Kast made the ambitious campaign promise to reduce government spending by $6 billion during his first 18 months in office.

This fiscal consolidation is one of the most important pillars of the economic agenda in Chile under the new administration.

Several factors support the rationale behind this objective:

• According to the Inter-American Development Bank (IDB), Chile loses roughly $5 billion annually due to inefficient fiscal spending.
• Public debt has been increasing steadily as government expenditures have outpaced revenues.
• Administrative inefficiencies have expanded the cost of government operations.

Hermann González, who until last year served as vice president of Chile’s Autonomous Fiscal Council (CFA), has stated that fiscal adjustment is necessary because the country is spending more each year than it generates.

“That $6 billion addresses the fiscal deviation that has caused public debt to grow steadily,” he said.

However, Garnham believes that achieving this reduction will not be easy, particularly because many structural constraints exist within both the central government and municipal administrations. Reforms may therefore include:

• Changes to public-sector employment structures
• Reduction of inefficient government programs
• Improved oversight of administrative spending

“There is probably room for reductions. In recent years, it has been demonstrated that public spending is very inefficient. The challenge will be how to withstand resistance from the incumbents,” the lawyer notes.

Several studies support this concern, indicating that approximately 30 percent of Chile’s public spending is allocated to bureaucracy and salaries, significantly higher than the OECD average of around 20 percent.

Vicente Sáez Pinochet, a partner at the Chilean firm Sáez y Compañía, reinforces this view by arguing that the public administration payroll has become excessively large.

He notes that many positions within the public sector are associated with:

• Overtime payments and performance bonuses
• Inflated administrative structures
• Poorly evaluated social programs

“With political will and by trimming the excess from the state apparatus, it would be possible to reduce spending by much more than $6 billion,” Sáez says.

As part of this fiscal restructuring, the government also plans to review and potentially reorganize social programs considered inefficient, including universal subsidies for first-time home purchases. These programs could be replaced by direct cash-transfer mechanisms targeted at those most in need.

Nevertheless, the government must carefully balance fiscal discipline with political stability, since Chile’s powerful unions and professional associations have historically demonstrated their ability to mobilize against reforms.

The necessary reform

Another important component of Chile’s economic agenda is tax policy reform aimed at stimulating investment and improving competitiveness.

Although Kast’s proposal does not constitute a comprehensive tax overhaul, it includes several significant changes:

• Reduction of corporate tax rates
• Elimination of certain business levies
• Creation of a more integrated tax system

Under the proposal, corporate tax rates would change as follows:

• Large companies: 27% → 23%
• Medium-sized companies: 25% → 23%

Supporters argue that these reductions could increase capital inflows and strengthen business confidence.

However, critics point out that the measure would directly benefit only about 11 percent of Chile’s companies, leaving the remaining 89 percent—mostly small businesses—without significant tax relief.

To address this issue, the government is considering making the provisional tax regime introduced for small and medium-sized enterprises (SMEs) after the pandemic permanent.

Nevertheless, Garnham argues that investors prioritize stability over marginal tax reductions.

“Apparently, Iraq has a corporate tax rate of 15 percent, and I don’t see many people going there to invest,” he says, emphasizing that institutional stability and legal certainty remain the most important factors for attracting investment.

Even so, fiscal analysts warn that tax reductions could create questions about long-term fiscal sustainability, particularly regarding funding for social programs.

Attracting investment

A central objective of the economic agenda in Chile is to attract both domestic and international investment in key sectors.

Chile’s economic growth has historically relied on resource-intensive industries such as:

• Mining
• Energy
• Infrastructure
• Services

Kast’s economic team has identified approximately $100 billion in investment projects currently on hold, largely due to uncertainty about regulatory policies and political conditions.

Recent data suggests that investor confidence may already be improving:

• Foreign Direct Investment (FDI) reached $14.152 billion in 2025, representing a 13 percent increase compared to the previous year.
• InvestChile’s investment portfolio reached $65.689 billion, a 17 percent increase from 2024.

The sectors driving these investment flows include:

• Renewable energy, particularly green hydrogen
• Mining projects
• Service sector expansion

However, improving investor confidence also requires addressing regulatory bottlenecks. For many companies, one of the biggest obstacles to investment has been the complexity and slow pace of environmental and sectoral permitting processes.

To address this issue, the government will rely on the Framework Law on Sectoral Authorizations (Law No. 21.770), which:

• Modifies more than 40 regulatory frameworks
• Seeks to reduce permit processing times by 30% to 70%
• Introduces new administrative procedures for investment projects

Although the implementation of the law will be gradual, policymakers believe it could significantly reduce bureaucratic obstacles that have delayed large-scale investments.

Dangerous relationships

For a country whose GDP depends on international trade for more than 60 percent of economic activity, maintaining stable diplomatic relationships is essential.

This aspect represents one of the most delicate challenges for the economic agenda in Chile, given the geopolitical rivalry between the country’s two largest trading partners:

• China
• The United States

Although Kast has ideological affinities with U.S. President Donald Trump, economic realities complicate the situation.

According to Chile’s Undersecretariat for International Economic Relations (Subrei):

• China receives 35.2 percent of Chile’s exports
• The United States accounts for 17.8 percent

Tensions between the two powers have already affected Chilean policy decisions. A notable example is the controversy surrounding a submarine fiber-optic cable project linking Hong Kong and Valparaíso.

The United States has argued that the project could:

• Undermine regional security
• Expand Chinese technological influence in Latin America

In response to progress on the project, Washington imposed sanctions on three members of Gabriel Boric’s cabinet, intensifying diplomatic tensions.

The issue also complicated the transition between Boric and Kast, marking one of the first major controversies of the new administration.

Despite these tensions, analysts expect Kast to strengthen relations with the United States while maintaining pragmatic ties with China.

As Garnham observes:

“Trump will remain in office only for a few years, whereas the Chinese Communist Party has been in power for more than 75 years.”

For this reason, Chile’s leadership will likely seek a careful diplomatic balance as it implements the economic agenda in Chile aimed at restoring growth, attracting investment, and reinforcing the country’s position as one of Latin America’s most stable economies.

Mexico continues to attract foreign investment for electric mobility. Just last week, two U.S.-based companies announced that they will be investing nearly half a billion dollars in electric vehicle charging infrastructure and electric buses throughout central Mexico.

The companies that will be developing the electric mobility project are Invisible Urban Charging Inc. (IUC) and ATX Smart Mobility. For both companies, Mexico presents an opportunity to grow their electric mobility services throughout Latin America.

The announcement continues several recent efforts to invest in electric mobility in Mexico. Electric vehicles are gaining popularity throughout Latin America’s second-largest economy as demand for cleaner transportation solutions grows in Mexico City and other large metropolitan areas.

The Investor-Owned Companies

Two American companies have announced plans to invest approximately $500 million USD in Mexican electric mobility, starting with electric buses and charging infrastructure in and around the Bajío region.

Headquartered in Atlanta, Invisible Urban Charging Inc. will provide financial assistance and hardware for the charging portion of the project. ATX Smart Mobility, a Miami-based tech company, will implement artificial intelligence technology to manage how the buses move about city streets.

Together, the companies say they will install 38 electric charging stations and 140 electric buses throughout Mexico. Officials from both companies added that they hope to break ground within the next few months.

IUC provides a combination of financing and hardware for its charging stations. The Georgia-based company focuses on cities looking to add scalable charging infrastructure.

Some of IUC’s primary responsibilities include:

• Financing charging station installations
• Supplying hardware for charging stations
• Installing and maintaining software to run charging stations

Software provided by IUC allows EV drivers to find nearby charging stations through a mobile application. Station operators and business owners can also track energy usage and station utilization.

Jake Bezzant, co-founder and CEO of Invisible Urban Charging, said in a statement that his company is looking toward Mexico as a beachhead into the Latin American market for electric mobility solutions.

“In particular, we’re initially focused on commercial electric vehicle fleets such as buses and delivery vehicles,” Bezzant stated. “Once you put in that infrastructure for commercial vehicles, you then allow for ease of adoption for consumers.”

AI Will Power Smarter Transportation

ATX Smart Mobility’s electric buses will run on technology designed to create a smarter transportation network. Using artificial intelligence, the company’s software will allow officials to:

• Optimize route efficiency for electric buses
• Increase the energy efficiency of buses
• Schedule vehicle charging
• Analyze city transportation needs

ATX Smart Mobility says its intelligent routing software will help municipal leaders get the most out of their electric bus purchases by maximizing efficiencies and reducing energy costs. Routing isn’t the only service that will be powered by AI, however.

“Routing is one piece of the puzzle,” said a company spokesperson. “Electric buses require smart maintenance and charging schedules, predictive analysis, and real-time data to truly transform transportation.”

CBRE To Help Build Out Charging Infrastructure

International commercial real estate services company CBRE Group will also help develop locations for charging stations.

The services CBRE will provide to the charging network include:

• Determining ideal charging station locations
• Assisting with charging station installation
• Maintenance and operations for stations

CBRE will use its data and analytics platform to determine where to recommend installing charging stations. This platform will take into consideration population density, traffic patterns, and nearby business districts.

Where will the charging stations be located?

Initial installations will be made throughout central Mexico, including:

• Mexico City
• State of Mexico
• Puebla
• Querétaro

Why central Mexico? As previously mentioned, the Bajío region alone has attracted new passenger and commercial vehicle manufacturers to areas such as Querétaro. The proliferation of automotive manufacturing will continue, but the demand for EV chargers is not yet meeting expectations.

“There are approximately 280 vehicles per charger in Mexico,” said an ATX Smart Mobility executive. “We believe that an ideal ratio is somewhere around 40 vehicles per charger.”

Electric mobility in Mexico is attractive to investors because the demand is there. Mexico’s urban population is growing every year, putting a strain on public transportation and commercial transportation fleets. At the same time, the nation is building up its automotive manufacturing sector to support new electric vehicle market entrants such as:

• BYD
• Geely

The environmental benefits of replacing gas-guzzling buses with electric alternatives are obvious. Increasing the adoption of electric passenger vehicles in Mexico also requires building out a network of chargers. Projects such as this aim to do just that.

Electrifying Mexico’s Transportation Network

Electric mobility in Mexico can have lasting impacts on the country’s economy and environment. It:

• Helps increase the adoption of EVs by making charging more accessible
• Could help reduce emissions with electric buses
• Helps grow Mexico’s EV economy by bringing in new investment from the United States
• Creates jobs across multiple sectors (charging infrastructure, software, transportation, etc.)

Global automotive manufacturers are already sensing an opportunity in Mexico. Domestic manufacturers such as Zacua are following in the footsteps of established EV brands, giving consumers even more reason to purchase electric cars.

Conclusion

Mexico has the opportunity to join countries such as China and the United States as one of the global leaders in electric mobility. Supporting global efforts to electrify transportation, companies such as Invisible Urban Charging and ATX Smart Mobility are taking steps to attract more international investment to Mexico.

ATX’s executive concluded: “Latin America has an opportunity to leapfrog right to the newest and most innovative transportation technologies. We’re just getting started.”

The development of Argentina’s mining sector has long been seen as one of the country’s most promising economic opportunities. However, even projects with strong investment backing can encounter obstacles tied to infrastructure, regulation, and coordination among government authorities. Such is the case with the largest mining project in Argentina, a copper initiative known as Vicuña that has already generated intense debate even before construction has officially begun.

The Vicuña mining project, which involves an investment of approximately US$7.1 billion, is located in the province of San Juan, one of Argentina’s most important mining jurisdictions. The project aims to develop copper deposits at extremely high altitudes in the Andes Mountains, but disagreements over the expansion of the electricity transmission network required to power the operation have delayed progress.

While mining companies behind the project insist they are following national regulations and proposing to finance the necessary infrastructure themselves, provincial authorities have raised concerns about access to the electrical grid and the broader implications for regional development.

A Strategic Copper Development

The Vicuña initiative is considered the largest mining project in Argentina because of its scale, investment value, and projected copper output. The development integrates two major deposits:

• Josemaría
• Filo del Sol

Both deposits are located in the high Andes along the Argentina–Chile border and are expected to become major contributors to global copper supply once operational.

Copper is increasingly important in the global economy due to its role in:

• Renewable energy infrastructure
• Electric vehicles and battery systems
• Transmission networks and electrification projects
• Digital and telecommunications infrastructure

Industry analysts believe that demand for copper could increase dramatically over the next two decades as countries accelerate the transition toward clean energy.

According to mining specialists, projects like Vicuña could position Argentina as a much more prominent player in the global copper market.

“Argentina has some of the largest undeveloped copper resources in the world,” noted one mining industry consultant. “Projects such as Josemaría and Filo del Sol have the potential to transform the country’s role in global metals supply.”

Infrastructure Challenges at High Altitude

One of the main challenges associated with developing the largest mining project in Argentina is the extreme environment in which it will operate. The mining complexes are planned at more than 4,200 meters (13,780 feet) above sea level, where conditions can be harsh, and infrastructure is limited.

Currently, exploration camps operate using diesel-powered generators, with fuel supplied by the Argentine energy company YPF and transported by truck to the remote site.

Key characteristics of the current energy setup include:

• Diesel generators providing a temporary electricity supply
• Fuel deliveries transported by truck along mountain roads
• Storage tanks capable of holding 330 cubic meters of fuel
• Energy reserves sufficient for approximately 14 days of operation

However, this system is not viable for full-scale mining production, which will require a stable and large electricity supply.

To address this need, the mining companies have proposed a major infrastructure plan involving:

• Construction of medium- and high-voltage power lines
• Expansion of transformer substations
• Integration with Argentina’s national interconnected electrical grid
• Approximately 220 kilometers of new transmission lines

The projected electricity demand for the Josemaría and Filo del Sol complexes is estimated at 260 megawatts, comparable to that of a medium-sized city.

A New Regulatory Framework for Energy Infrastructure

The controversy surrounding the largest mining project in Argentina is also linked to recent changes in national energy policy.

In 2025, Argentina’s Secretariat of Energy issued Resolution 311/25, allowing large energy consumers—such as mining companies—to finance and build their own electricity infrastructure when necessary.

Under this framework:

• Companies can propose expansions to the national electricity grid.
• Private investors can finance new transmission infrastructure.
• Investors receive priority access to the additional capacity created by their projects.

This mechanism was designed to address Argentina’s longstanding lack of investment in electricity transmission systems.

The plan is supported by reforms introduced under the government’s broader economic restructuring agenda.

These reforms include:

• The Ley de Bases, approved by Congress
• Decree 450, which updated Argentina’s electricity sector legislation
• The creation of Article 31, allowing private capital to finance grid expansion

Government officials argue that these measures are necessary to unlock investment in industries such as mining, energy, and manufacturing.

The Proposed Power Grid Expansion

Within this regulatory framework, the National Electricity Regulatory Entity (ENRE) published Vicuña’s request on February 18 to expand the electricity transmission network needed to power the mining project.

The proposed infrastructure plan includes:

• Upgrading several transformer substations
• Building 220 kilometers of transmission lines
• Creating new capacity capable of supplying 260 MW of electricity
• An estimated investment of US$400 million to US$500 million

In exchange for financing the infrastructure, the mining company would receive priority access to 90% of the additional transmission capacity generated by the expansion.

This priority would last for approximately 25 years, which corresponds to the estimated operational life of the mining project.

Company representatives emphasize that the proposal does not grant exclusive control over the electrical network.

“Argentina’s electrical system operates under the principle of open access,” company representatives explained. “Any project requiring energy can request a connection, and if capacity is insufficient, it can propose expansions to the grid.”

They also noted:

“Priority access applies only to the specific capacity created by the expansion financed by the project itself. It does not prevent other companies from requesting connections or proposing additional infrastructure investments.”

Objections from Provincial Authorities

Despite the regulatory framework that allows private infrastructure investment, the proposal has encountered resistance from provincial authorities in San Juan.

The Provincial Electricity Regulatory Entity (EPRE) submitted a formal objection to the ENRE, raising procedural, technical, and legal concerns about the plan.

The provincial agency requested that:

• Authorization for the expansion not be granted immediately
• A public hearing should be held before approving the project
• The broader implications for the province’s electricity system be examined

In its official communication, the EPRE warned that granting priority access to such a large share of transmission capacity could affect future development projects.

The agency stated:

“The attempt to capture 90% of the remaining capacity constitutes an abusive exercise of the right of access that undermines the social and strategic function of the transmission system.”

Provincial officials argue that the electrical grid must remain flexible enough to support other economic initiatives in San Juan.

At the same time, they insist that relations with the mining companies remain constructive.

Efforts to Reach a Compromise

Despite the dispute, authorities in San Juan emphasize that negotiations are ongoing and that the issue could still be resolved through dialogue.

Provincial officials say that they are currently working on a separate electrical infrastructure development plan, financed through provincial trust funds, which could also support mining operations in the region.

Officials have indicated that:

• The permitting process remains ongoing
• Multiple stakeholders are involved in negotiations
• A final agreement is still possible

“There is no conflict with the company,” one provincial official stated. “The relationship is very good, and we are confident that solutions can be found that benefit both the project and the province.”

A Broader Structural Challenge for Argentina

The debate surrounding the largest mining project in Argentina highlights a broader structural challenge facing the country: a chronic deficit in energy infrastructure.

Argentina’s electricity transmission network has long struggled with:

• Limited capacity for new industrial projects
• Insufficient investment in transmission lines
• Bottlenecks connecting remote regions to the national grid
• Delays in permitting and regulatory coordination

These limitations have become particularly problematic as Argentina attempts to expand sectors such as:

• Mining
• Renewable energy generation
• Industrial manufacturing

Large-scale projects often require new infrastructure that can take years to develop.

A Key Test for Argentina’s Investment Strategy

The regulatory dispute surrounding the largest mining project in Argentina may ultimately serve as a crucial test for the country’s new approach to infrastructure development.

If the mechanism allowing private investors to finance energy infrastructure proves successful, it could unlock billions of dollars in investment across multiple sectors.

However, if conflicts between national and provincial authorities persist, they could slow progress and discourage potential investors.

What happens in the Vicuña case will likely shape:

• Future mining investments in Argentina
• The development of new electrical infrastructure
• The role of private capital in financing national energy systems

For Argentina, resolving these issues efficiently will be critical if it hopes to fully capitalize on its vast mineral resources and position itself as a major supplier of strategic metals in the global economy.