When searching for answers as to why El Salvador has become a strategic investment hub in Central America, you have to look no further than “Government Leadership.” Over the last decade, El Salvador has been steadily improving aspects of their country that directly affect the investment and business communities.

Take public safety, for example. On every level, Salvadoran citizens are seeing positive trends in homicides and crime. According to Business Insider, the homicide rate fell by 60% from 51 to 20 murders per 100,000 people from 2015 to 2021. As a result of this reform, foreign direct investment has increased as investors recognize El Salvador’s improvements and stability.

Seeing these clear strides in government leadership has set a tone that El Salvador is open for business and welcomes investors as a strategic investment hub in Central America. By implementing regulatory reforms that meet the demands of today’s digital economy, embracing technologies such as cryptocurrencies, and providing companies with generous tax incentives, El Salvador is paving the way for itself to become a true investment hub in Central America.

Read on to learn why El Salvador should be considered your next destination for foreign direct investment.

Competitive Tax Breaks

In addition to tax exemptions and benefits offered by Salvadoran Municipalities and development zones such as free trade zones (FTZ), the Salvadoran Government offers companies tax holidays for Foreign Direct Investment. Companies investing in El Salvador are exempt from:

• Income Taxes
• Municipal Taxes
• Import Duties on Machinery, Equipment, and Materials

In fact, technology companies can qualify for tax exemptions of up to 15 years.

Comparatively speaking, other Central American countries such as Costa Rica offer tax exemptions for 8 years, Panama for 6 years, and Honduras for 5 years. This is another reason why El Salvador is becoming a strategic investment hub in Central America.

Why are more tech companies moving to El Salvador?

Remote Working Visa

When traveling to El Salvador for work, you may apply for a remote working visa. This temporary visa grants you access to stay in El Salvador for up to two years. If you plan to work for yourself or own a business in El Salvador, you can apply for a Salvadoran Investment Visa.

Increasing Talent Pool

“Central America is a region that punches above its weight.”- Jose Villalobos, Head of Innovations at Microsoft LATAM.

Historically, countries like India and China have been seen as top destinations for outsourcing. The growth of these regions can be attributed to their large English-speaking workforce and availability of talent. But what makes Central America competitive in the grand scheme of offshoring and outsourcing?

A hidden advantage of Central America is the availability of a highly skilled talent pool. With cheaper labor costs compared to the U.S and higher than Asian competitors, Central America provides companies with bilingual professionals. As many countries in Central America continue to modernize their education system, specifically focused on STEM, these countries provide yet another advantage: a growing pool of talent.

Top Growing Industries in El Salvador

As more companies continue to turn to Central America for offshoring and outsourcing services, certain industries are starting to bloom. Tourism, technology, and aeronautical sectors are some of the top industries rapidly growing in El Salvador.

Tourism

Tourism Industries in El Salvador are booming. From 2019 to 2025, international visitor growth reached a staggering 92%. For the hotel industry specifically, growth rate averages are expected to exceed 8% annually until 2030.

Technology

Tax exemptions of up to 15 years are one of the many reasons technology companies are migrating their operations to Central America. El Salvador, in particular, has been attracting many startups because of its openness towards digital assets. In addition to tax breaks, technology companies can take advantage of:

• A clear legal framework to operate a digital asset business.
• An AI law fosters innovation and doesn’t overregulate the technology.
• Electronic government services.
• Transparency when applying for permits.

Aeronautical

The aeronautical industry is another prime sector growing in El Salvador. With established infrastructure in aircraft maintenance, repair, and overhaul, El Salvador offers many companies a chance to outsource their manufacturing and logistics operations.

Geographic Advantage

You might be wondering what makes Central America desirable compared to its Asian and African counterparts. Central America has many hidden advantages that make it one of the top regions for outsourcing and offshoring services. Proximity to the United States and trade partnerships are just some of the benefits that make Central America a prime location for companies looking to expand.

South of the United States and Mexico lies Central America. What’s the advantage of being located there? Distance. El Salvador shares a border with Guatemala to the west and Honduras to the north. Having direct access to these countries allows companies to reduce shipping distances drastically. Not only does short distance translate to cheaper costs, but lead times are shorter compared to shipping from Asia or even South America.

El Salvador’s Trade Partners

While Central America, the United States, and Mexico make up a substantial portion of El Salvador’s imports and exports. Colombia and Chile have recently signed trade agreements that open the doors for future commerce.

Conclusion

When looking for a place to invest, El Salvador is a great option. Whether you are looking to open a hotel, your own tech startup, or outsource your manufacturing operations. Whatever your needs, El Salvador can provide your business with what it needs to flourish in this sunrise economy. Interested in learning more? Contact LATAM FDI.

Brazil and Argentina’s automotive relationship has been the most significant continental partnership for decades. Now they are rewriting the rules of engagement to go global.

Bilateral automotive trade between Brazil and Argentina has been governed by ACE 14 since the early nineties. Designed at a time when Mercosur was conceptualized as a “trade administrator” focused on administering trade between member states rather than an “industry manager”, ACE 14 set the rules of automotive commerce across an integrated South American production chain.

The world has changed. Consumer preferences are shifting, Chinese automakers are gaining share around the world, and supply chain resilience is the name of the global game. Brazil and Argentina need to compete on the world stage with a united front, or risk falling further behind in a global industry rapidly leaving them behind.

Updating ACE 14 is the first order of business.

Who Wants to Reform ACE 14?

Most top-end conversation about automotive in Mercosur these days returns to ACE 14, or how it must be updated to allow Brazil and Argentina to compete with Asian automakers.

Leading the calls for reform are Brazil’s automotive industry association, Anfavea, and auto parts federation Sindipeças; their Argentine equivalents Adefa and Afac are equally concerned (and vocal). What brings these public-private entities together is an understanding that defending Mercosur’s position in the automotive hierarchy will take effort and coordination.

Argentina’s Daniel Herrero explains their motivation this way: “If Mercosur is just administrating trade, it will continue to be a trading bloc. But if it aspires to export vehicles and parts to the world, it should act as a production manager.”

ACE 14 was written in an era when Brazil and Argentina faced automotive competition primarily from the United States and Germany. Today’s competitors include China, and China doesn’t respect boundaries.

“There are two factors that drive us to act urgently: opportunities abroad and competition from China,” states Daniel Herrero, Director of Adefa

What Needs to Change?

ACE 14 has served Brazil and Argentina well. It created preferential tariff treatment between both countries that allowed an integrated regional supply chain to develop. But autos in 2021 are not autos in 1994.

China is the elephant in the room here. Chinese automakers are invading market after market, leveraging scale and the rapid advancements their domestic industry has made in electric vehicles. The next decade will be decisive as Chinese brands look to seize export markets that US and Japanese automakers once viewed as their exclusive territory.

South America has not escaped Beijing’s notice. If Brazil and Argentina don’t develop a unified regulatory framework that incentivizes investment, streamlines cross-border production, and deepens supply chain integration; Chinese automakers will sell them cars, too.

Both governments recognize the stakes. According to AutoBusiness, Brazil and Argentina collectively represent:

• A market of 350 million potential consumers
• Production capacity of up to 5 million vehicles annually
• Over $22 billion in cumulative investment since 2015

Industry jobs depend on it, too. Brazil’s automotive sector represents around 20% of its industrial GDP and supports 1.3 million direct and indirect jobs. Argentina’s figures aren’t too far behind, with automotive accounting for around 8.4% of industrial GDP and just over 500,000 jobs supported.

Needless to say, both industries have a lot riding on successful negotiations over the next decade.

There’s a reason Brazilians and Argentines buy each other’s cars. Between 55% and 70% of vehicles exported from both countries remain within the trade bloc to satisfy each nation’s demand, according to national industry associations. That’s billions of dollars of components and finished vehicles that cross an international boundary viewed by manufacturers as mere abstraction.

Bringing ACE 14 into the 21st century means preserving that integration; making it more resilient in the face of global competition. It also means locking in regulatory certainty and optimizing the bilateral production chain to incentivize investment from global automakers.

Businesses on both sides of the border have made their requests to government clear:

“The creation of more business-friendly climate in Brazil and Argentina is high on our agenda: clearer regulations, regulatory predictability, and stability are essential…We need common rules to make it easier to trade and transport our goods, locally or abroad.” Says Rodrigo Borras, Executive Secretary of Argentina’s Sindicauto

Finishing the Job By 2029

Bilateral talks between Brazil and Argentina remain at an early stage. In that sense, 2029 is an ambitious target for completely rewriting the rulebook on automotive commerce. But that doesn’t mean negotiators aren’t thinking about the finish line.

Carlos Silva Junior, CEO of Brazil’s Anfavea, explained to Reuters that negotiators aren’t simply interested in hammering out updated tariff rules. Ideally, they want regulations that encourage “investment balance” between both countries rather than pitching jurisdictions against each other to attract dollars and euros.

Achieving that balance starts with familiar business priorities. Companies want regulations they can understand, logistics they can rely on, and standards that do not change every time the administration in Brasilia or Buenos Aires flips parties.

There’s a sense of urgency to ACE 14 negotiations that comes with having something worth protecting. By building a regulatory framework that global automakers can understand and trust, Brazil and Argentina can position Mercosur as a formidable player in the decades ahead.

We don’t often see two major trading partners integrate, especially in a world being defined by fragmentation. Cars have a unique power to bring people together, and Brazil and Argentina are rewriting the rules of engagement to meet the moment.

The Venezuelan mining sector is making a bold play to reposition itself on the global investment map.

For as long as the country has bet its economy on oil, policymakers in Caracas promoted the Venezuelan mining sector as the jewel in the nation’s economic crown. High-grade deposits of gold, diamonds, coltan, bauxite, and rare earth elements sat underground — tantalizingly within reach — but insufficient investment turned a sector with promise into one defined by extraction to meet domestic needs and finance for artisanal miners.

Venezuela’s mining sector is back on Washington’s radar.

Deepening economic crisis and collapsing oil exports are now forcing Venezuela’s leaders to confront that reality. Mounting pressure from U.S. sanctions — especially the loss of a key Chinese market for crude oil — has also reignited Venezuela’s pursuit of gold mining, specifically as a source of much-needed foreign currency. Add in geopolitical upheaval, gold’s relative safe-haven status, and a slew of key amendments to the country’s mining law that aim to incentivize foreign investment in Venezuela, and investors are starting to pay attention.

Gold: Drive of Venezuela’s Mining Comeback

Until recently, the Venezuelan mining sector remained in the shadow of its resource-nationalized cousin: petroleum. Yet gold is fast emerging as a key driver of renewed interest from investors.

A revised mining law is slated to open the sector to private investment.

Unlike other parts of Venezuela’s economy, where commodity price changes have caused seismic shifts, mining was able to operate with relative autonomy. One analyst describes mining as Venezuela’s “engine that didn’t stop.” The market has started to take notice, too: Last year, Venezuelan gold production grew by nearly one-third and in January reached its highest level in over a decade.

The legal landscape is evolving as policymakers look to restart the sector.

Although domestic production has ticked upwards, broader reform in the Venezuelan mining sector is needed to catalyze private investment. Venezuelan lawmakers this week reintroduced a revamped mining law aimed at doing just that. The latest proposal would:

• extend concessions up to 30 years
• formalize artisanal mining (largely unregulated in Venezuela until now)
• require ministry promotion of foreign investment, provide for domestic arbitration
• prioritize mediation in legal disputes.

Gone from the new draft is controversial language that would have allowed the President to issue mining concessions at will.

Growing geopolitical tensions, with far-reaching implications for global mining markets, are providing an additional tailwind.

One of the more interesting developments in the steady stream of recent news about the Venezuelan mining sector concerns Washington. Reuters reported last month that despite heavy sanctions against Venezuela, the United States has granted several licenses that allow U.S. companies to conduct transactions related to mining in the country. In December, U.S. government officials met with executives from Minerven, Venezuela’s state-run gold mining company.

Why Now? U.S.-China Competition and Venezuela

Discussions between Minerven and the U.S. government are just one example of how geopolitical competition with China is playing into Venezuela’s efforts to court foreign mining investors.

China buys roughly two-thirds of the world’s mined rare earth metals, and while Venezuela is hardly a competitor in that space, Chinese control of the rare earth value chain is raising alarms in Washington. As one former U.S. diplomat with knowledge of the conversations recently told Axios, Venezuela “is well aware of the strategic importance of rare earth minerals and the pivotal role they will play in future industries and technologies, especially electric vehicles.”

Increased U.S.-Venezuela dialogue fits within a broader pattern

Elsewhere in Latin America, the United States is making major investments to wean critical mineral supply chains from reliance on China. Secretary of Energy Jennifer Granholm toured Peru’s largest lithium deposit in November. Earlier this month, President Trump approved $4 billion for mining production in the United States, including processing facilities for rare earth elements. with Venezuela.

Venezuela’s Mines Offer Investors Potential and Risk

Slowly but surely, the pieces are lining up to attract foreign investment to Venezuela. But just because the possibility exists doesn’t mean investors should take the plunge.

For starters, significant risk remains. The ease of doing business in Venezuela is among the lowest in the world. Venezuela’s legal system is opaque at best, and expropriation remains a serious risk for commercial actors. U.S. companies looking to operate in mining (and anywhere else in Venezuela) should heed the lessons of Venezuela’s oil industry, where billions of dollars in sunk costs failed to stave off competitive disregard for private property and contracts.

However, risks notwithstanding, there are legitimate reasons to consider Venezuela.

Similar dynamics are at play in Iraq, Libya, and Syria, countries that also boast significant mineral reserves and are fertile ground for U.S. companies looking to diversify their supply chains. But Venezuela has advantages these countries don’t: a history of production and, increasingly, Washington’s attention. As the Trump administration continues to explore tools for reducing risk in Venezuela, Congress should weigh whether targeted allowances for the Venezuelan mining sector could help alleviate suffering without undermining prospects for a democratic transition.

Paraguay recently approved the Mercosur-European Union Agreement. Paraguay becomes the last nation to approve the Mercosur-European Union Agreement. Uruguay, Argentina, and Brazil had already completed this process.

The delay was caused by the time it takes Paraguay’s parliament to approve treaties like this one and requests from some of Paraguay’s productive sectors.

The state continued that it would approve the accord, nonetheless.

Mercosur-European Union Agreement Approved by the Parliament of Paraguay

The agreement had already been approved by Mercosur countries like Uruguay, Argentina, and Brazil. With the Friday, March 13, 2026 announcement from Paraguay, all member countries have finalized the ratification process.

Trade ministers of the South American bloc and representatives of the European Commission concluded negotiations on the free trade agreement back in 2019. These negotiations took over two decades.

Paraguayan Chamber of Deputies President Rodrigo Gamarra stated:

“A market of over 400 million people will open up, with high purchasing power. We are talking about increasing export opportunities for Paraguay.”

Gamarra went on to say:

“The strengthening of integration will allow more investment to flow into Paraguay and the rest of Mercosur.”

Rodrigo Gamarra shared that people shouldn’t simply approve of the deal; they should celebrate it because it will bring Paraguay more market share, better pricing, and higher volumes of commerce. Gamarra says that once the agreement is fully ratified, the country will see:

• More investment in Paraguay
• Job creation
• Better circulation of the Guarani within the country
• Greater international competitiveness for Paraguayan goods.
• Benefits of Mercosur-European Union Trade Deal, According to Parliament

Lawmakers who participated in the legislative session detailed several ways they believe the deal will benefit Paraguay. According to them, the agreement will:

• Allow Paraguayan products to be sold overseas more easily.
• Give Paraguay a new market to sell its products.
• Improve the price competitiveness of Paraguayan goods.

Paraguay’s lawmakers also said that the deal will support micro, small, and medium-sized enterprises. Increase foreign direct investment in Paraguay.  Additionally, it will:

• Reduce bureaucratic obstacles to trade between Paraguay and Europe.
• Help integrate Paraguayan producers into global value chains.
• Boost exports and production in key sectors of Paraguay’s economy

For Paraguay specifically, Gamarra noted that:

“This is a strategic tool that will allow us to increase our exports, boost our productive sector and attract foreign investment to the country.”

Why Is It Important for Paraguay?

Brazil, Argentina, Uruguay, and Paraguay benefit from the Mercosur trade deal with the European Union. However, Paraguay in particular will receive special perks from the agreement.

According to analysts, the markets that Paraguay exports to the most are Switzerland, Russia, and the United States.

Paraguay will have exclusive quotas with no tariffs for the following products:

• Biofuels
• Sugar that has been certified organic

Mercosur–European Union relations

EU–Mercosur relations date back to when diplomatic ties were first established between the then-European Economic Community and Argentina, Brazil, Uruguay, and Paraguay in 1980. Both sides agreed to establish a Framework Cooperation Agreement in June 1992, and it entered into force in March 1996.

Trade liberalisation talks between Mercosur and the EU began in May 1999. Political dialogue is regular at Political Dialogue Meetings (PDMS) and Summits between Mercosur and EU leaders. The EU and Mercosur leaders met for their first Summit ever in June 2022.

What Does This Mean for the Future?

The Mercosur-EU agreement will take decades to negotiate. It includes zero duties on almost 99% of goods traded between the two regions. When it goes into effect, it will provide one of the world’s biggest markets.

This free trade agreement between two economic powerhouses will cover more than 780 million citizens. This means more opportunities for the citizens of both regions.

The agreement covers a wide range of topics including:

• Trade
• Investments
• Fight against illegal migration
• Sustainable development.

How Will This Impact Foreign Trade and Investment?

Companies will have greater opportunities to sell abroad in both regions due to the agreement. Production will expand as a result of this, and more people will be hired.

Companies from Europe will also want to open up shop in Paraguay because of its access to the rest of Mercosur and South America. Simply put, more investment will come into the country.

This allows the transfer of technology from European companies to Paraguayan companies. If they choose to do business with them. The result of this will be:

• Increased sustainable development
• The elimination of illegal practices
• Improved infrastructure and institutions

Increased Trade and Investment within Paraguay

More investment in Paraguay means more jobs for Paraguayans. When trade within a country increases, so does production.

When there is more production, companies need to hire more employees. Increased trade within a country also attracts foreign investment. Creating a cycle of growth and opportunity.

In the scope of a government offensive to modernize the Bolivian economy and call for Brazilian investments in Bolivia, the latter country’s government announced four key reforms aimed at opening up the sector and invited private companies to participate in exploration and production activities.

Brazilian and Bolivian investors participated in the forum in São Paulo, where around 300 businessmen participated to discuss business opportunities.

The measures were unveiled by Bolivian President Rodrigo Paz at the forum. “We have begun a new era of openness, predictability, and pragmatism,” said Paz.

The reforms intend to make Bolivia a regional leader when it comes to competitiveness in order to attract international capital. The four reforms target Bolivia’s energy sector and lay the foundations for future private investment in mining and industry.

Paz called on Brazilian investments in Bolivia during his speech at the forum.

Four Key Reforms: Inviting the Private Sector

The reforms that form the pillars of the Bolivian government’s plan of “reactivating Bolivia” and invite the private sector participation are:

• New Hydrocarbons Law
• New Electricity Law
• Green Energy Law
• New Lithium Law

As reported by President Paz and Minister of Hydrocarbons Mauricio Medinaceli, Bolivia will overhaul its regulatory framework in the energy sector through these reforms.

Hydrocarbons Law

• New contract scheme for hydrocarbons exploration and production.
• New forms of association between private companies and YPFB.

Electricity Law

• Align regulation in electricity generation, transmission, and distribution.
• Integration with regional grids.

Green Energy Law

• Development of green energy sources, including biofuel.
• Bioethanol specifically calls on Brazilian know-how in ethanol production.
• Hydrogen development and incentives.
• Electric mobility.

Lithium Law

• Opening of Bolivia’s lithium reserves for private companies.
• Allocation of areas for exploration and production under new contracts.
• Fast-track industrialization of the lithium value chain, including battery production.

Medinaceli commented on the reforms, saying that Bolivia is “changing the rules of the game by incorporating flexibility, efficiency, and incentives.”

Call Brazilian Investments in Bolivia

“Our country is open to anything that contributes to building a strong nation that produces and develops,” Paz said during the business forum while discussing Brazilian investments in Bolivia.

Brazilian companies could take advantage of Bolivia’s agribusiness potential by exporting Brazilian expertise in biofuel production.

Furthermore, the president reassured businessmen that Bolivia is “developing predictability and legal certainty” by providing incentives for production and clear rules that would allow fast-track authorization of projects and industries.

“We want Bolivia to be predictable for those who invest here,” said Paz.

Flexibility & Predictability

“Our foreign policy has no rigidity. We have met with President Trump as well as President Maduro,” Paz said while describing Bolivia’s foreign policy towards nations of different political ideologies.

“We are interested in what is convenient for Bolivia and what works. We are not interested in ideologies of the right or left,” he added.

Paz reiterated the government’s commitment to pragmatism and said that it will continue to pursue economic policies that deliver results while seeking out international capital.

“We want to continue improving the quality of life of our people,” Paz said.

Paz also reassured businessmen that regulatory changes would not be reversed by future administrations. Medinaceli also commented that Bolivia is aligning legislation with countries such as Canada and Australia in order to compete for capital in what he describes as a “competitive world cup.”

Brazil Cheers Bolivia’s Announcement

Brazilian authorities cheered Bolivia’s announcement and call for Brazilian investments in Bolivia.

“In agriculture, Brazil already has extensive experience that can help Bolivia expand production and also produce more for exports,” said Brazil’s Minister of Agriculture.

Jorge Viana, president of Brazil’s trade promotion agency, promoted ties between Santa Cruz and other states in Brazil, as Santa Cruz de la Sierra is Bolivia’s economic hub.

The main Brazilian companies showed interest in investing in Bolivia and expanding current operations. “Bolivia and Brazil can cooperate not just in energy but also in areas such as defense, agribusiness, and commercial aviation,” said an executive of a major Brazilian defense firm.

Brazilian oil company Petrobras will meet with Bolivian officials to “relaunch” the relationship between the two state-owned energy giants as Bolivia reforms its hydrocarbons sector.

“Brazil will contribute its vast experience in renewable energies,” Brazilian Vice President Hamilton Mourao said on Tuesday.

“We want to relaunch our relationship with an important firm, such as Petrobras, with clear rules of engagement,” Paz said.

Industry insiders have already responded well to Bolivia’s proposed hydrocarbons law, stating that the law will “level the playing field” and open up opportunities for investors interested in Bolivia’s vast hydrocarbon reserves.

Areas of cooperation between the two countries include greater energy integration, with Bolivia providing natural gas to power generation in Brazil, and modernizing its energy legal framework to allow Brazilian companies to participate in Bolivia’s promising energy sector.

“The new Hydrocarbons Law will certainly bring more predictability for private companies looking to develop Bolivia’s gas resources,” said Jorge Quiroga, former Bolivian president.

Brazilian investments in Bolivia could help exploit Bolivia’s natural gas potential. Brazil will continue to sell Bolivia’s natural gas as Bolivia invests in processing and petrochemical industries.

Quiroga also highlighted Bolivia’s complementary agricultural sectors; sharing Brazil’s experience in meat production could allow Bolivia to increase cattle stocks and boost exports.

The two nations also intend to boost supply chains in critical minerals, with Bolivia providing raw materials and Brazil providing refined products.

The current push for Brazilian investments in Bolivia highlights Bolivia’s push to diversify away from being China’s neighbor to South America’s neighbor.

Taiwan Semiconductor Manufacturing Company, commonly known as TSMC, is a Taiwanese company known for its semiconductor manufacturing facilities. Yesterday, the company announced plans to invest $100 billion dollars into manufacturing facilities throughout the United States. This historic investment will have ripple effects throughout the semiconductor industry worldwide. Countries throughout Latin America will see both incredible opportunities and geopolitical pressure, says international relations expert René Bolio. Latin American semiconductor opportunities should be on the radar of investors and governments across Latin America.

René Bolio stated that the supply chain would begin shifting almost immediately. “Countries in Latin America that have abundant reserves of the minerals needed for semiconductor production are about to see a boom like no other,” Bolio stated. This will allow countries rich in resources to play a pivotal role in the future of digital technology and industrial production once again.

Latin American Countries Rich in Minerals:

Bolio went on to highlight countries like Chile, Argentina, and Bolivia as nations that could stand to gain the most from TSMC’s investment. Why? These countries sit on some of the largest reserves of lithium in the world. Lithium has been nicknamed “white gold” because it is used in the production of many of the batteries that go into the technology used to power smartphones, computers, and even electric vehicles.

• Chile
• Argentina
• Bolivia

“This is a golden opportunity. A once-in-a-lifetime chance,” said Bolio. In order to prepare for the inevitable surge in demand, it will be critical for Latin American countries to expand their mining operations now. Additionally, smart governments will set regulatory policies that welcome foreign investments and form partnerships with American companies.

Speaking about the global trade tensions between the United States and China, Bolio had this to say:

The investment by TSMC comes as the United States and China are fighting over supremacy in the semiconductor industry. The tensions have expanded to include a trade war between China and the United States. As China and the United States continue to trade barbs, Latin America will be forced to pick a side as it does significant trade with both countries.

• The United States wants to secure its supply chain and source more minerals
• China wants to double down on investing in Latin America.
• Latin America will be forced to choose who to side with.

Bolio warned that if tensions continue to rise between the United States and China, it could cause Latin American countries to suffer should they choose the wrong side. “Countries with booming mining operations could see that cut off based on geopolitical decisions,” he continued.

Applications of Semiconductors

The investment by TSMC will also help push digital transformation in Latin America. Semiconductors will be used to power several technology-reliant industries.

• Fintech – As online banking and financial technology grow, there will be a demand for semiconductor technology.
• Telecom – Devices used for 5G and other broadband technologies are powered by semiconductors.
• E-learning – The expansion of online learning will require more devices that utilize semiconductor technology.

“This is great news for Latin America as a whole because it allows countries to improve productivity through technology and create their very own technology hubs,” Bolio explained. Countries like Mexico, Costa Rica, El Salvador, and Chile could all have the perfect opportunity to build out tech hubs.

Building A Latin American Tech Hub

If Latin American countries want to capitalize on TSMC’s investment and build out their technology hubs, they should focus on:

• Providing the perfect ecosystem for R&D into advanced electronics
• Forming relationships with Universities, Startups, and Non-Profits
• Allows for knowledge sharing and creation of technical talent
• Further develops their supply chain by producing more goods in-house

Semiconductor Opportunities in Latin America

Countries should focus on creating tech hubs that allow them to not just supply minerals to the rest of the world, but also develop the technology themselves. By investing in education and technology, Latin American countries can ensure they have the workforce needed to meet the demand of manufacturing at scale. Furthermore, Latin American countries can develop their own semiconductor opportunities.

Latin American governments should take the following steps to prepare for TSMC’s investment:

• Draft clear regulations on mining. These governments should ensure they can quickly and efficiently mine lithium and other valuable minerals.
• Welcome foreign investors – Providing tax breaks and other incentives for technology companies to operate within their borders.
• Partner with the United States and other countries – Countries should solidify relationships with TSMC and any companies that work with or help supply TSMC.
• Invest in education – Train the workforce you’ll need to meet the demand of manufacturing and production.
• Invest in technological development – Whether through public or private ventures, countries should focus on developing their own semiconductor opportunities.

Bottom Line

This investment by TSMC represents something bigger than an investment. This represents an inflection point for the technology industry. An inflection point that countries in Latin America can capitalize on if they take the correct steps:

• At the current moment, there is a high demand for lithium and other valuable minerals. Prices for these metals are high, and they will only continue to go up as China seeks to invest in Latin America.
• Latin American countries can strengthen their ties with the United States while still trading with China.
• Digital transformation throughout Latin America will pick up at a pace we haven’t seen before. Why won’t Latin America keep up?

“If foreign policy and resource management are done correctly, Latin American countries can enjoy higher exports, better relationships with the United States, and better technology for generations to come,” said Bolio.