Why Ecuador Attracts Franchises but Not Industry or Technology

Ecuador attracts franchises—especially cafés, retail brands, and food chains—because it has market structure, logistics, and investment characteristics that benefit replicable and low-risk business models, but not large-scale industrial or technology projects. In recent years, Ecuador has seen a wave of international franchises in food service, cafés, apparel, and retail, while, at the same time, remaining absent from major technology companies’ or multinational manufacturers’ expansion plans, which instead prefer to establish plants, data centers, logistics hubs, and regional headquarters in other Latin American countries. This reality is not by chance: from an international investment perspective, Ecuador is a safe destination for standardized, low-risk, “plug-and-play” operations, but not a strategic environment for high-complexity industry or technology ecosystems that demand structural characteristics the country (especially its main city Quito) does not yet offer.

The Franchise Model Fits a Small and Regulatory-Heavy Market

The first reason Ecuador attracts franchises, but not industry or technology, is the fact that the franchise business model fits a small, urbanized, and regulation-heavy market. International brands in fast food, cafés, apparel, and convenience retail operate on a basic principle: standardization + detailed manuals + minimal customization + strong local partners. This is a fast, low-cost, and low-risk entry strategy that allows global companies to sell their brand in a market where demand is constant but where regulatory complexity makes industrial operations unattractive. Franchises do not need to build factories, create sophisticated supply chains, maintain engineering departments, or face long permitting procedures. All they require is a trustworthy local operator, centralized training, and a format that can be rolled out from city to city. Economist Andrés Rodríguez provides a telling example of the entry of Starbucks in Ecuador: “The arrival of Starbucks followed a classic franchise equation: global brand + local operator + replicable format. This model is impossible to match for other types of projects that require facilities, technology, permits, or capital-intensive infrastructure”. For this reason, Ecuador easily attracts franchises but struggles to land advanced manufacturing, assembly plants, or R&D operations.

Market Size Limits the Arrival of Industry and Technology

Industries and technology multinationals do not select cities or countries for expansion based on intuition: they are looking for scale, consumption power, talent, logistics, and regional access. When measured against Mexico, Brazil, Colombia, Chile, Peru, or Argentina, Ecuador is a smaller market with lower consumption volumes and less purchasing power. Ecuador’s GDP per capita has stagnated and even declined in recent years, remaining around USD $6,000 per year, or about $500 per month per person. For a factory, R&D center, or technology hub, this means not only limited domestic demand, but also insufficient scale to act as a logistics platform serving a regional hinterland. In contrast, franchises are based on a different logic. They can work only on local urban consumption, which means that they need only population density and brand affinity to trigger recurrent sales. For this reason, they work in smaller markets like Ecuador, while industrial or technological investments remain too complex or risky to materialize at the same scale.

The Foreign Investment Ecuador Receives Is Not Industrial or Technological

Analysis of recent Foreign Direct Investment (FDI) flows into Ecuador shows a third trend: Ecuador does not attract technology or industrial FDI. A majority of investment in the country heads to primary sectors such as energy, mining, oil, infrastructure, or services. Very little goes to advanced manufacturing, electronics, pharmaceuticals, or software development. Economist Natalia López puts it bluntly: “The country receives investment, but not the kind that transforms its productive structure. As a result, low-capital projects such as retail franchises become the natural alternative for investors who want to enter without committing millions in fixed assets”. This helps explain why Ecuador attracts franchises, while it has remained peripheral to Latin America’s industrialization and digital-economy expansion.

Ecuador Lacks the Innovation Ecosystem That Global Tech Giants Seek

Global technology companies—and the fast-growing scale-ups expanding across the region—require an environment with:

• abundant specialized talent
• universities that generate applied research
• active venture capital funds
• regional market scale or opportunities for rapid expansion

While Ecuador has developed skills in entrepreneurship and digital adoption, the country still lacks a critical mass of engineers, researchers, and innovation hubs. Unlike Santiago, São Paulo, Medellín, or Mexico City, Ecuador does not yet have large STEM-focused universities generating research at scale, a robust venture capital ecosystem, major tech parks or innovation districts, or a pipeline of specialized professionals for AI, software development, data science, or advanced manufacturing. This reality limits its appeal to major technology firms, even as Ecuador attracts franchises that require far lower levels of talent specialization.

Regulatory Costs and Uncertainty Increase the Risk of Complex Projects

In multiple reports, the Inter-American Development Bank (IDB) and the World Bank list consistent barriers to investment in Ecuador: bureaucratic procedures, regulatory uncertainty, inconsistent rules, and political risk. These factors are a minor concern for franchises, which rely on local partners to handle day-to-day operations and have a business model designed to function with highly standardized procedures. For industrial plants, logistics hubs, or data centers, these obstacles can multiply costs and delay projects for years. Complex investments require predictable regulatory timelines, fast permitting systems, reliable energy and transportation infrastructure, efficient customs procedures, and long-term policy stability. Where this is uncertain, multinational investors will often seek other Latin American destinations with clearer and more scalable frameworks.

Dollarization Helps Franchises but Is Not Enough for Industry

One often-overlooked factor that influences investment decisions in Ecuador is dollarization. Dollarization is a big advantage for consumer-oriented companies since it removes exchange-rate risk and stabilizes revenues. This is one of the reasons Ecuador attracts franchises so consistently. But for industrial and technological investors, currency stability is not enough on its own. These sectors also need logistics competitiveness, skilled labor, regulatory certainty, modern industrial infrastructure, and broad trade agreements if they are to expand for export. Without these factors, dollarization becomes a partial, but not a transformative, advantage.

How Ecuador Could Attract Other Types of Investment

While Ecuador attracts franchises because it is where the market is, the country can reposition itself and seek a more diverse set of investment options if it advances in three key areas:

1. Increase the Supply of Specialized Talent

This can be achieved through university–industry alliances, STEM-oriented training programs, and active talent-attraction policies focused on engineers, researchers, and digital professionals.

2. Build Competitive Industrial and Logistics Platforms

Modern industrial parks, export corridors, special economic zones, and efficient ports could lower operation costs and increase competitiveness.

3. Improve Regulatory Stability and Simplify Bureaucratic Processes

Clear rules, faster permitting, and reduced administrative burdens will help restore investor confidence and make large-scale projects financially viable.

Conclusion

Ecuador attracts franchises because franchises are tailor-made to match Ecuador’s current market size, regulatory structure, and urban consumption patterns. But to attract more sophisticated industry and technology, Ecuador needs to advance in deeper reforms. It must build a supply of specialized talent, strengthen logistics infrastructure, and ensure regulatory predictability. Only by tackling these structural issues can Ecuador shift from a market focused on franchise-friendly investment to a more competitive destination for high-value industrial and technological projects, with a more diverse and resilient economic future.

Economic growth in the Dominican Republic in 2025 is heading towards an estimated 2.5%, according to figures announced by the Central Bank of the Dominican Republic (BCRD). The moderate result corroborates a year of ups and downs that left the Monetary Authority in a wait-and-see position regarding the country’s economic expansion.

For this reason, the Central Bank is not surprised that the Monetary Fund is also forecasting 2026 to be more dynamic, with the GDP growth rate projected to rise to around 4.5% when external conditions normalize and domestic financial constraints are somewhat eased. Despite the current scenario of headwinds, however, the BCRD and the IMF are in agreement about the source of the challenges. For the BCRD, they respond to “a complex international scenario of strong volatility and tightened global financial conditions, together with a slowdown in tourism.” In other words, three main factors have hampered the country’s productive pace throughout the year. Nevertheless, it is not all bad news. In fact, there have been some segments that have not only sustained the momentum but have also kept the Dominican economy in gear one month after another. These are the Dominican Republic’s most dynamic sectors in 2025, according to monthly data released by the BCRD, which can also provide relevant information to understand economic growth in the Dominican Republic in 2025.

January: A solid start for several productive areas

January 2025 began on a positive note. The Dominican Republic’s economy expanded 2.2% during the month, with several activities reaching high figures. First, agriculture recorded growth of 4.7%, driven by good climatic conditions, high yields in the principal crops, and stable prices. Free zone manufacturing also stood out, growing 3.9% amid a recovery in demand from the United States and the advance of logistics modernization efforts inside the industrial parks. Local manufacturing also reached 3.2%, with the more vigorous production of food, beverages, and construction materials, while the services sector maintained a firm performance (3.1%), benefiting from finance, telecommunications, and business support activities. January was, therefore, a banner month for an economy that saw much more variability in other months, but which, despite everything, had important pillars contributing to growth in the Dominican Republic.

February: continued high figures in some productive engines

February’s Monthly Economic Activity Indicator (IMAE) only grew 1.5% over the previous month, indicating a slower pace, as was to be expected after a strong January. In any case, several areas of activity continued to present positive results. Agriculture (4.6%) was already showing some slowdown, but continued to be on an upward trajectory. Local manufacturing (2.8%) also continued on an uptrend, underpinned by stable domestic demand. Financial services (8.4%) experienced one of the strongest growth rates of the month, driven by greater credit activity. Transport and storage (3.9%) also benefited from more freight transport and improvements in logistics corridors. Thus, February also highlights the segments that registered the most stable figures.

March: turbo mode in the first quarter

March, on the other hand, recorded the highest performance in the first quarter. GDP expanded 5.4% over the same month a year earlier, showing a large increase propelled by four major productive areas. Construction activity, for example, grew 14.5%, supported by public infrastructure works and a renewed dynamism in private investment in housing and commercial construction. Free zones also posted an expansion of 11.3%, with textile, medical device, and electronic manufacturing as the main drivers. Financial intermediation also recorded growth of 11.3%, consolidating itself as one of the economy’s most dynamic pillars. Commerce grew 8.9% as well, thanks to higher household consumption and greater inventories of both retail and wholesale operations. In short, March was the most vigorous month of the first half of the year.

April: support for growth in key services

In April, the economy continued to expand, but at a more moderate pace, with a 2.5% increase over the same month a year earlier. The main contributors to this performance were financial services (9.6%), which continued their high upward streak; agriculture (4.8%), supported by livestock and basic grains production; transport and storage (4.8%), which benefited from improved mobility and commercial traffic; and commerce (3.6%) and real estate services (3.4%), two sectors that traditionally also tend to reflect greater economic confidence over the medium term. In short, April confirmed that key services, especially finance and logistics, were playing a central role in the Dominican economy’s resilience.

May: an unexpected month for mining

May, in turn, was the month when mining stood out in the most spectacular way. Mining and quarrying grew by 21%, supported by higher exports of ferronickel, gold, and construction aggregates. Agriculture also grew 5.4%, following its positive performance. National manufacturing also expanded by 2.8%, in line with greater industrial activity. Construction growth, meanwhile, stood at 1.9%, showing signs of tempering after its March high. With these results, economic growth in May was 3.1%.

Mid-year: productive balance sheet for the first semester

At the end of the first semester, the Dominican economy registered GDP growth of 2.4%, supported by agriculture (4.9%), mining and quarrying (2.3%), national manufacturing (1.6%), and free zones (1.2%). Thus, the first semester ended with evidence that, despite the global uncertainty, the most traditional export-oriented and primary production sectors are the ones that had the most weight in supporting the Dominican Republic’s economic growth.

July: new boosts for mining and free zones

In July, total economic activity increased 2.9%, and growth for January–July averaged 2.4%. The sectors that contributed the most growth during the month were mining and quarrying (21%), which continued to benefit from an extraordinary boost in exports; free zones (7.1%), which also maintained their advantage from stable demand; construction (3.8%), supported by continued infrastructure commitments; and the services sector (2.7%) and agriculture (1.8%), which continued to show solid growth contributions.

August and September: months of mixed performance

In August, growth was more modest, at 2.3%. The main sectors that lost momentum were construction and manufacturing, as they were affected by high financing costs and the slowdown of some investment projects. In September, however, several activities experienced a recovery in their results. Agriculture (3.9%), mining and quarrying (3.7%), financial services (7.4%), and tourism (3.3%) supported a growth of 2.2% in that month, highlighting the impact of increased financial activity and sustained demand in tourism, despite some earlier setbacks.

October: A slower ending to the period

In October, growth finally slowed to 2.0%, bringing to an end a period that, from the first quarter of 2025, was characterized by some bursts of dynamism and other months of adjustment. A fact that serves to further illustrate the uneven path of economic growth in the Dominican Republic in 2025.

Takeaways

The Dominican Republic’s economic growth in 2025 was uneven, but some productive engines stood out and played a key role in mitigating more pronounced slowdowns in activity. Such was the case of agriculture, mining, free zones, financial services, and construction. Despite the global pressure factors and the cooling of tourism, these segments have shown signs of resilience and flexibility that have favored the stabilization of the overall economy. In fact, these activities may also become catalysts for a more vigorous and widespread expansion in 2026 if some of the predictions materialize, such as stronger external demand, an easing of domestic financial constraints, and the normalization of investment.

The National Center for Competitiveness’ (CNC) 2025 Foreign Direct Investment Pulse points out that Panama maintains strategic factors for foreign direct investment (FDI), but the country is going through a process of internal frictions that generate a series of frustrations related to bureaucracy, costs of doing business (energy), and specialized talent. The study also suggests that it is necessary to work on consolidating regulatory certainty, expediting the digital transformation of the state, and training human capital to strengthen the country’s investment dynamism and recover the trend before the pandemic, as well as consolidate Panama as a regional hub for innovation, logistics, and sustainability.

The report concludes that it is a matter of time to work hard on reinforcing confidence in Panama foreign direct investment.

Panama maintains a solid competitive attractiveness for foreign direct investment (FDI), sustained by international connectivity, macroeconomic stability, and special economic regimes. Despite this, frictions continue to be observed in attracting new projects to the country. Among the internal factors that affect competitiveness are government bureaucracy, high operating costs (energy), and lack of specialized talent, according to the CNC’s 2025 Foreign Direct Investment Pulse. In this way, the study notes that solving these structural tensions will be key to maintaining the ability to attract Panama foreign direct investment over the long term.

It is recommended to work on prioritizing regulatory certainty, promoting the development of qualified talent, advancing in the digitalization of the state and towards a more aggressive strategy to promote Panama in the international market. This, with the idea that these measures would allow recovery of the previous dynamism, prior to the impact of the pandemic, and give strength to the position of the country as a regional hub for innovation, sustainability, and business.

Recent Panama foreign direct investment performance: partial recovery and cyclical factors

In 2024, FDI reached USD 2.832 billion (equivalent to 3.3% of nominal GDP), up 28.9% over 2023. The performance is explained mainly by reinvested earnings, according to CNC data based on information from the National Institute of Statistics and Census (INEC).

However, in the first half of 2025, net outflows were USD 361.0 million, compared to the USD 1.701 billion posted in the same period in the previous year. This was due to a strong movement of international-license banks by portfolio and bank reorganization, as well as divestments.

In this way, the period recorded positive figures in key segments such as general-license banking (USD 493.6 million), the Colón Free Zone (USD 302.6 million), and other companies (USD 479.9 million), which suggests that the negative result is due to a transitory effect and not to a structural deterioration of the country’s competitiveness. 

This has not been a hindrance for Minister of Economy and Finance Felipe Chapman to remain optimistic about the progress of infrastructure works, measures, and management by the government of President José Raúl Mulino aimed at strengthening investor confidence in Panama foreign direct investment.

“I believe that as we start to see concrete results from the plans that this government is carrying out, foreign investment will begin to accelerate, and we will have an interesting increase in investment in the country. In addition to that, with a renewed reinvestment of profits by companies already established in the country,” Chapman recently said.

The Minister also added that “Panama is already in a race to attract direct and financial investments” with examples such as the acquisition of the Canal railway by an autonomous division of Maersk and the purchase of Cemex’s Panamanian operation by Grupo Estrella. APM Terminals acquired the PCRC for USD 600 million, while Grupo Estrella acquired the Cemex plant for USD 200 million. “With these two operations alone, we are already talking about an amount close to USD 1 billion. That is significant. Close to more than 1% of GDP.  It is a very important percentage derived from private investment. Remember that in Panama, the flow of dollars to the country basically comes through the Canal’s export of services, through tourism, logistics, and banking services, all of which are growing,” Chapman added.

Sector concentration and main sources of capital

FDI was concentrated mainly in the following activities, according to data from CNC:

• Commerce (42%)
• Financial and insurance activities (18%)
• Manufacturing (11%)
• Information and communications (10%)

In that year, commerce and manufacturing were able to recover, while financial activities and information and communications registered negative variations.

FDI stock closed at USD 64.769 billion in 2023, an increase of 3.5% over 2022. The 10 leading countries account for 75.9% of the total (USD 49.165 billion). They include:

• United States (19.6%)
• Colombia (17.3%)
• Barbados (10.3%)

They are followed by Switzerland (7.1%) and the United Kingdom (4.2%). All of them increased their participation above that of 2022, except Spain, which reported a 2.2% decrease. The Netherlands recorded the highest growth, with 15.3%.

Business climate: positive expectations and operational frictions

According to the CNC, 83% of companies state that Panama meets expectations, although a series of frictions continue to be experienced, such as:

• Delays in procedures (33%)
• High energy costs (17%)
• Corruption (17%)
• Transportation problems (17%)
• Shortage of talent (17%)

The most frequently indicated internal risks were changes in regulations (26%), political uncertainty (19%), and bureaucratic burden (13%).

In the external environment, the most relevant risks are associated with global financial volatility (41%), geopolitical instability (27%), and regulatory changes in partner countries (23%).

Expectations for Panama foreign direct investment remain cautiously optimistic:

• 39% of companies stated that they plan to increase their investments
• 50% will maintain current levels
• 11% are considering reducing investment

In this sense, reinvested earnings continue to be the main source of FDI (69%). In this context, companies plan to invest more in human capital (32%), automation and digitalization (27%), new business lines (14%), and infrastructure and R&D (9%).

In the labor market, 44% of companies anticipate an increase in their workforce, mainly by 1 to 10 employees, given the growing demand for bilingual workers with technological skills. In total, only 17% of companies currently export from Panama, however this percentage represents a group that projects growth in external sales.

ESG and outlook for the future

The study also points out that 56% of companies have environmental, social, and governance (ESG) plans. Panama is perceived as a positive environment for advancing ESG processes due to its international positioning and the impulse towards sustainable innovation that it is currently being generated. The corporate priorities are oriented towards reducing carbon footprint, advancing inclusion and diversity, and strengthening gender equality.

Investors see the country’s future in the next five years by consolidating Panama as:

• Regional headquarters (50%)
• Logistics hub (28%)
• Innovation center (11%)
• Export platform (11%)

Foreign companies are mainly responsible for knowledge transfer (63%), corporate social responsibility (21%), and local innovation (13%). These figures provide an idea of the long-term strategic value of Panama foreign direct investment and its multiple contributions to advance the country’s competitiveness in different sectors.

Conclusion

In general, the CNC’s survey affirms that Panama remains a favorable destination for foreign capital, but it is urgent to apply the necessary reforms to unleash the country’s full potential. It is necessary to work on aspects such as streamlining bureaucracy, increasing the scope of  the development of talent, and strengthening regulatory certainty, among others, so that Panama can reinforce its position as one of the most dynamic destinations for investment in the region.

As Mexico’s automotive production ecosystem continues to recover and reposition for a shifting economic environment, Guanajuato maintains automotive leadership thanks to a solid performance in production and new investment.

Recording 828,544 units between January and November 2025, Guanajuato maintains automotive leadership as Mexico’s leading producer of light vehicles, a distinction it holds by a wide margin over other states where automotive production is significant, including Aguascalientes, Coahuila, and Puebla.

Driving Global Competitiveness

Driving this performance are the operations of four automakers:

* General Motors (Silao) at 293,531 units, led by the Silverado Double Cab (136,319 units) and Sierra Double Cab (124,881 units).

* Mazda (Salamanca) with 164,918 units, led by the CX-30 at 101,242 units.

* Toyota (Apaseo El Grande) at 190,866 units, with a standout 153,034 Tacoma pickup trucks produced (a key export model for Toyota in North America) and 37,832 hybrid Tacoma HEV units.

* Honda (Celaya) with 179,229 units, led by its HR-V model at 148,537 units and then by the new Acura ADX with 30,692 units.

As for plant utilization, data from El Economista underscores a region with diverse models and strong operational efficiency. For example:

* Honda Celaya is at 97.76% utilization for its 200,000-unit capacity facility.

* Toyota and GM plants are at just below 80% utilization.

* Mazda vehicles are at 71.96%.

What is more, amid global headwinds that include supply chain volatility, tariff and trade pressure, uncertain logistics and freight disruptions, and a rapidly shifting automotive commercial and product landscape, these utilization rates are indicative of a region maintaining a healthy pace of production despite all these factors. On the outlook for year-end numbers, while Guanajuato will fall short of its 2024 historic record of 913,120 units, the state is on pace to close the year with a volume between 870,000 and 884,000 units (a -1.7% to -4.7% decline vs the previous year). Even so, Guanajuato maintains automotive leadership as it also plays a key role in North America’s automotive supply chain and value-added mix—particularly the export of pickups and SUVs.

Likewise, the momentum of automakers such as Honda and Toyota with new hybrid vehicles and next-generation platforms in particular continues to strengthen the strategic position of the state within an industry rapidly transitioning towards electrification.

Magnet for Investment: Guanajuato Adds Over USD 260 Million and 33 Automotive Projects in 2025

In addition to installed capacity, Guanajuato maintains automotive leadership in investment attraction, with the highest number of announced projects in 2025.

Specifically, the state counted 33 projects announced and in the process of development through September 2025. By comparison, next was Querétaro with 26. In value, Guanajuato also had the highest announced investment between January and September 2025, at USD 262.12 million, according to the Automotive Investment Report Q3 2025 from Cluster Industrial.

Cumulatively, these 33 projects represent more than 3,000 new jobs and 323,495 m² of industrial construction and continue to reaffirm the state’s position as an attractive destination for advanced manufacturing, electronics, structural components, and electromobility.

From the first through the third quarter of 2025, some of these new investments included:

* Cheersson (Ruima Precision): Precision metal forming plant for auto parts in Apaseo el Grande, with an investment of USD 3.4 million and a built-up area of 52,297 m².

* Forvia Hella: USD 15.4 million for a new electronic units and remote key fob production plant in Amexhe.

* Mubea (Germany): USD 60 million for precision steel tube manufacturing in Celaya (18,000 m² industrial space).

* Ampure (USA): USD 4 million for expansion in León in support of electric-vehicle charger production.

* Pangea Made and Waldaschaff (Germany): León expansions for production of interiors and vehicle impact-structure components.

Announced projects through the fourth quarter of 2025 in Guanajuato included:

* SH PAC (South Korea): USD 40 million in investment for a new production plant in León and 120 new jobs.

* Sinoboom (China): Record USD 150 million investment for its new plant in Guanajuato Puerto Interior, creating 700 new jobs.

* Taigene (Taiwan): Expansion in the Colinas de León I with an investment of USD 33.4 million.

* Tongling México (China): USD 91 million for a new plant in Marabis Castro del Río that will have up to 540 jobs created through two phases of operations.

These investments contribute to not only the state’s potential to surpass the national production record of 913,000 units set in 2024 in 2026, but also to expand its industrial profile in advanced technologies, precision manufacturing and components with increasing relevance to the energy transition.

Conclusion

In a year marked by numerous changes for the automotive industry, Guanajuato maintains automotive leadership not only through production volume but through an ecosystem of manufacturing, innovation, and competitiveness with global resonance. With strong production from automakers that continue to lead the Mexican market, increasing output of next-generation vehicles and hybrid models, high plant utilization rates, and foreign and domestic investment, Guanajuato is setting the future of the automotive industry for the rest of North America. As it deepens its industry in electromobility, advanced manufacturing, and strategic integration into the auto sector’s supply chain, Guanajuato is positioning itself to remain a force to be reckoned with in Mexico’s industrial future and an essential player in the automotive sector’s next ten years.

High-net-worth clients are choosing the country as a center for estate planning and tax residency.

Brazil has long been a major buyer of Uruguayan goods and a key source of foreign direct investment, especially in industry and agriculture. This established economic relationship has set the stage for the recent surge in Brazilian investment in Uruguay, which has expanded notably in recent years.

Following the pandemic, this relationship gained momentum and diversified. New investor profiles have emerged, and interest has broadened. Experts note that Brazilians are now motivated by both business opportunities and lifestyle and long-term wealth planning.

Experts report that this trend is accelerating due to global uncertainty and recent tax reforms in Brazil. These factors are reshaping decisions and strategies for companies, investors, and prospective residents.

“There are high-net-worth clients who look to Uruguay as a center for estate planning or tax residency. We see this reflected in the closing of deals aimed at obtaining tax residency in Uruguay, as well as in relocations to the country’s interior and to areas such as Punta del Este. These decisions show that Uruguay is consolidating itself as an attractive center for estate planning and tax residency for high-net-worth clients,” said Javier Elenberg, managing partner at RSM Uruguay. This firm provides accounting, auditing, consulting, and tax services.

In terms of investments, Sebastián Risso, former executive director of Uruguay XXI and now director of his own consultancy, El Faro Advising, explained that new trends involve Brazilian companies seeking to establish a services and logistics hub in Uruguay. In addition, investors from this country are beginning to focus on the real estate, hospitality, and manufacturing sectors, taking advantage of free-zone regimes and temporary admission systems, among other tools offered by the country. These developments further reinforce the profile of Brazilians investing in Uruguay as a diverse and expanding segment.

This, he clarified, does not mean that Brazilian companies are considering leaving their country, but rather that they are interested in having a foothold in Uruguay to support their operations in Brazil. Moreover, the Uruguayan market is appealing as a first step abroad or as a testing ground for operations.

“The sectors currently generating the most interest among Brazilian investors are land and real estate. These areas offer strong and secure opportunities that align with the expectations of those seeking to diversify their assets or settle in Uruguay,” Elenberg noted. This aligns closely with the broader profile of Brazilians investing in Uruguay who prioritize stability, asset diversification, and long-term residency options.

Meanwhile, Francesca Magno, a partner at the global legal and tax services firm Andersen in Uruguay, said that many Brazilian family offices are planning part of their investment structures in Uruguay.

Beyond investments, consultants are also identifying a growing number of Brazilians interested in residing in Uruguay. In addition to tax considerations and the country’s stability, security is a fundamental factor, said Magno.

Punta del Este and Montevideo are the main hubs of interest for this group, which, according to Risso, consists mainly of families with parents aged 30 to 40 and school-age children.

RSM added that the profiles showing the greatest interest in relocating are, socioeconomically, middle- and upper-income individuals. They also note growing interest from young freelancers attracted by the country’s quality of life, as well as from business owners seeking to retire in a peaceful and safe environment.

“That stimulates the economy, because these are high-income families who use schools, hospitals, and local gastronomy,” said the former head of Uruguay XXI. The growing flow of Brazilians investing in Uruguay is therefore also having a secondary economic effect on services and local commerce.

The Reasons Behind the Increase in Inquiries

One of the most recent reasons that has accelerated the volume of inquiries, according to consultants, relates to the tax reform promoted by the government of Luiz Inácio Lula da Silva and unanimously approved in both chambers, which significantly redefines how the tax burden is applied in Brazil.

The proposal eliminates income tax for those earning up to 5,000 reais per month — about US$936 — and increases the burden on taxpayers with annual incomes above 1,000,000 reais.

“This type of change tends to generate greater interest in seeking more stable and favorable alternatives, and Uruguay is positioning itself as a concrete option for those looking for security and tax advantages,” Elenberg said.

But these changes, which will be implemented gradually over the coming years, represent only the tip of the iceberg for broader reasons. Some business owners are even observing the process cautiously, preferring to remain on standby and avoid anticipating major shifts until they see how the reform actually unfolds.

Another contributing factor is the presidential election scheduled for next year, which is generating strong uncertainty regarding Brazil’s political and economic direction.

Beyond political issues, Magno noted that economic factors also play a significant role in this trend.

One such factor is the limitation Brazilians face when trying to save in U.S. dollars within their own banking system. This restriction forces them to keep their wealth and investments tied to the real. Uruguay, by contrast, allows saving and transacting in dollars, enabling them to access the international economy more directly.

Although they could also do this in the United States or Europe — in euros — Uruguay emerges as a much closer option, making it particularly attractive for those looking to protect their capital. Along these lines, the greater interest in Uruguay is also explained by recent regulatory changes in countries such as Portugal and the United States, markets that until recently captured much of Brazilians’ attention.

“The global context makes Uruguay a country people are keeping an eye on,” Magno said.

The consultancy stressed that in order to sustain and further encourage these trends, it is essential to “take care of the country”: maintaining and strengthening security, as well as ensuring strong connectivity — two pillars considered indispensable for preserving Uruguay’s appeal in the region.

Other Investor Profiles Growing in Importance

In addition to Brazilian investors, Santiago Pierro, founder and chairman of the real estate developer Liderus Holding, communicated that Chilean interest in real estate investments has grown sharply, increasing by more than 30%, although their overall share remains small. In Punta del Este, this group is especially drawn to annual rental income, the quality of the beaches, the glamour of Uruguay’s eastern coast, and the variety of tourism options.

Another group on the rise is Paraguayans. “It has increased much more sharply — it has more than doubled — and what we’re seeing is that they are seeking to spend a large part of the year in this area,” he said.

“They generally settle in La Brava up to San Rafael and in La Mansa up to Las Delicias. They look for a store of value, a second home, and the feeling of belonging to a place internationally valued for its beauty and vast range of options in every sector,” he explained.

Conclusion

The current wave of Brazilians investing in Uruguay reflects a broader regional shift driven by economic uncertainty, tax policy changes, and the search for security and quality of life. Uruguay’s stability, favorable tax framework, and strong institutional environment have positioned it as a preferred destination for Brazilian capital and residency planning. As these trends continue to grow, Uruguay is likely to consolidate further its role as a strategic hub for South American investors seeking long-term opportunities and greater peace of mind.

In remarks at the time of the signing, President Noboa himself underscored Ecuador’s desire for international cooperation. “Ecuador is open to investment, growth and international partnerships,” Noboa said. He also characterized the treaty as “the opening of a new market, with new direct investment, more exports and, therefore, the creation of job opportunities” for the Ecuadorian people.

The president also noted that the agreement benefited both Ecuador and the rest of the world. “For the world, it means that Ecuador is a trustworthy country, ready to become a productive engine,” Noboa added on X. This communication, in particular, makes clear the government’s overarching goal of further integrating Ecuador into global value chains and economic networks, as well as reinforcing the country’s brand as a destination for foreign investment. In this regard, the investment promotion treaty between the UAE and Ecuador is expected to be a major foundation of Ecuador’s new strategy for making itself more visible in the international arena.

A New Agreement on Integrity and Anti-Corruption

On another note, the two countries also signed a Memorandum of Understanding (MOU) on integrity and the prevention of corruption. This MOU illustrates how both parties are of the opinion that transparency and accountability are the basis for any kind of sustainable economic development. The agreement will allow both parties to develop their respective strategies, methods, and tools to avoid and fight corruption.

Additionally, the MOU foresees cooperation in terms of capacity-building, professional training, and exchange of experiences, initiatives, and good practices in the areas of integrity, transparency, and institutional accountability and public ethics. In a context in which investors are more demanding of the countries where they invest and push for high standards of governance, this MOU also contributes to the credibility of future investments between the United Arab Emirates and Ecuador.

Advancing Technology, Innovation, and AI Cooperation

Secondly, both countries also signed an MOU in support of an international Technological Innovation Corridor. This MOU is designed to enhance bilateral cooperation in areas such as artificial intelligence (AI), digital transformation, advanced research and development, and frontier technologies. By teaming up with a country that is a regional leader in smart governance initiatives and technological innovation, Ecuador looks forward to accelerating its own process of digital development, including the consolidation of its startup ecosystem.

With this new alliance, Ecuador aims to attract cutting-edge technologies to the country and boost entrepreneurship in areas like fintech, software, digital logistics, biotechnology, clean technologies, and artificial intelligence. In this context, the MOU also includes measures to encourage academic and research exchange and the generation of joint ventures between the countries.

In this way, the technology and innovation corridor between the United Arab Emirates and Ecuador provides a template for how the investments between the two can be channelled to encompass knowledge-based industries, innovation clusters, and the digital economy. These areas, in particular, are essential for countries looking to carve out a competitive advantage in an increasingly globalized and fast-changing world economy, as well as diversify their productive structure.

A Wider Effort to Expand Internationally

Daniel Noboa’s visit to the UAE and the agreements that he was able to close with the Emirati government form part of Ecuador’s larger foreign policy and diplomatic strategy. By diversifying its portfolio of economic partnerships and expanding abroad, Ecuador is seeking to insulate itself from external risks and create new channels for trade, investment, and technological exchange.

Countries like the UAE, which have deep pools of sovereign wealth, a global logistics footprint and world-class infrastructure are natural partners for countries seeking to supercharge development with foreign investment. Ecuador’s decision to deepen investments between the United Arab Emirates and Ecuador should therefore be viewed in the context of this broader desire to create confidence and strategic ties that support innovation, economic modernization, job creation, and more sustainable growth.

Taken together, the investment protection treaty, anti-corruption MOU, and technological innovation partnership are all significant steps toward a new phase in Ecuador-UAE collaboration that is based on transparency, innovation, and long-term development. The investment promotion treaty between the UAE and Ecuador, and the coming into force of the necessary implementing regulations, will be central to this process going forward.