+1 (520) 780-6269 investment@latamfdi.com
Invest in Guatemala with Juan Esteban Sanchez

Invest in Guatemala with Juan Esteban Sanchez

by | Dec 28, 2024 | FDI Latin America, Podcast

Juan Esteban Sanchez
Director 
Invest Guatemala
esanchez@investguatemala.org

LATAM FDI:  Today, Juan Esteban Sánchez, the executive director of Invest Guatemala, is with us. First, I want to welcome you to the podcast. Could you please tell us a little bit about yourself and your organization for our audience?

Juan Esteban Sanchez: Oh, hello, Steve. Thank you very much for this kind invitation. Yes, my name is Juan Esteban Sánchez. I am a Colombian guy just working to attract investment in  Guatemala. I’m an economist, but I also have almost four degrees in financial valuation. I worked in investment banking for nearly 10 to 15 years in Colombia. Then after, I became involved in the investment promotion agencies I was working for ProColumbia as a director of the offices of ProColumbia, the Commercial and Investment Bureau of Colombia in Guatemala, dealing with the bilateral relations between Colombia, El Salvador, Honduras, and Guatemala, but also Belize. Then after, I managed the ProColumbia office in Mexico for two years, one really important market. My last work in ProColumbia was working in India for almost five years, in the business relationship between Colombia, India, and the MENA region, the Arabic countries. After that, I came back to Guatemala, where I married a beautiful lady, and I’m now working as the executive director of the country’s private investment promotional agency, Invest Guatemala.

LATAM FDI: Well, let’s get into some information about investment in Guatemala from the perspective of foreign investors. What are the key advantages of Guatemala compared to the other countries in the region?

Juan Esteban Sanchez: To answer your first question, Invest Guatemala is a private institution that is the umbrella of an initiative that you can call the 2032 vision of Guatemala. It was created by the private sector and is called Guatemala Moving Forward. We, Steve, work at six working tables that try to improve the conditions for foreign companies just to come here to invest in Guatemala. Then, after these six working tables, they are related to human capital conditions, infrastructure, tourism, and agroimpact. It’s named after it. And the more important one is legal certainty. So, in this regard, I aim to create more good quality jobs here. Guatemala has excellent conditions for foreign investors at these levels. The first one is macroeconomic stability. I’ve been working in a promotional agency in the past; you can say that all the countries, Steve, many say that their government has real macroeconomic stability. But Guatemala, for sure, is one of them. The growth in Guatemala has been going on for almost 10 years in a row. We’ve been just growing at nearly 3.5 % in real terms.

The second one is that the exchange rate in Guatemala has been stable for almost 20 years, at around 7.5 quetzales per dollar. It is important to do business with that country for exportation, importation, and even domestic sales. The other one is that Guatemala has been working to create good conditions economic relations other countries. Guatemala has around 15 free trade agreements and 19 reciprocal investment agreements with some interesting countries. Guatemala must be one of the only countries with good diplomatic and commercial relations with Taiwan. And this is important for some companies in the world. The other thing is that Guatemala is just going down the path to get the investment grade. Fitch, Moodys, and Standard & Poor say that Guatemala has the macroeconomic condition to get the investment rate. Still, we have to work on the institutional side of the business to motivate companies to invest in Guatemala. Reinforcement of the law, an investment law, etc. It’s important to highlight that the average age of the population in Guatemala is around 26 years.

This is important because we have a demographic bonus that we need to take advantage of to get companies to invest in Guatemala. It is important for the company that wants to do business here. Why? Because there is a loyal workforce, we also have a population that, in the future, will have new families, buy new homes, and ask for public services. And this is an excellent opportunity for companies that provide services to a population, especially here in Guatemala. The other thing is that it is attractive to invest in Guatemala because it is the northernmost country in Latin America before Mexico. And this is important. Why? Because of the nearshoring strategy that I believe you have been hearing about for the last 20 years, Steven. But what about the conditions to invest in Guatemala? We can create some excellent prospects regarding nearshoring to North America, including Mexico. Okay. Then, there is an interesting point: Guatemala has a significant power generation matrix from renewable sources. Guatemala’s generation power matrix currently generates 60 % of its power from renewable sources.

We have great opportunities for companies that want to invest in Guatemala to pursue excellent business ideas in solar, electric, and hydropower generation.

LATAM FDI: You mentioned Guatemala’s demographic advantages and geography. But what support does Guatemala give to foreign investors in terms of any tax incentives that may exist to create regulatory ease? What investment protection is there to invest in Guatemala?

Juan Esteban Sanchez: This depends on the sector you are in. But Generally, Guatemala has one of the most flexible tax systems in Latin America, Steve. If you want to create a company, that is relatively easy; maybe in one to two weeks, you can create your own company, even for a foreign investor seeking to invest in Guatemala. You can choose if you want to pay, for example, income tax or ISR. It’s ISR in the United States. But you can pay 7% over the total income or select 25 % over your operational gross profit. And this is important because you can choose, and you can play with the costs. But depending on the sector, we have a special regime where you can be a company and settle a plant. You can be in an economic free trade zone. We can say that, yes. You can import, process, and export your product without paying taxes here. So, if you are in a free trade zone here, you can import without paying any tariff from some countries, but also you can export, and then you are not obligated to pay the tax here.

But if you want to sell your product, I’m sorry for the name. For example, you have some excellent conditions for optimizing the VAT in the free trade zone. But again, it depends on the sector you are just working in when you invest in Guatemala. From some country, from some industry, Steve, I would like to tell you that I used to work in investment banking. I was evaluating some energy projects here. If you want to invest in a power generation company that produces less than 5 megawatts, You have zero tax for 10 years. And this is important.

LATAM FDI: That’s significant. You mentioned the demographics again. I’m going to go back to that.

Juan Estaban Sanchez: Yes, go ahead.

LATAM FDI: What does that mean regarding the workforce capabilities and the availability of skilled labor? What workforce can a foreign investor expect to find when seeking to invest in Guatemala?

Juan Esteban Sanchez: I say, Steve, that it’s always important to be optimistic but realistic. We have a challenge because we have tremendous competition from migration. The United States consumes a significant part of Guatemala’s workforce. We have a private and public institution called INTECAP. It’s imperative to have this, Steve. They prepare the people, the young generation, regarding technological skills. If you want to be a carpenter, you can receive training for ITECAP. It’s the base for our workforce. If you get a title from INTECAP, it may require a three-month educational period. In the United States, they are pleased to get these people because they know that people from INTECAP are a quality workforce. So, we have a competition there. We have a challenge in that through INTECAP and universities. We have to prepare the young generation to have the skills for the future needs of international companies that want to invest in Guatemala, and it could be a little bit romantic, Steve, that something important here in terms of the workforce is that these people do outstanding hard work.

They are also really loyal and believe in family. So, we can offer companies looking to invest in Guatemala some excellent conditions in terms of skill. They can stay here and transfer that to the company that is coming here. The other thing is that we may be a country of around 18.4 million people, and around 11 million people can work. So, we can bring many people to the companies there.

LATAM FDI: Well, that’s the human infrastructure. Physical infrastructure is essential to foreign investors as well. What infrastructure developments or improvements are currently happening in Guatemala that would interest foreign direct investors?

Esteban Sanchez: Yes. A month ago, Congress approved a new law on infrastructure. This allows us to create some excellent opportunities for foreign companies to invest in Guatemala to improve the roads, not only the main but also the rural ones. There will be plenty of opportunities for investors and sovereign or private equity funds next year. They can come here to finance new road projects. The other one is that we are trying to help the government create the conditions for the modernization of the airports. In Guatemala, there are only two international airports, one in the capital city and the other in Petén, which is in the far north and close to one of the more important tourist attractions, called Tical. It will be vital if we can work to modernize the small airports, even for local or domestic trips. And I believe there will be outstanding opportunities for the companies abroad to invest in Guatemala.

The other one is between this year and the following year, and we are talking about weeks of difference; we will have two main competitions to increase the power generation metrics here in Guatemala. And the other one is to improve the power transmission system. As a small number here, Steve, Guatemala needs around four 4,500 new kilometers of network to consume or transport the energy we will generate in the next five years. The other one, and I believe there will be some information shortly, is that we will open excellent ports opportunities. Remember that because we have an excellent relationship with Taiwan, we need an investor different from the Chinese. So, it’s a geopolitical opportunity to invest in Guatemala. This is important to know for the companies listening to this podcast.

LATAM FDI: Well, we’ve talked about human infrastructure; we just got through talking about physical infrastructure. Let’s talk about trade infrastructure. How is Guatemala positioned within the Central American region regarding trade agreements, access to regional markets, and logistics networks?

Juan Esteban Sanchez: Sure. Okay. Then again, you can hear Steve for all the investment promotion agencies (IPAs) in the world that my country has the best location. You can listen to that. But it is challenging to sell that point. Because of its proximity to global markets, Guatemala is on the border with Mexico. We are also the biggest economy in Central America, but we have a free trade agreement with all the Central American countries. However, we are also the main gate to some countries in the Caribbean. So, for a company that wants to invest in Guatemala, it is a huge opportunity because of location, tariffs, and proximity to the markets. Talking about our 15 free trade agreements, we can approach almost all the countries in the world. But seriously, the opportunity in terms of commerce is how you can create your company here in order not just to produce but to export to Mexico, the United States, and Canada. And we are working on that. When talking about the new administration of the United States, companies will have a massive opportunity to invest in Guatemala to change the supply from China to Asia, especially to give American companies a chance to have a close source.

To highlight, Steve, if you establish a company in Guatemala, your transit times in Miami may be around three days. But also, if you want to bring some products to Los Angeles, for example, that is excellent marketing here, there’s just seven days. Now, consider that you can export your products and then transport them by road because of the border with Mexico. Significant projects from the Pacific and the Atlantic will bring some train systems that can connect the train system of Mexico. It will be an excellent signal for the investor.

LATAM FDI: Well, as with most podcasts, I have the pleasure of speaking to very interesting and informative people; we’ve covered a lot of information in a relatively short time. Experience has shown in the past that listeners to the podcast often have questions that are related to what they’ve heard. I want to ask participants in the podcast if they would make themselves available to any listeners for questions they might have. Could you share your email address? Could you have their LinkedIn profile on the web page on which the podcast sits? Can people with a desire for more information get in contact with you?

Juan Esteban Sanchez: Absolutely. It would be great to hear what the people are looking for about investing in Guatemala. Remember that, Steve, that through the free trade agreement, we are just capable of bringing some products to almost 1.5 billion consumers in the world. Especially if anyone is interested looking to invest in Guatemala, we are working to increase the opportunities in agribusiness, packaging, BPOs, and pharmaceuticals. Well, pharmaceuticals are very difficult. We will be more than interested in answering and giving the information to any investor who wants us to see Guatemala as a big opportunity. I don’t know if you want me to bring some information about my email or something.

LATAM FDI: Well, what I can do, which I’ll do for expedience, is put a link to your LinkedIn profile on the podcast page in the transcript section.

Juan Esteban Sanchez: Great.

LATAM FDI: I’ll include your email address and a link to Invest Guatemala. Would that be okay?

Juan Esteban Sanchez: It would be great, please.

LATAM FDI: Well, speaking with you today has been a great pleasure. I’ve learned a lot, and I’m sure that people who listen to this podcast will also learn a lot. Thank you for taking part in this discussion.

Juan Esteban Sanchez: Thank you very much, Steve. I’m looking forward to another opportunity to discuss this in the future.

LATAM FDI: Of course. Thank you.

Juan Esteban Sanchez: Thank you very much.

Costa Rican Economic Outlook for 2025: Controlled Inflation, Lower Interest Rates, and Exchange Rate Stability

Costa Rican Economic Outlook for 2025: Controlled Inflation, Lower Interest Rates, and Exchange Rate Stability

by | Dec 27, 2024 | FDI Latin America

The Costa Rican economic outlook for 2025 appears highly favorable, underpinned by projections of low inflation, potential reductions in interest rates, and a stable exchange rate. This optimistic scenario positions the country as a reliable economic growth and stable environment, benefiting businesses, consumers, and investors.

Macroeconomic Stability and Inflation Projections

One of the standout features of the Costa Rican economic outlook for 2025 is the projection of controlled inflation. Javier Cortés, economist and investment strategist at BN Valores, emphasizes that these forecasts suggest a conducive environment for key macroeconomic indicators. Inflation is expected to remain below the Central Bank of Costa Rica’s (BCCR) target range during the early months of the year. This favorable trend is primarily attributed to declining international prices for essential raw materials, including fuels and imported foodstuffs.

Lower inflation translates into significant advantages for the Costa Rican economy. It boosts consumer purchasing power, stabilizes the cost of living, and reduces uncertainty for businesses. Additionally, the containment of inflation provides the BCCR with the flexibility to adjust its Monetary Policy Rate (MPR). By lowering the MPR, the Central Bank can stimulate economic activity, encouraging borrowing and investment across various sectors.

Interest Rate Dynamics and Transmission Challenges

While the outlook for interest rates is positive, specific dynamics could moderate the extent of reductions in borrowing costs. The anticipated decline in the MPR hinges on the behavior of interest rates in the United States. Should U.S. rates adjust more slowly than expected, the room for Costa Rica’s MPR to decrease significantly could be constrained. This interconnectedness reflects the global nature of financial markets, where decisions by major economies ripple through smaller, open economies like Costa Rica’s.

Another critical consideration is transmitting lower interest rates to local credit markets. Historically, there has been a lag in how quickly reductions in the MPR translate to lower interest rates for consumers and businesses. This phenomenon was evident in 2023, when such transmission occurred slower than historical trends. For Costa Rica to fully capitalize on the potential benefits of lower rates, financial institutions must enhance mechanisms that facilitate this transmission, particularly for consumer loans. Greater accessibility to affordable credit could spur domestic consumption and investment, further bolstering economic growth.

Exchange Rate Stability and Foreign Currency Dynamics

The exchange rate is another pillar of the Costa Rican economic outlook for 2025. Projections suggest a modest 3.4% increase in the exchange rate by the end of 2025, with the dollar expected to reach approximately ₡527. This slight adjustment reflects a balanced and stable foreign exchange market supported by several favorable factors.

Key among these factors is the robust growth of free trade zones, which continue to attract significant foreign direct investment (FDI). Costa Rica’s free trade zones have long been a magnet for multinational companies, offering strategic benefits such as tax incentives, skilled labor, and proximity to key markets. The continued inflow of FDI ensures a steady foreign currency supply, which helps stabilize the exchange rate.

In addition, a contained external deficit contributes to exchange rate stability. Costa Rica’s ability to manage its balance of payments effectively minimizes vulnerabilities to external shocks. However, potential challenges loom on the horizon. For instance, the introduction of generational pension funds could shift the investment preferences of pension fund operators towards international assets. This shift might exert upward pressure on the exchange rate, necessitating vigilant monitoring by policymakers to mitigate any destabilizing effects.

Implications for Businesses and Investors

The Costa Rican economic outlook for 2025 creates a stable and predictable business planning and investment environment. Controlled inflation ensures that businesses can project costs more accurately, reducing risks associated with price volatility. Moreover, lower interest rates improve access to affordable financing, enabling companies to expand operations, invest in innovation, and enhance competitiveness.

The country’s stable exchange rate is particularly appealing to international investors. It reduces currency risk and provides a reliable framework for financial planning. The growth of free trade zones further enhances Costa Rica’s attractiveness as an investment destination, offering unparalleled opportunities in sectors such as technology, manufacturing, and services.

Consumer Benefits and Economic Growth

The favorable economic conditions projected for 2025 will yield tangible consumer benefits. Lower inflation preserves households’ purchasing power, allowing them to allocate resources more efficiently. At the same time, improved access to credit at lower interest rates empowers consumers to make significant purchases, such as homes and vehicles, or invest in education and entrepreneurial ventures. This, in turn, stimulates demand and supports broader economic growth.

The stable exchange rate also reduces uncertainties related to imported goods and services. For a country like Costa Rica, which relies on imports for various essential products, this stability ensures that price fluctuations in global markets have a limited impact on domestic consumers.

Potential Risks and Mitigation Strategies

While the Costa Rican economic outlook for 2025 is optimistic, certain risks warrant consideration. Global economic conditions, particularly in major trading partners like the United States, could influence Costa Rica’s macroeconomic stability. Policymakers must remain agile and proactive in addressing external shocks, such as shifts in global commodity prices or changes in international interest rates.

Domestically, ensuring the effective transmission of monetary policy to credit markets will be crucial. Strengthening the financial sector’s capacity to respond to policy adjustments can maximize the benefits of lower interest rates. Furthermore, careful monitoring of pension fund investment trends will be necessary to manage potential pressures on the exchange rate.

Conclusion

In summary, the Costa Rican economic outlook for 2025 highlights controlled inflation, declining interest rates, and a stable exchange rate. These conditions provide a robust foundation for economic growth and stability, offering a favorable environment for businesses, investors, and consumers. While specific international and domestic dynamics may pose challenges, the country’s strong macroeconomic fundamentals position it well to navigate these complexities. As Costa Rica continues to build on its economic strengths, the outlook for 2025 underscores the nation’s resilience and potential for sustained prosperity.

The Dominican Republic’s Efforts to Expand as a Logistics Hub in Latin America

The Dominican Republic’s Efforts to Expand as a Logistics Hub in Latin America

by | Dec 27, 2024 | FDI Latin America

During the third summit of the Alliance for Development in Democracy (ADD) in Panama in 2024, the Dominican Republic reaffirmed its commitment to becoming a pivotal regional logistics hub in Latin America. The Dominican delegation, led by the Minister of Industry, Commerce, and MSMEs, Víctor Ito Bisonó, and the Deputy Minister of Free Zones and Special Regimes, Johannes Kelner, presented ambitious plans to strengthen regional supply chains and promote sustainable development.

The summit served as a platform to evaluate progress made in 2024 and establish strategic priorities for 2025. The Dominican Republic’s active role in the ADD was underscored by its position as the third-largest trading partner of the United States, highlighting its strategic importance in fostering economic stability and supply chain security across the region.

“Our commitment is to support the strategy promoted by the alliance through economic integration in critical sectors, creating a collaborative environment that strengthens the local economy, fosters foreign investment, and encourages the creation of new opportunities and jobs in our nations,” emphasized Minister Bisonó.

Key Focus Areas for Strengthening Supply Chains

The summit’s discussions centered on streamlining administrative processes, enhancing human capital, and consolidating value chains in strategic sectors such as medical devices and pharmaceuticals. Given the Dominican Republic’s robust manufacturing capabilities and established free trade zones, these sectors represent high-growth opportunities for the country.

A critical topic of conversation was the strategic role of the Panama Canal, through which 5% of global trade passes. The canal’s importance as a logistical artery connecting regional economies was highlighted, reinforcing the need for stronger Dominican-Panamanian trade relations. Minister Bisonó reiterated the Dominican government’s commitment to improving logistics and trade connectivity with Panama, positioning the Dominican Republic as a competitive and resilient logistics hub in Latin America capable of serving global markets.

Progress in 2024 and Setting Priorities for 2025

The Dominican Republic has already achieved significant milestones under the ADD framework. Leading the technical working group on medical devices, the country prioritized human talent development and regulatory convergence, essential for enhancing regional competitiveness. In parallel, Panama’s leadership of the technical working group on pharmaceuticals facilitated advancements in regulatory best practices and clinical trials. These initiatives reflect a shared commitment to innovation and collaboration.

Minister Bisonó highlighted the Dominican Republic’s strategic direction: “The work carried out this year reaffirms our commitment to sustainable and inclusive development. At this summit, we have outlined a roadmap for 2025 that aims to generate quality jobs, attract investment, and strengthen regional cooperation.”

The roadmap for 2025 includes actionable goals such as:

  • Advancing digitalization to streamline trade processes.
  • Investing in infrastructure to support logistics and manufacturing.
  • Expanding free trade zones to attract multinational corporations.
  • Developing workforce skills to meet the demands of emerging industries.

Strategic Meeting at the Panama Canal

Minister Bisonó’s strategic meeting at the Panama Canal highlighted the summit. Accompanied by José Ramón Icaza Clément, Minister for Canal Affairs of Panama, and Dr. Ricaurte Vásquez Morales, Administrator of the Panama Canal Authority, the leaders discussed strategies to enhance connectivity between the two nations. By leveraging the canal’s logistical significance, the Dominican Republic and Panama aim to consolidate their roles as key logistics hubs in Latin America, benefitting the broader region.

The meeting underscored the importance of infrastructure development and collaborative efforts to ensure supply chain resilience. For the Dominican Republic, strengthening its partnership with Panama represents a critical step toward achieving its vision of becoming a global trade destination.

About the Alliance for Development in Democracy (ADD)

The ADD is a cooperative initiative comprising the Dominican Republic, Costa Rica, Panama, and Ecuador, with the backing of the United States. It aims to foster economic growth, strengthen supply chains, and promote sustainable regional development. Since its inception, the ADD has prioritized collaboration in sectors critical to the region’s competitiveness, including logistics, manufacturing, and pharmaceuticals.

With the 2024 summit, the ADD concludes the year by establishing a clear framework for action in 2025. By prioritizing trade, investment, and regional development, the alliance continues to drive forward its mission of creating a more integrated and prosperous Latin America.

The Dominican Republic’s Vision for Regional Leadership

The Dominican Republic’s efforts to become a regional logistics hub in Latin America align with its broader vision of economic integration and sustainable development. Through initiatives led under the ADD, the country seeks to:

  • Enhance its manufacturing and export capabilities.
  • Strengthen its position as a gateway for global trade.
  • Foster innovation through public-private partnerships.

By investing in infrastructure, talent development, and regulatory harmonization, the Dominican Republic is positioning itself to capitalize on the growing demand for resilient supply chains. These efforts benefit the nation and contribute to regional stability and economic growth.

Conclusion

As the Dominican Republic looks toward 2025, its role within the ADD and its partnership with Panama underscore a commitment to regional collaboration and global trade. By focusing on strategic sectors, fostering innovation, and strengthening connectivity, the country is well on its way to becoming a leading logistics hub in Latin America. The efforts showcased at the ADD summit reflect a forward-thinking approach to economic development, ensuring a prosperous future for the Dominican Republic and its partners.

Guatemalan Tech Services Exports Increase by 3% in 2024

Guatemalan Tech Services Exports Increase by 3% in 2024

by | Dec 27, 2024 | FDI Latin America

Guatemala has recorded a remarkable 3% increase in the export of technological services in 2024 compared to the previous year. This growth reflects the country’s ongoing efforts to position itself as a technological leader in the region. With Guatemalan tech services exports totaling $51.6 million in the first half of the year, Guatemala is leveraging its expertise in custom software development, cybersecurity solutions, mobile app development, data analysis, big data, and IT consulting to capture new opportunities in global markets.

Expanding into Key Global Markets

Guatemala is strengthening its presence in strategic U.S. markets such as Los Angeles, Miami, and Washington. These cities, known for their thriving tech ecosystems, provide fertile ground for Guatemalan businesses to expand their reach and establish valuable partnerships. Beyond the United States, Guatemalan tech services exports actively explore new commercial connections in Europe and Asia, further diversifying their export destinations.

“During 2024, the Commission achieved a 3% increase in the export of technological services compared to 2023, strengthening Guatemala’s presence in key markets like the United States, Central America, and South America,” stated Amalia Rodríguez, Coordinator of AGEXPORT’s ITO Commission. She emphasized the importance of international events such as Export Tech and ON Tech Summit in driving this growth. These events facilitated significant commercial agreements and attracted foreign investment, crucial for sustaining the sector’s upward trajectory.

A Catalyst for Economic and Technological Development

The ITO (Information Technology Outsourcing) Commission of AGEXPORT has been instrumental in driving Guatemala’s economic and technological development. With over 80 active members, the Commission is a hub for collaboration, innovation, and growth within the tech sector. In 2024, it reached a significant milestone by solidifying Guatemala’s reputation as a strategic provider of technological services on the international stage.

Key services offered by Guatemalan tech companies include custom software development, cybersecurity solutions, mobile app development, data analysis, big data, and IT consulting. This diverse portfolio not only meets the demands of global markets but also highlights Guatemala’s capability to deliver high-quality, innovative solutions. Guatemalan tech services exports has laid a robust foundation for future challenges and opportunities by focusing on internationalization, innovation, and talent development.

Preparing for 2025: Market Studies and Competitive Evaluations

The ITO Commission conducted extensive market studies and competitive evaluations in 2024 as part of its strategic initiatives. These efforts aim to provide actionable insights to guide marketing strategies for 2025. By understanding global market trends and identifying areas for improvement, Guatemalan tech services exports are better positioned to remain competitive and seize emerging opportunities.

Strategic Alliances and Talent Development

Addressing one of the sector’s primary challenges—bridging the gap between available talent and market needs—the Commission organized the Tech Fair in 2024. This event successfully connected emerging talent with job opportunities and training programs, fostering a stronger tech workforce. Additionally, strategic alliances were forged with educational institutions and private companies to design training programs aligned with the demands of the global market. These collaborations are critical for ensuring Guatemalan professionals have the skills and knowledge necessary to thrive in a highly competitive industry.

Amalia Rodríguez highlighted the importance of these initiatives: “By creating opportunities for professional growth and aligning our training programs with international standards, we are building a workforce that can compete on a global scale.”

Strategic Focus Areas for 2025

With a solid foundation built in 2024, the ITO Commission is setting its sights on three strategic focus areas for 2025:

Boosting and Positioning Guatemala Internationally: The Commission aims to enhance Guatemala’s visibility as a premier provider of technological services. This involves targeted marketing campaigns, participation in high-profile tech events, and building stronger relationships with key industry players.

Specialized Training: Recognizing the importance of a highly skilled workforce, the Commission will continue to invest in specialized training programs. These initiatives will be tailored to meet the evolving needs of the global tech market, ensuring that Guatemalan professionals remain competitive.

High-Impact Events: Building on the success of the Tech Fair, the Commission plans to organize additional events that promote innovation, collaboration, and talent development. These events will serve as platforms for showcasing Guatemalan tech services exports and attracting international attention.

Challenges and Opportunities

Despite its successes, Guatemala’s tech sector faces significant challenges. One of the primary hurdles is the need to overcome technological infrastructure limitations. Ensuring reliable, high-speed internet access and state-of-the-art facilities support the sector’s growth. Additionally, there is a pressing need for specialized training to keep pace with the rapidly evolving demands of the global tech industry.

However, the sector’s outlook remains promising. The ITO Commission projects significant impacts in 2025, including the opening of new markets in cities like Los Angeles, Miami, and Washington and continued exploration of opportunities in Europe and Asia. Sustained export growth and the consolidation of intersectoral strategic alliances are also expected. These developments will boost Guatemala’s economy and cement its status as a technological powerhouse in the region.

Conclusion

Guatemala’s 3% growth in technological service exports in 2024 underscores the sector’s resilience and potential. Through strategic initiatives, international collaboration, and a commitment to talent development, the country is well-positioned to capitalize on emerging opportunities in 2025 and beyond. As Guatemalan tech services exports expand their reach and innovate within the tech industry, Guatemala is poised to become a global leader in technological services.

The 20 Largest Investments in Central America in 2024

The 20 Largest Investments in Central America in 2024

by | Dec 26, 2024 | FDI Latin America

In 2024, major regional corporations announced significant expansion projects across Central America and in markets like the United States. Multinational companies like Nestlé and Bimbo stood out with new project launches for Central America.

The publicly announced investments confirmed by companies amount to over $3.575 billion. However, the figure is likely higher since expansion projects and acquisitions were documented. The largest investment in Central America in 2024 reflects a year of significant corporate moves.

2024 was a dynamic year for investment announcements. According to an analysis by revistaeyn.com, the major announcements were led by Guatemalan companies that strengthened their expansion and investment plans.

The publicly announced investments confirmed by companies total over $3.575 billion, but the number is undoubtedly higher, as additional expansion projects and acquisitions were recorded where transaction amounts were not disclosed. The largest investments in Central America in 2024 have reshaped the economic landscape and positioned the region as a hotspot for corporate growth.

One such case involved the Guatemalan Corporación Multi Inversiones (CMI), which announced on November 1 that it had agreed to acquire a majority stake in Del Real Foods in the United States, a company specializing in producing ethnic foods for that market.

Del Real Foods, based in Jurupa Valley, California, produces refrigerated, hot, and ready-to-eat Hispanic foods. CMI now controls its manufacturing plants in Mira Loma, California, and Moore, Oklahoma, along with an extensive distribution network. This acquisition represents the most significant investment by a Guatemalan company in Central America in 2024 into the U.S. market.

This acquisition is significant as it will diversify CMI’s business and position it within a key Hispanic market. Although details of the agreement remain undisclosed, revistaeyn.com considers it the largest acquisition of the year.

Progreso Expands to the Caribbean

The Guatemalan company Progreso also stood out for entering the Dominican market by purchasing Cemex’s regional operations. This deal underscores one of the largest investments in Central America in 2024, further consolidating regional growth.

In August, the company confirmed an agreement to acquire 100% of Cemex’s operations in the Dominican Republic, including its export business to Haiti. This acquisition positions Progreso as the gateway to the Caribbean market.

The transaction, valued at $950 million, includes a cement plant, two integrated production lines, related cement, concrete, aggregate assets, and maritime terminals. It marks the largest investment in Central America in 2024 for the construction and manufacturing sector.

2024: A Year of Major Business Deals

Overall, 2024’s investment announcements were diverse, spanning retail, banking, hospitality, food, construction, and manufacturing sectors.

The deals documented throughout the year by revistaeyn.com reveal significant corporate activity that promises to consolidate further in 2025. The largest investments in Central America in 2024 indicate strong momentum in local and international business initiatives.

Here are some of the major business moves in Central America in 2024:

CMI

The Guatemalan corporation announced its acquisition of a majority stake in Del Real Foods in the U.S., representing one of the largest investments by a Central American company in the world’s largest consumer market. Additionally, its Pollo Campero brand opened its 100th restaurant in Miami Gardens, Florida, and set an ambitious goal to double its locations within three years.

Walmart Central America

The company announced a $1.3 billion plan for its regional operations over the next five years. This initiative stands out as one of the largest investments in Central America in 2024 in the retail sector.

The retailer aims to strengthen its presence, managing over 900 regional stores. Highlights include the construction of a Perishables Distribution Center in Costa Rica.

Progreso

In August, the Guatemalan group announced it had agreed to acquire 100% of Cemex’s Dominican Republic operations in a $950 million deal, increasing its production capacity by 30%.

Aristos Inmobiliaria

The Salvadoran company announced a $250 million investment to develop AirCity, the first airport free trade zone in El Salvador and the region.

The project will be built on a 532,271 m² site at the San Óscar Arnulfo Romero International Airport. The initial $50 million phase will establish infrastructure to house companies in aeronautics, e-commerce, logistics, and trade.

Futeca Corporation

The Guatemalan company announced Distrito Futeca, a project involving a shopping center and event forum in Guatemala City’s Zones 5 and 10. The $250 million investment will begin in 2025, with the shopping center set to open within three years and the forum in 2029.

AES El Salvador

Through its energy distribution companies (AES CAESS, AES CLESA, AES EEO, and AES DEUSEM), AES El Salvador announced investments of $236 million over the next five years, with $58.3 million allocated for 2024.

The energy company will develop strategic projects to modernize and expand the electricity grid, investing in advanced technologies.

Holcim

In September, the Swiss multinational announced the purchase of Cemex’s operations in Guatemala for $200 million. The deal included a grinding plant near Puerto Quetzal, three ready-mix concrete plants, a maritime terminal, and five land distribution centers.

Bimbo

The world’s largest baking company began constructing a new production plant in El Salvador in April.

The $200 million investment will boost its market presence in Central America. The plant will begin operations in the first half of 2025.

Energuate

The company announced a $71 million investment plan to improve energy distribution quality, network automation, community electrification, and new customer connections.

Grupo Tomza

Through its Tropigas brand, the company invested $65 million in building a Liquefied Petroleum Gas storage facility in Escuintla, Guatemala—the largest of its kind in Latin America.

Grupo Fogel

Japanese company Hoshizaki reportedly paid $28 million in May for a 51% stake in Guatemalan refrigeration equipment manufacturer Grupo Fogel.

SERFINSA

The Salvadoran paytech company announced its expansion into Central America in October, with a $20 million investment plan for the next five years.

The provider of technology and financial processes is entering markets like Nicaragua, Honduras, Panama, Costa Rica, and Guatemala.

Nestlé

The Swiss multinational announced a $5 million investment in a new AI Center in Guatemala to optimize its sales, marketing, and customer service processes. The facility, part of an $85 million five-year investment plan, will be operational by 2025.

Grupo Unicomer

The Salvadoran group reintroduced the RadioShack brand to the U.S. market a year after acquiring its rights. It also opened its 30th Courts store in the Caribbean and launched its fintech EMMA (Easy Mobile Money Access) across several markets.

Anheuser-Busch InBev

The world’s largest beer producer announced plans to establish operations in Panama, open a global procurement office, and initiate a project to replace imported corn starch with local production.

Inversiones CUSCATLAN

This Central American investment group completed two major deals in 2024. The first was acquiring 100% of La Hipotecaria Holding, which operates in Panama. Additionally, it expanded its business in Guatemala by acquiring 100% of Banco Inmobiliario S.A.

Grupo Poma

The Salvadoran business group announced two new hotel projects in Lima, Peru, and plans for additional developments in Panama and El Salvador, including a JW Marriott set to begin construction in 2025.

SISA Seguros

SISA Seguros, majority-owned by Inversiones CUSCATLAN Centroamérica, obtained regulatory approval to acquire up to 90% of Guatemala’s Aseguradora Confío S.A.

San Martín

In August, the bakery chain opened its second store in Dallas, Texas, marking its 73rd location. The chain employs over 4,000 staff members and offers various freshly baked products.

Purdy Motors

The Costa Rican group initiated its transformation into a multinational company as part of its 2030 objectives, driven partly by Toyota Tsusho Corporation acquiring a 25% stake in the company.

Conclusion

The largest investments in Central America in 2024 showcased dynamic growth across diverse sectors, including retail, energy, food production, and construction. Guatemalan companies led the way, with Corporación Multi Inversiones (CMI) acquiring a majority stake in U.S.-based Del Real Foods and Progreso entering the Caribbean market through a $950 million acquisition of Cemex’s Dominican operations. Major players like Walmart Central America, Bimbo, and AES El Salvador announced significant expansion plans. At the same time, Salvadoran firms like Aristos Inmobiliaria and Grupo Poma revealed transformative projects in free trade zones and hospitality. These and other ventures, totaling over $3.575 billion in disclosed investments, highlight a pivotal year for economic development in the region.

Service Companies in Uruguay Generate Over 59% of Registered Employment

Service Companies in Uruguay Generate Over 59% of Registered Employment

by | Dec 26, 2024 | FDI Latin America

Uruguay’s National Institute of Statistics (INE) report highlights how the service sector firmly establishes itself as a cornerstone of economic development. According to the INE’s demographic report, service companies in Uruguay generate 59.23% of registered employment nationwide, showcasing the sector’s consolidation within the labor market.

A Regional Comparison of the Service Sector

The study also revealed that service companies represent 53.96% of all businesses in Uruguay. This aligns with trends in other countries, such as Colombia, where the service sector accounts for 62.7% of companies, Peru at 54.8%, and Ecuador at 51.6%. This data illustrates the pivotal role of services in driving economic activity throughout Latin America.

Information and communication activities are one of the most dynamic subsectors within Uruguay’s services industry. Between 2018 and 2023, the number of companies operating in this area increased by a remarkable 79.77%. This growth underscores the increasing demand for digital services and technological solutions, positioning Uruguay as a competitive player in the digital economy.

The Role of Montevideo and Canelones

The geographical distribution of service companies and their employment impact paints a clear picture of regional economic hubs in Uruguay. Montevideo, the nation’s capital, continues to dominate, with 53.80% of service companies and 65.28% of employment in the sector. This concentration reflects the city’s role as the country’s economic, political, and cultural epicenter.

Canelones, located adjacent to Montevideo, is the second most significant department, hosting 11.62% of service businesses and accounting for 8.36% of employment in the sector. These figures highlight the importance of both regions in fostering the growth of service companies in Uruguay, which continue to attract investment and talent due to their infrastructure, connectivity, and access to a skilled workforce.

The Prominence of Small and Medium Enterprises

Small and medium-sized enterprises (SMEs) are outsized in Uruguay’s service sector. In 2023, micro, small, and medium businesses represented an overwhelming 99.49% of all service companies. In contrast, large enterprises constituted just 0.51%. This trend reflects the broader structure of the Uruguayan economy, which relies heavily on SMEs for employment generation and innovation.

SMEs are instrumental in promoting economic inclusivity by offering opportunities to diverse groups nationwide, especially in rural areas where large-scale enterprises are less prevalent. Their agility and adaptability enable them to cater to niche markets, further strengthening their role in economic development.

Gender Participation in the Sector

The analysis also highlighted notable progress in gender inclusion within the service industry. Women’s participation has increased significantly, with the gender gap narrowing from 0.99% in 2018 to 3.53% in 2023. This shift reflects Uruguay’s broader efforts to promote gender equality and empower women in the workforce.

Policies encouraging diversity and inclusion and the inherent flexibility of service jobs have contributed to this positive trend. The rising number of women-led businesses demonstrates the sector’s potential to drive social progress alongside economic growth.

Exporting Services: A Historic Milestone

Uruguay’s service exports have reached historic levels, totaling $6.88 billion in the last year. This remarkable achievement underlines the sector’s significance as the primary engine of the country’s economic growth. Services now constitute a substantial share of Uruguay’s overall exports, reflecting the global demand for logistics, technology, and financial services expertise.

Large Companies and Their Strategic Role

While SMEs dominate in number, large companies in the service sector play an equally crucial role due to their capacity for scale, investment in advanced technologies, and ability to manage complex operations. These enterprises are vital to Uruguay’s economy as they drive innovation, enhance productivity, and generate high-quality jobs.

The INE report emphasized the essential contributions of sub-sectors such as logistics, finance, and information technology. These industries are indispensable to modern economies, ensuring efficient goods, capital, and data flow. Additionally, healthcare, business services, and recreational activities have emerged as some of the fastest-growing sectors globally, and Uruguay is no exception.

A Look Ahead

Uruguay’s service sector is a pillar of the national economy and a gateway to its integration into global markets. The rapid adoption of technology, focus on sustainability, and promotion of inclusivity are expected to further solidify Uruguay’s reputation as a regional service leader. The continued growth of the sector, supported by strategic policies and investments, will likely provide the foundation for sustained economic prosperity.

Conclusion

Service companies in Uruguay play a pivotal role in the country’s economy, generating 59.23% of registered employment and constituting 53.96% of all businesses nationwide. This aligns with broader Latin American trends, where services are critical to economic activity. Montevideo, the nation’s capital, leads as the primary hub for the sector, housing 53.80% of service companies and contributing to 65.28% of sector employment, followed by Canelones. The sector’s remarkable growth, especially in information and communication activities, positions Uruguay as a competitive player in the digital economy. Small and medium-sized enterprises (SMEs) dominate the landscape, accounting for 99.49% of service companies in Uruguay, driving employment, inclusivity, and innovation. Gender participation in the industry has also improved significantly, reflecting national efforts toward equality. Service exports reached a historic $6.88 billion, underscoring the sector’s role as a primary economic engine. Sub-sectors like logistics, finance, and IT continue to thrive, complemented by healthcare and recreational services. Large companies contribute through innovation and job creation, while SMEs provide adaptability and inclusivity. With a strong emphasis on sustainability, technology adoption, and strategic investments, the service sector is set to maintain its role as a cornerstone of Uruguay’s economic growth and global integration.