The Global FDI Annual Report 2022, produced by GlobalData and Investment Monitor, shows the number of greenfield foreign direct investment (FDI) projects into Latin America grew by 6.8% in 2021, totalling 1,283. Yet this is still well below the number of FDI projects recorded in the region in 2019, before the Covid-19 pandemic.

Brazil and Mexico are the lead FDI destinations in Latin America

Brazil and Mexico were the leading FDI destinations in Latin America in 2021, receiving 310 and 309 projects, respectively. Brazil, which also ranked first for Latin American FDI in 2020, saw project numbers increase by just one, while Mexico witnessed growth of 14%, closing the gap between the two countries.

Communications and media was the top sector for Brazil’s inbound FDI, accounting for one quarter (25.8%) of all projects. Software and IT services ranked second with 39 projects. Renewable energy, which was the top ranked sector for inward FDI in Brazil in 2020 having attracted 55 projects, only ranked third in 2021 after a decline in project numbers of 40%.

Sao Paulo, the most populous city in Brazil, ranked first for inward investment attracting 63 projects, almost one quarter (24.9%) of the country’s total FDI. Rio de Janeiro followed with 13 projects while Conceição dos Ouros, a municipality in the state of Minas Gerais, ranked third with seven projects.

Brazil saw largest capital investment and job creation projects

Equinor, a Norway-based state-owned multinational energy company made the largest capital investment in Brazil and Latin America in 2021. The company announced plans to develop the Bacalhau oilfield off the coast of Sao Paulo, Brazil in partnership with US-based Exxon Mobil. Equinor will invest $8bn in phase one, which will see 19 subsea wells tied back to a floating production, storage, and offloading unit (FPSO).

Bravo Motor Company, the US-based transportation and clean energy company, was the largest investor in Brazil, and Latin America regionally, in terms of job creation. The company announced plans to invest $4.7bn to expand its plant in Nova Lima which produces electric vehicles as well as batteries and components. The expansion is forecast to generate more than 10,000 direct jobs.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Mexico is the leading country for automotive FDI

FDI project numbers in Mexico increased 14% in 2021, from 271 to 309. At city level, Mexico City attracted the lion’s share of inward investment with a 26% market share, followed by Monterrey with 7%, and Guadalajara with 6%.

Automotive was the leading sector in 2021 accounting for 16% of the country’s inbound FDI. Mexico was by far the leading destination for automotive FDI, winning almost two-thirds (59%) of Latin America’s projects. Software and IT services and electronics were the second and third ranked sectors in Mexico, with a combined market share of 22%.

Netherlands-based Tarafert was largest investing company into Mexico in terms of capital expenditure, announcing plans to invest $2.7bn in a new solar 2,500MW PV park in Durango. The solar project is planned for over 2,500 hectares and is expected to be operational by the year 2026. Taiwan-based electronics component manufacturer Wistron and Sweden-based automotive specialist Autoliv were the top investors for job creation, each announcing plans to hire 3,000 staff for manufacturing operations.

US and Western Europe are leading source markets

The US and western Europe were the dominant source markets for FDI into the Latin America in 2021. The US maintained its leading position as the largest global outbound FDI investor with a 34.5% market share, followed by the UK with 7.1%, and Germany with 6%.

Asia-Pacific was the source of 11.5% of FDI projects into Latin America in 2021, with most investment sourced from China (43 projects), Japan (39) and India (20). Outbound FDI from China into the region grew faster than that of any other country, led by investments in the electronics and automotive sectors.

A small proportion (12.4%) of FDI into Latin America came from other world regions. Of these regions, South America and Central America and the Caribbean were the largest source markets, creating 76 and 48 projects respectively. Mexico and Argentina were the primary source countries with a combined market share of 4.1%, followed by Brazil with 1.4%. Peru experienced a stark 150% rise in outbound FDI projects from into Latin American mainly due to logistics investments led by Chazki.

Software and IT services ranked top FDI sector

Software and IT services was the largest sector for FDI in Latin America in 2021, generating 175 investments. Business and professional services ranked second with 160 projects, followed closely by communication and media with 141. Brazil, Mexico, and Costa Rica were chief destinations for software and IT services FDI with a combined market share of 63%.

The tourism sector has taken the hardest hit in Latin America due to Covid-19 pandemic. It previously shared a leading position with the software and IT sector in 2020 but slipped to fifth position in 2021 with a 48.6% drop in inbound FDI. Mexico retained its top position among leading countries for inbound FDI in tourism with 27 projects, followed by Brazil with eight projects, and Peru with six.

Latin America witnessed a significant triple digit growth in inbound FDI in sectors such as glass and ceramics, space and defence, and healthcare, although theses sectors receive a relatively smaller proportion of global FDI. Brazil was the chief destination country for glass and ceramics and space and defence FDI, while Colombia and Puerto Rico shared the lead position in healthcare FDI.

US is the leading destination country for outbound Latin America FDI

Latin America recorded 282 outbound FDI projects in 2021, a decline of 2.7% when compared with 2020. Mexico was the leading outbound country for FDI in Latin America in 2021 with a 23% market share, a slight decrease of 4.4% compared to 2020. Brazil followed closely with a 21.3% market share despite a 23% drop in outbound investment. Argentina ranked third with 36 projects, with a 12.7% market share and a drop of 18.2%.

The US was by far the leading destination country for FDI from Latin America, attracting 17% of its total outbound investment. Florida and New York were the top recipient US states for Latin America FDI, winning nine and six investments, respectively. Dominican Republic and Colombia placed joint second attracting 17 outbound FDI projects each, followed by Mexico with 16 projects.

Click to download the full Global FDI Annual Report 2022.

(State- and city-level analysis is based when such information is provided. Country-level only data has been excluded from such analysis)