, Foreign Direct Investment

Foreign Direct Investment

Interest is increasing from Latin America. Global Multinationals are replaced by multilatinas.

Governments in the Central American region have created mechanisms to attract foreign direct investment (FDI).

The leader in the field today is Panama. The sectors that receives more foreign investment are trade followed by financial and insurance activities. Then transportation areas, storage, mail, information and communications, electricity, gas and water and manufacturing industries. Investment is expected to be strengthened with the expansion of the Panama Canal and helps the country as a logistics center serving the regional and South American markets.

In Costa Rica, it is sought that the FDI generates employment and improves the quality of work, thus boosting productivity and adding greater national value to the final product or services. Services continue as the main investment area, followed by manufacturing, agriculture, financial systems, commerce, real estate and tourism. It is estimated that in the year will see the same levels of investment and generation of places.

In the CEPAL´s report on “Foreign Direct Investment in Latin America and the Caribbean 2016” it is pointed out that tourism and real estate development accounted for 49% of total FDI in the Dominican Republic. Among the most outstanding investment is the US cruise operator Carnival Corporation, which established a new terminal in Puerto Plata. The German group Lopesan acquired 20 hectares in the tourist resort of Bavaro-Hihüey (La Altagracia) to build a hotel with more than 1,000 rooms. In the energy sector, AES Corporation is responsible for 40% of electricity generation in the country and has a portfolio of projects in which one of the main works is the expansion of Andrés terminal to export liquefied natural gas and the construction of a gas pipeline.

In Honduras, sectors of major interest to foreign investors were services, transportation, Storage, telecommunications, goods for processing and trade. At the end of the first quarter of 2016, reinvestment of profits of companies already established in the country continues to be the largest source of FDI, according to the Central Bank of Honduras. At present, the Government and private enterprise are concentrated in an investment plan denominated Honduras 20/20 which intends 600 thousand jobs in 4 years. The priority sectors are maquila textiles, intermediate manufacturing, tourism and business services.

The Central Bank in Guatemala indicates that commerce, manufactures, energy and gas, mining and telecomms have been active sectors for FDI estimating an economic growth of 8,5% en IED by the end of 2016.

Telecommunications was the focus of attention for foreign entrepreneurs, especially the investments made by Movistar and América Móvil in Nicaragua. Behind this sector is energy, mines, the industrial sector, commerce and services. In the financial sector, the Honduran group acquires the assets of Citibank in Nicaragua. Similarly, PriceSmart, Wal-Mart and Cargill expanded their operations. In the production area stands out, a Japanese group that produces harnesses and auto parts that operates under the free zone regime that will generate 3,300 jobs.

The manufacturing industry was projected with the inauguration of a new processing plant.

It is expected that the Nicaraguan government a will advance with South Korea and Canada to achieve investments. The agency Pro Nicaragua intends for this year an investment for new companies interested in settling in the country.

The resources were directed to small-scale projects and to projects that require some years of maturation in El Salvador. In recent years mining has attracted the interest of foreign businessmen, especially in the metal segment, but a strong opposition has arisen as a result of environmental concerns. The largest purchase in 2015 was the CYBSA Group, a packaging company, by the Irish company for its expansion.

Thanks to incentive to foreign investment, the countries of the region become attractive places for investment of large companies from around the world. CENTRAL LAW is the only regional full-service law firm in Central America, Panama and the Dominican Republic which offers advice in the area of Foreign Investment to clients interested in expanding their operations in the region. For more information contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.