Why Latin America for International Expansion?

Many US-based companies are looking to expand internationally to find new customers and increase revenue. One place businesses have been looking in recent years is Latin America. For US-based companies, you may ask why Latin America over other avenues? Here we discuss why LATAM may just be the smartest solution and how Kompass can help your business expand internationally.

Many US-based companies are looking to expand internationally to find new customers and increase revenue. One place businesses have been looking in recent years is Latin America. For US-based companies, you may ask why Latin America over other avenues? Here we discuss why LATAM may just be the smartest solution and how Kompass can help your business expand internationally.

Why Latin America?

Latin America, also known as LATAM, refers to the portion of the Americas where Latin-based languages are predominantly spoken—such as Spanish, French, and Portuguese. This includes 20 countries and 14 territories spanning from Mexico to the southernmost tip of South America and much of the Caribbean. Many US companies have begun “near-shoring” to Latin America due to the large potential for growth among other benefits. Here we breakdown a few reasons why LATAM should be on your radar for expansion:

  1. Proximity- The geographic proximity of Latin America and the United States makes it a popular avenue for expansion. Transportation is easy with great links to and from the United States and practical flight times. Plus, the similar time zones make working internationally easier than anywhere else.
  2. Untapped Markets- Growth opporunities are great in LATAM. Many countries throughout South America, Central America and the Caribbean offer little or no Western brand competition. As the economies grow in emerging countries, gaps emerge for companies to step in and fill new needs and services. Additionally, with the amount of different regions in Latin America companies can choose those specifically matched to their business sectors.
  3. Incentives- The political and economic stability has greatly increased in some countries in Latin American. Chile, Mexico, Colombia, and Peru generate almost 40% of the GDP in Latin America. Other countries like Uruguay, Costa Rica, Panama, and Argentina rank high in the Global Peace Index which  shows reliability for future profits and stability for business ventures. With that, many countries are looking to attract foreign business by offering incentives like, grants, taxes-breaks, and less travel barriers. Additional incentives are available for several sectors, including automobile and electronics manufacturing sectors.
  4. Free Trade Agreements- The United States has FTAs with Chile, Colombia and Peru which eliminate import tariffs for certain goods and aim to reduce non-tariff barriers for U.S. products in these countries. Brazil and the U.S. also have an agreement to enhance trade and investment between the two countries. Additionally, the U.S. government supports many projects in Latin American markets and provides a wealth of resources to assist in pursuing projects in LATAM.
  5. Great Potential- Latin America boasts favorable production costs and a large skilled worker pool. With many countries building back from the effects of the pandemic, the growth may have slowed but there are still significant opportunities to expand your business in LATAM.

Looking to expand to Latin America? Check out our stats below for some of the largest and fastest-growing economies in Latin America.

Kompass Data in Argentina: 14,188 companies

Argentina

Kompass Data in Brazil: 851,370 companies

Brazil

Kompass Data in Colombia: 28, 730 companies

Colombia

Kompass Data in Peru: 50,426 companies

Peru

 

Looking to expand to Latin America or elsewhere?

Kompass can help you create new business relationships with over 59 million companies globally and grow your business.

Contact us today!

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