FDI outflows from Latin America grew by 75% in 2022, reaching a record high of ~73 billion USD. Spain consolidates its position as a gateway to Europe, with an increase in the number of greenfield projects in 2022, mainly from SMEs and startups in the region.

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The dynamism of Latin American investment around the world was confirmed in 2022, reaching record levels and 75% higher than the previous year. The region now has eleven of the 100 largest non-financial companies in developing countries with the most significant foreign presence.

Spain is among the leading destinations for investment from Latin America, according to the Global LATAM 2022 report published by ICEX-Invest in Spain in collaboration with the Ibero-American General Secretariat (SEGIB). The publication estimates that accumulated Latin American investment in Spain now amounts to more than 68 billion euros, which represents 11% of all foreign investment received by the country.

In 2022, a total of 39 investment projects were announced in Spain, compared to 24 in 2021. Latin American capital does therefore seem to have a clear commitment to the market, consolidating the country’s position as a gateway to the European market. In comparison with Spain, nine investment projects were announced last year by Latin American companies in Germany, three in France and one in Italy.

In 2022, Latin American investment in Spain was 1.101 billion euros, 32.9% less than the previous year. This is explained by one-off corporate restructuring operations recorded in the previous year. Nonetheless, the substantial increase in the number of greenfield investment projects originating from the arrival in Spain of Latin American SMEs and startups  is a clear sign of this dynamism.

This is some of the data contained in the Global LATAM 2022 report, now in its fifth edition, and which was presented at an event inaugurated by the executive director of ICEX-Invest in Spain Elisa García Grande, and Ibero-American secretary general Andrés Allamand.

In her speech, Elisa García Grande stressed that "this report is unique in that it analyses a reality that goes unnoticed in analyses of the Latin American economy and the health of its business fabric", and that furthermore "is a little-known phenomenon in relations between Spain and Latin America". She stressed that "at Invest in Spain, we always highlight Spain's role as a gateway for Latin American investment", and explained how the organisation "has programmes and activities to channel this interest, and to bring Latin American investors closer to the opportunities in Spain".

Meanwhile, Ibero-American Secretary General Andrés Allamand stressed that, "In this fifth edition, the Global LATAM report reveals two very interesting facts: firstly, that 2022 was a record year for Latin American investment worldwide, reaching a figure of over 73 billion USD, the highest figure to date. And secondly, that Spain continues to be one of the most attractive destinations for the internationalisation processes of Latin American companies, particularly for medium-sized companies and startups". At SEGIB we hope that this study will help to identify new investment opportunities that will benefit the whole of Latin America", he said.

Global investment of 73.449 billion USD in 2022
In 2022, Latin America’s outward FDI increased at a very high rate, over 75% for the year as a whole, reaching 73.449 billion USD, the highest figure on record. This highly dynamic foreign investment performance is primarily explained by the reinvestment of dividends. This adds to the strong recovery already experienced in 2021.

Brazil, Mexico and Chile have accounted for nearly 80% of outward FDI (foreign direct investment) since the pandemic, a percentage that remained unchanged in 2022. Brazil, the region's leading foreign investor, invested 90% more in 2022 than in the previous year, 30.694 billion USD (40% of the total) and Mexico returned to its traditional cross-border investment rhythm, multiplying the flow of investment by 50, and taking it to 16.878 billion USD (25% of the total). In contrast, Chile was the only country among the largest in the region to reduce the pace of investment in 2022.

The sector with the most projects in 2022 was software and information technology services, with a total of 108, almost double the number of those for financial services (57), which ranked second. However, these investments tend to be significantly smaller than those aimed at traditional sectors: 10 million on average compared to an average of 26 million in financial services.

The report stresses that regional integration through direct investment flows is much more advanced than  intraregional trade. In 2018-2021, intraregional FDI accounted for 65.5% of the region’s total outward FDI, with a clear upward trend compared to previous years. This is significantly higher than the level of intraregional trade, which was below 15% in the same period.

In recent years, it has become clear that Latin America has an important role to play in the green transition and the decarbonisation of the economy. Green bonds are proving to be of great importance in taking advantage of this opportunity. From 2015 to the end of 2022, green bonds issued in Latin America amounted to 41.228 billion USD, with a total of 291 bonds from 186 different issuers. Chile and Brazil were the countries issuing the largest volume, while non-financial companies stood out in terms of the type of issuer, followed by sovereign issuers.

The full Global LATAM 2022 report is available here.

_{^{Caption for the group photo (from left to right):
Adrián Blanco, LATAM Desk, ICEX-Invest in Spain
María Lahore, chief executive, CAF-Development Bank of Latin America
Fazia Pusterla, representative in Europe, Inter-American Development Bank (BID)
Andrés Allamand, SEGIB Secretary General
Elisa García Grande, executive director of ICEX-Invest in Spain
Manuel Balmaseda, director, Spanish Institute of Banking and Finance
Germán Ríos, professor, IE University
Alberto Sanz, director of financing and investor relations, ICEX-Invest in Spain}}