Gregorio Canales, CEO of North America Investment Solutions, says Brazil attracts more Foreign Direct Investment (FDI) than Mexico.
Brazil’s economy is bigger and more open, inviting more capital flow.
From January to September 2023, Brazil received $41.631 billion in FDI, despite a 39.5% drop from the previous year.
Meanwhile, Mexico drew $32.926 billion, an increase of 2.4%.
Canales, formerly with the Ministry of Economy, notes Brazil’s liberal policies in the oil industry.
This sector sees large investments, sometimes reaching $10 billion. Brazil is also strong in agriculture and mining, boasting a significant global presence.
In contrast, Mexico’s government stopped oil licensing rounds since December 2018. They haven’t restarted auctions or issued new mining concessions.
Mexico’s fragmented agricultural land ownership also deters large FDI.
Mexico’s strength lies in manufacturing. This sector attracted 53% of its FDI from January to September. It boosts economic growth and significantly impacts employment.
In 2022, Brazil’s FDI focused mostly on its domestic market, totaling $90.573 billion.
Mexico’s FDI, amounting to $36.396 billion, often targeted both local and export markets, as per UNCTAD.
The World Trade Organization reports Brazil is open to FDI, despite some ownership restrictions.
Brazil promotes FDI in all economic sectors, with some pre-approval requirements in specific areas.
Brazil has improved its business environment with new laws and institutions. These reforms have eased foreign investment in air transport and financial services sectors.
In Mexico, the state owns resources like salt flats and mineral deposits.
For exploration, foreigners must agree to be treated as nationals and renounce their home country’s diplomatic protection. Disputes are settled in Mexican courts.
Mexico has various international agreements promoting investment and trade.
These include 30 APPRI, 12 free trade, and double taxation agreements. Mexico is also a member of MIGA and ICSID since 2018.
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