Europe is the most important source region for foreign direct investment in Brazil – Central Bank
RIO DE JANEIRO, BRAZIL – The Netherlands, USA, Luxembourg, and Spain are the leading foreign direct investors in Brazil, with the largest share in the US$756.4 billion that foreigners had accumulated in productive projects in the country until 2020, official sources informed this Wednesday.
According to the Direct Investment Report released today by the Central Bank, the Netherlands topped the list of foreign direct investors in Brazil with an accumulated investment of US$210.022 billion up to December last year.
Next come the USA, with US$113.190 billion; Luxembourg (US$67.471 billion), Spain (US$61.891 billion), France (US$33.990 billion), Switzerland (US$32.974 billion), and the United Kingdom (US$26.887 billion).
The Direct Investment Report, an x-ray on foreign resources invested in productive projects in Brazil, showed that accumulated foreign capital fell from US$874 billion in 2019 to US$765.4 billion in 2020 due to the economic crisis generated by the covid pandemic.
Despite that reduction, investment up to December 2020 exceeds that recorded up to 2018 (US$737.9 billion).
Of the total of that direct investment in Brazil until last year, US$521.3 billion corresponded to the participation of foreigners in the capital of companies installed in the country and US$244.1 billion to intercompany operations.
According to the report, Europe is the main region of origin of foreign direct investment in Brazil, with an accumulated US$507.3 billion, equivalent to 66.3% of the total.
Next comes North America, with US$144.4 billion (18.9%); the Caribbean (US$47 million or 6.2%), and Asia (US$44 million or 5.7%).
Among Europeans, the list is headed by the Netherlands, with a 41.4% share of European foreign direct investment in Brazil, Luxembourg (13.3%), Spain (12.2%), France (6.7%), Switzerland (6.5%), and the United Kingdom (5.3%).
The United States holds the largest share among North Americans, with 78.8% of the total, followed by Canada (12.6%).
However, the Central Bank clarified that the list of the largest foreign investors in Brazil changes when the true origin of the capital is analyzed since many companies use headquarters in other countries or tax havens to send their resources to the Latin American giant.
When only the criterion of the final controller of the capital is taken into account, the list of the largest foreign investors in Brazil is headed by the United States, with US$123.9 billion of accumulated investment up to December 2020.
It is followed by Spain (US58.2 billion), France (US$32.3 billion), Belgium (US$26.7 billion), the United Kingdom (US$25.2 billion), China (US$22.6 billion), and the Netherlands (US$19.2 billion).
The report also showed that direct investment from almost all countries fell between 2019 and 2020.
The United States was the largest foreign investor in Brazil in 2020 with US$7.5 billion, lower than the US$10.3 billion invested in 2019.
The Netherlands’ investment in Brazil fell from US$6.2 billion in 2019 to US$5.4 billion in 2020, France’s from US$2.9 billion to US$2.2 billion, and Spain’s from US$2.9 billion to US$2 billion.
By sectors, the report showed that the companies whose capital has the highest share of foreign direct investment in Brazil are those in the financial services sector, with US$ 93.8 billion accumulated until 2020, equivalent to 18.0% of the total.
This is followed by companies in the electricity sector (7.1%), oil companies (6.4%), commercial companies (5.8%), beverage companies (5.7%), telecommunications (4.1%), metallurgy (3.8%), and food companies (3.7%).
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