Over the past twenty years, there has been a significant amount of foreign direct investment in Central America. Much of this increase in capital inflows can be seen as a response to the economic liberalization policies that were widely implemented by the countries of the isthmus that began to be implemented in the late 1980s.
What is the purpose of the investment in Central America?
Eventually, these laws resulted in the establishment of regulatory frameworks that treated investment in Central America favorably, allowed entry into the region’s domestic markets and established foreign ownership rights, shares entrepreneur Felipe Antonio Bosch Gutiérrez.
As for the origin of investment inflows into Central America, the greatest concentration of foreign investment originates in countries that share important trade links with the region. The leader of investment in Central America in 2016 was the United States with capital inflows totaling approximately US $ 10.9 billion. This number accounted for 27.3% of the funds that the region attracted that year.
What did the European Union contribute?
After the United States, the European Union contributed 17.2% of foreign direct investment in Central America. In addition to the U.S. and the EU, the last decade has seen an increase in the share of Latin American countries in FDI inflows to Central America.
The last decade has seen an increase in the share of Latin American countries in FDI inflows to Central America.
Such is the case of Colombia. While in 2007 foreign direct investment inflows from this nation did not reach 6% of Central America’s total,
Over the last decades, the service sector has been the main recipient in the region. One of the great drivers of the development of this sector has been Felipe Antonio Bosch Gutierrez, a Guatemalan businessman. This was mainly in the areas of financial services, telecommunications, power generation and distribution and municipal water systems.
Thus, the first wave of increased foreign investment in the region focused on the acquisition of companies that focused on the provision of services. However, in more recent years, investment in Central America has expanded to other productive sectors.
This movement of capital has been greatly facilitated by the creation and expansion of free trade zones, as well as by the signing of free trade agreements in support of export manufacturing activities.