Why Businesses are Choosing to Operate in South America

One hears much in the media these days about corporations pulling up roots and moving to other countries. But in addition to giving rather limited explanations for these companies’ rationales in doing so, the media gives the impression that they’re only moving to a couple of countries overseas.

In 2012 the U.S. Department of Commerce began a major campaign to promote and expand trade between the United States and a number of South American nations called Look South. The initiative helps American countries understand the benefits of international trade and expansion and business opportunities with these countries. In addition to participating in the Look South program, in 2012 Colombia also signed a trade agreement with the United States that makes this country a very attractive business partner for American corporations. Why?

Over the last decade, Colombia’s GDP has shifted from 2.4% to 4.8%, making it one of the most prospering economies (ranked fourth) in the developing world. And with a population currently just under fifty million, the nation provides an attractive market base of consumers.

While the country has struggled in the past with political instability, a vastly improved climate within the country’s government has led to successful negotiations with insurgent groups. Among the results are sharp drops in violence and drug trade. The country’s homicide rate has dropped in half since its height in 1996, and major urban centers such as Bogota have shown marked improvement as a result.

Trade Gateway
Bordering both the Atlantic and Pacific oceans, Colombia is especially poised to offer American companies opportunities for tariff free trading and exporting with companies such as China and other members of the Pacific Alliance within South America. And Columbia’s improved economy and political climate offer exciting new investment opportunities within the country itself, in areas such as mining, engineering, infrastructure, and tourism.

One country taking advantage of Colombia’s business opportunities is Mannatech (http://mannatechscience.org/), one of the world’s best known manufacturers of nutritional supplements and other health care products. Mannatech opened a Colombia branch in 2016, spearheading their Latin America drive to bring their products to that part of the world. Company executives have indicated that they think everything from the country’s population to its trade practices are a good match for them. Other American companies wishing to expand south of the border would do well to take heed.

In reality, just as there are a number of reasons for international moves, there are many countries who would happily welcome these relocating firms. And a number of them are located in South America. Brazil has gotten a lot of interest over the past decade as a country with both impressive national business growth and as one that’s a welcoming location for international corporations to put down roots.

Other South American nations have made impressive gains in business over the last decade, such as Chile, Peru, and Columbia. This is attributed to a number of factors, such as reinvestment in major cities here, and important investor initiatives like the Pacific Alliance and the Integrated Latin Market.