Nearshore Americas
Latin America investment

Competition to Attract FDI Gets Fierce in Latin America, As COVID-19 Destroys Jobs

The competition to attract foreign investment (FDI) is getting even more fierce in Latin America, with the rising unemployment rates putting pressure on the governments to create jobs and stimulate the economy.

Panama and Colombia are reportedly mulling providing financial aids to companies hit hard by the COVID-19 pandemic.

Panama’s parliament has already approved a legislative bill seeking to grant tax benefits to companies in the manufacturing sector. Reports say that Uruguay is also considering plans to reduce income tax on businesses in a bid to attract foreign investment.

Meanwhile, Costa Rican investment promotion agency, CINDE, has reportedly told its government not to remove any tax incentives offered to foreign firms in free zones.

“CINDE is insisting that the tax-breaks offered to multinational firms operating in free zones must be protected,” reports Spanish news outlet crhoy.com. The tax exemption has long been a major draw for foreign firms building up offices in the country’s free zones.

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Globally, foreign direct investment (FDI) is on course to decrease between 30% and 40% this year, according to the United Nations. In Costa Rica, FDI fell by 22% in the first quarter of the current fiscal year, according to the country’s central bank.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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