Latin America must convert investor interest into long-term projects, says Vistra

Latin America remains an attractive destination for foreign direct investment (FDI), but investors are becoming increasingly selective as they weigh geopolitical uncertainty, regulatory complexity and execution risk, according to global business services provider Vistra.

The comments come after the release of UN Trade and Development’s (UNCTAD) World Investment Report 2026, which found that FDI inflows into Latin America and the Caribbean rose 14% to US$188 billion in 2025, even as the value of announced greenfield investment projects fell by around one-third. The figures point to a divergence between headline investment flows and the pipeline of new productive investment across the region.

Brazil accounted for much of the increase in inflows, while Mexico re-entered the world’s top 10 FDI destinations, underlining the continued importance of nearshoring and supply chain diversification. However, the sharp decline in greenfield projects suggests companies are taking a more cautious approach to committing capital to new operations. Manufacturing and logistics were among the sectors to see fewer announced projects.

Raimundo Diaz, executive vice president, Americas, at Vistra, said the latest figures paint a picture of a region that continues to attract international capital, but where investment decisions are becoming more targeted.

“Latin America’s FDI picture is encouraging, but it is also becoming more selective,” he said. “The rise in capital inflows shows the region remains attractive, and Mexico’s return to the global top 10 underlines the strength of nearshoring and supply-chain diversification.”

He added that the decline in announced greenfield projects indicates that investors are becoming more discerning about where and how they deploy capital.

“Capital is available, but it is moving toward markets and sectors where there is greater clarity, stability and execution capacity.”

For multinational companies, Diaz argued, the region’s long-term fundamentals remain compelling, particularly in manufacturing, infrastructure, technology, energy transition and digital infrastructure. However, he cautioned that Latin America cannot be approached as a single investment market.

“Companies need to navigate different tax regimes, labour rules, entity structures, currency considerations, regulatory requirements and political cycles across each jurisdiction,” he said. “That complexity can slow investment decisions unless businesses have the right local insight and governance from the outset.”

UNCTAD similarly noted that while investment into the region remains resilient, policymakers should focus on converting investor interest into productive projects through stronger investment facilitation, improved infrastructure and more predictable business environments. The report argues that attracting capital is only part of the challenge; ensuring it translates into new productive capacity, jobs and technology transfer will be increasingly important.

Diaz said reducing operational complexity will be key if countries are to capture the next wave of investment.

“We continue to see strong appetite from companies looking at Latin America, particularly in manufacturing, infrastructure, technology, energy transition and digital infrastructure,” he said. “The opportunity for the region now is to turn investor interest into long-term projects by reducing complexity, improving regulatory predictability and making it easier for companies to enter, operate and scale.”

The findings echo a broader theme running through this year’s World Investment Report: while global FDI rebounded in 2025, investment is becoming increasingly concentrated in a smaller number of countries, sectors and projects, placing a premium on locations that can offer investors certainty, efficient execution and a supportive policy environment.