The EIU is an independent business unit within The Economist Group. Photo: CompositionLR/Gestion/Vecteezy
The Economist Intelligence Unit’s (EIU) recent rankings highlight the attractiveness of several Latin American countries for investment. Despite the political challenges they face, some of these countries stand out for their macroeconomic stability and favorable climate for business.
The EIU ranking evaluates 82 countries based on 91 indicators, considering factors such as political stability, tax systems and market opportunities. While some countries are leaders in this field, others, such as Argentina and Dominican Republicpresent significant progress in their investment environment.
According to the EIU, what is the best country in Latin America for companies to invest in?
Chile remains a favorite destination for investment companies in Latin America. Despite falling eight places in the global ranking from 22nd to 30th, it is still the regional leader. The EIU highlights that macroeconomic stability, institutional strength and a strong financial system are key factors that attract investors.
Chile stands out in Latin America for its economic stability. Photo: Forbes/PNGWing
However, recent policies of the government Gabriel Boric has created uncertainty among investors. The obligation to partner with the state in the lithium sector and new labor laws such as raising the minimum wage and reducing working hours have been seen as restrictive to business. “These measures discourage investment,” comments Nicolás Saldías, the EIU’s senior economist for Latin America.
Chile also faces challenges in terms of security due to an increase in crime rates and the presence of organized crime groups. Despite these problems, the country was rated well in categories such as taxes, competitiveness, financial market development and infrastructure. Central bank independence and low corruption remain important strengths.
Which other Latin American countries follow Chile in the study conducted by the EIU?
Argentina According to the EIU, it is the second country with the largest investment potential in Latin America. The coming to power of Javier Miley as president has brought positive expectations for the business environment. Miley plans to end interventionist policies, liberalise trade and remove currency controls with a special focus on mining and the energy sector.
The Argentine government is also eliminating price controls, which could significantly improve the business environment. However, the implementation of these reforms faces obstacles in Congress and opposition from unions. “There is still a lot to improve,” says Saldías.
Javier Miley was elected President of Argentina in 2023. Photo: El Dinero
Dominican Republic It has also shown remarkable performance in the EIU rankings. Recognized for its political stability, the country presents consistent economic growth. Although it is a small economy, its market opportunities are growing. The Caribbean nation continues to attract investments thanks to its favorable environment and proactive policies.
Mexico Y Costa Rica They also appear in the ranking in positions 45 and 47 respectively, standing out for their relatively stable and favorable environment for investment. However, both countries face internal challenges that could affect their attractiveness for investors in the future.
Which country topped the EIU list as the best destination for investment companies in the world?
Whole world, Singapore Leading the EIU rankings as the best destination for investment companies is India. This small country in Southeast Asia with less than six million inhabitants has established itself as a haven for big investors due to its high level of trade openness, advanced technology, political stability and low level of corruption.
Singapore has aggressively promoted foreign direct investment, reduced taxes and removed trade barriers, especially in sectors such as technology, manufacturing and financial services. In addition, it has invested significantly in infrastructure, including ports, airports and public transport networks, to facilitate commercial activities.
Singapore leads the rankings released by the EIU. Photo: BBC
The country also has a highly qualified workforce, which attracts large capital. Singapore has become a maritime transport hub and a global financial center, cementing its position as a preferred destination for global investment.
The EIU is complete with the global top 10 Denmark, USA, Germany, Swiss, Canada, Sweden, new zealand, Hong Kong Y FinlandCountries that offer very favorable conditions for investors.
What factors does the EIU consider when evaluating a country’s business environment?
He Economist Intelligence Unit (EIU) Considers a variety of factors to evaluate a country’s business environment. These factors are divided into 91 indicators covering 11 main categories. Below are the key factors:
- Macroeconomic stability,
- inflation.
- Economic Development.
- Fiscal deficit and public debt.
- political stability,
- Threat of political instability.
- Continuity of economic policies.
- Have trust in the government.
- market opportunities,
- Market size.
- market growth.
- Access to international markets.
- trade restrictions,
- Customs barriers.
- No duty barriers.
- Foreign trade regulations.
- tax system,
- Corporate tax rates.
- Efficiency and transparency in tax administration.
- Tax incentives for investments.
- Legal and Regulatory Environment,
- legal protection.
- Protection of intellectual property.
- Labor laws.
- basic infrastructure,
- Quality and availability of transport (ports, airports, roads).
- Digital infrastructure (Internet, telecommunications).
- Access to energy and public services.
- Human Capital,
- Workforce Education and Training.
- Availability of qualified labor.
- labour cost.
- Financial sector development,
- Access to financing.
- Strengthening of the banking system.
- Development of capital market.
- Market competition,
- Level of competition in different sectors.
- Freedom to set up business.
- Competition rules.
- Innovation and technology,
- Investment in research and development.
- Adoption of new technologies.
- Ecosystem of startups and entrepreneurship.
EIU Ranking: 5 points to understand the ranking of best countries for investing companies
- Chile leads the way in investment: Chile is the most attractive destination for investment in Latin America, known for its macroeconomic stability, institutional strength and a strong financial system.
- Internal challenges: Gabriel Boric’s government’s policies, such as the obligation to partner with the state in the lithium sector and new labor laws, have created uncertainty among investors.
- Safety and crime: The increase in crime and the presence of organized crime groups are additional challenges for Chile.
- Argentina and Dominican Republic: Argentina shows significant potential under the new government of Javier Miley, while the Dominican Republic stands out for its political stability and continued economic growth.
- Global Rankings: Singapore tops the global list as the best investment destination, followed by countries like Denmark, the United States and Germany.