The Latin American investment boom in Spain has figures and goes far beyond the purchase of luxury homes in the center of Madrid or Barcelona. The latest Icex calculations show that the investment stock of this region in Spain has just exceeded 86,000 million euros, after registering a strong acceleration and adding 20,000 million in just two years.
The increase is 40% and makes Latin America, if it could be counted as a single country, the fourth largest investor in Spain, behind the United States, the United Kingdom and France. Money has changed direction and now travels more from Latin America to Spain than in the opposite direction, encouraged above all by Mexico, which is on its way to becoming the first Spanish-speaking economy in terms of GDP.
“Is Spain the new Miami?”, the Icex Financing Director, Alberto Sanz Serrano, asked a few days ago at the Latibex forum, held in Madrid, in which there was no shortage of comments and reflections on the new investment trend. The organization estimates that last year some 400 new business projects from Latin America were registered in Spain, which has become the gateway for money in the region: the number of initiatives announced is four times higher than in Germany, 13 per year. from France and almost 40 from Italy.
The Mexican Frank Aguado, senior advisor of the investment firm Brücke, cited at the same meeting the factors that, in his opinion, attract Latin American investors. Apart from the cultural connection, there is interest in acquiring technology, expanding the market, enjoying tax advantages and taking advantage of an environment of personal security that does not occur in countries with high crime rates.
At a corporate level, the largest Latin American investor in Spain last year was the Ecuadorian bank Banco Pichincha, ahead of the Mexican cement company Cemex and the Brazilian footwear brand Havaianas. The Brazilian shareholders of Sidenor and the Mexican shareholders of Grupo Bimbo and Cristal Glass are also among those who have made the greatest efforts.
Cuatrecasas partner Antonio Barba believes that, contrary to popular belief, Spain has a very attractive fiscal framework for Latin American investments. He has the figure of the ETVE, the Foreign Securities Holding Entities, which encourages the creation of holding companies in Spain by offering a 95% exemption for dividends and capital gains coming from abroad. “Spain is an ideal region with nothing to envy of Miami or London,” he says. “We are also the country in the world with the most double taxation agreements with Latin America.”
The main source of investment by far is Mexico, with 46.8% of all resources arriving in Spain last year. It exceeds 13.7% in Argentina and 8% in Colombia or Venezuela. However, Brazil, which accounts for 9.3% of the total, is gaining strength in the opinion of experts due to the growing fiscal obstacles and restrictions in the housing market in Portugal, its reference country.
Attracted by opportunities, the Brazilian investment bank BTG Pactual, a leader in its region, has just opened offices in Europe, one in Madrid and another in Luxembourg, according to its executive director in Spain, Pablo López Lázaro. “The reasons for investing in Spain have changed. From a personal connection it has evolved to entrepreneurship, to the search for geographical diversification and the interest in expanding to the rest of Europe,” he says.
In businesses such as real estate, investment has gone from being personal to being extended to investment companies, socimis. Adding to the trend is that “the economic elites are choosing Spanish universities to train the next generations,” he points out.
Experts cite one last factor. Until now, Miami was a relatively affordable destination for Latin American investors because it barely competed with the American one. At most, he did it with “retirees,” says López Lázaro. However, now there are large capitals in the country interested in Florida and that diverts attention to Spain, where, despite the price increases, a “more reasonable financial alternative” is seen.
