• Creimerman Product Team

LATAM: Why technology investment in the region should be on your watchlist




Zoom, Microsoft Teams, Google Meet, to name but a few, are examples of technology we now see as synonymous with day-to-day life. Nowadays, our virtual world and connections are as important as those we have in the physical work of social environment. With everyone from all corners of the globe experiencing differing personal settings and circumstances, technological dependence is one thing we all have in common, arguably more so than ever. In Latin America, technology opportunities have continued to emerge, unique for the potential benefits that come with investment in the sector in the region, and with predictions of a 7.7% increase in investment in technology this year, there seems no better time than the present to become a part of the boom.


Why choose Latin America?

With estimates from the United Nations indicating a possible loss of 8.5 million jobs in the region due to the pandemic, it would seem that the main sectors making up the numbers are those involving working environments full of other people that have been prohibited from operating as normal. However, this threat of job loss has stimulated a development in technology from many businesses in order for them to stay ahead of the curve and innovate away from traditional environments, saving jobs and also upgrading systems to present the region as a leader in new technologies. If you are looking to invest, a booming technology sector emerging from a pandemic environment such as this appears to be a great place to start.


What benefits could I take advantage of by investing in the region?

According to ‘Mondato’, technology output began to take off in the region in 2019 when 7 unicorn companies emerged as a result of foreign investment. These technology start-up companies now valued at over US$1 billion each is a benefit in itself, as those who invested in these companies in 2019 will have seen generous returns. With the predicted market expansion previously mentioned, could a repetition be on the cards again, and will you be a part of it this time round?


Tax incentives

Another key thing to mention is that if you are looking to invest in technology by starting a business, there are many initiatives across Latin America that promote this. One such example is Colombia, where newly founded tech businesses can gain a 7-year 100% income tax exemption. If you are tempted by this, it would also be worth considering Mexico’s EFIDT (Fiscal Stimulus for the Investigation and Development of Technology), a scheme in which foreign investment is the target, with tax credit on offer to offset against income tax, usable during a 10-year period.


So, with the attractive offers above taken into consideration, along with the potential returns of investing at a time like this, perhaps there is a light at the end of the tunnel of economic struggle incurred by the present pandemic after all, especially with the tax exemptions that will make every extra penny go further in an increasingly difficult economic climate in which we are all finding it hard to adapt.


If you are interested in finding out more, contact us today. We are ready to assist you in your ventures and will be delighted to impart our knowledge in cross-border investments with you in order to make your projects as successful as possible.


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