The LatAm Opportunity, Not Only Nearshoring

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By: Mateo Hoyos, Esq.

The quote above is from the “Liberator,” Simón Bolívar, who had a belief there was no need to repeat mistakes of the past. The quote embodies the core values of Hoyos & Associates (“H&A”), a firm uniquely positioned to guide companies and individuals in capitalizing on the opportunities in Latin America. With my experience living and studying in the US, Mexico, and Colombia, I have witnessed the social network effects in the Americas that are worth noting, and H&A is ready to leverage this knowledge for our clients.

The LatAm Opportunity, Not Only Nearshoring

The nearshoring opportunity in LatAm is a significant development, but it's important to note that it doesn't benefit all countries equally. At H&A, we believe that many Latin American countries which have benefited or continue to benefit from a change in sentiment regarding nearshoring and friendshoring will experience sustained economic growth. We have strategically placed our offices in countries poised to benefit from this reality, where the rate of technological adoption is constant, and the amount of capital deployed tells the same story.

The tech hubs that are of the most interest to H&A are Colombia and Mexico. This is partly because we are licensed in Colombia but also because we have seen how venture-backed companies can grow their market share as previous in-house counsels and now counsels to firms that decide to expand into either market after or just before a financing round is finalized. We benefit from this in LatAm because most of the economic trade from LatAm is Spanish-speaking, making it a viable option to localize international expansion boldly but effectively. It is also important to note how international agreements (e.g., the Pacific Alliance) play an essential role in how ventures in these two countries can capitalize on opportunities. The LatAm opportunities from the social network effects playing out between founders of Latin American origin based in the United States and starting ventures that utilize each country's strengths enable partners and associates of H&A.  

Demographics in the U.S., Globalization, and LatAm

The demographics between the Americas give confidence that social network effects that are currently present will continue to expand and accrue value. In the U.S. alone, according to the U.S. Census Bureau, 1 in 4 Americans are likely to be Latino by 2060. The most recent U.S. LatinoGDP report indicates that if Latinos living in the United States were an independent country, the U.S. Latino GDP would be the fifth largest GDP in the world, more significant than the GDPs of India, the United Kingdom, or France. It is important to note that none of these spectacular data points would be feasible if not for the United States of America. This place has given the many individuals represented in the data a place where social mobility is possible, and the rule of law is at the forefront. 

Regarding globalization, we think the nationalistic tendencies stemming from social unrest and general difficulties in adapting to 21st-century life aren’t going anywhere, but neither is globalization (hopefully). Globalization, defined as “the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets” helps put into perspective the free trade agreements the U.S. has entered, for example, United States-Mexico-Canada, and the FTA with Colombia. LatAm has always been connected to the U.S., but now it isn’t just the large corporations that are taking advantage of FTAs or globalization; it's the everyday businesses we know here in the U.S. - Because LatAm is continually becoming more competitive, with broadband (connectivity), education and the rule of law, factors such as COVID accelerated the connectivity trend, companies have looked to operate and hire locally in LatAm. We believe this trend will continue, especially with the growth of an executive-level Latino demographic base that is ever present in the U.S.-

Today, it is expected to hear from a founder, “I am based in Miami, Florida,” to state that their marketing team is based in Colombia, and their engineering teams are based in either Argentina, Brazil, Mexico, or Uruguay. This trend, we believe, will continue to increase as the U.S. demographics skew a bit more to originate from the Spanish-speaking LatAm countries. 

“History doesn't repeat itself, but it often rhymes.” 

As a firm, Hoyos & Associates sees the opportunities in servicing the LatinX community-based in the U.S. and Latin Americans seeking to introduce new products to their local market. We are well-positioned to partner with crucial U.S. investors who are seeing the opportunities in LatAm. We view the emerging markets of LatAm not only as a source of value accrual but also as strategic defenders of a free and democratic world.

H&A seeks to become another bridge that can be utilized by individuals and companies based or operating in LatAm and intending to forge lasting, balanced relationships. The need for a balanced relationship is a sentiment stated many times before as the famous New York Times reporter and writer John Gunther has referred to the U.S. - LatAm relationships in his book “Inside South America” - “One development is almost certain - the new revolutionary regimes if they materialize, will almost surely carry a decisive anti-American note, if only because we in the United States have been so long and intimately associated with the ancien régime..” Although we do not share the idea that history is repeating itself, we do acknowledge that since that observation was made (almost 60 years ago), we have witnessed, even if slow, social mobility on a positive trend in countries that have avoided sharing an anti-American approach to daily life and embraced technological disruption occurring locally and abroad.. We share Bolivar’s idea that it’s essential not to repeat past mistakes - and perhaps it remains true that “the freedom of the New World is the hope of the Universe.” 

If you want to see an illustrative infographic on the U.S.-LatAm economic ties, please see the PDF.

Our Manifesto

Hoyos & Associates represents and counsels international companies and individuals. We focus on companies and individuals with a US nexus, such as investors in US corporations with active/passive investments in Latin America and first-, second-, or third-generation dual citizens intending to manage cross-border assets.

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