São Paulo’s financial center continues to be the most powerful magnet for foreign direct investment (FDI) in Latin America. As much as US$847.2 million in capital expenditure flowed into Brazil’s commercial capital last year, according to banking industry analyst The Banker.
Although the figure is significantly lower than the $1.4 billion FDI Sao Paulo received in 2013, when there was still strong demand for commodities, this confirms that the Brazilian city can still attract large sum of money in foreign investment even in today’s adverse economic climate.
Much of this money came from three international corporations: U.S. investment firm StepStone, the Canada Pension Plan Investment Board and Italian boutique advisory firm U-Start. Each project was estimated to be worth about $280 million, The Banker said, citing a study from fdi Markets.
Most of the companies setting up office in Sao Paulo today are global financial firms, while it seems many local firms are expanding overseas, because the city was also the second largest financial center in the region in terms of outward FDI.
Brasilia is placed second in the ranking compiled by the banking analyst. This was something of a surprise given that the Brazilian capital did not feature among the top 10 positions last year. It was largely because US-based claims management firm McLarens Aviation opened its second Brazilian office in the city, investing about $250 million.
Ranked third in the index is Mexico City, which attracted $178 million in FDI last year. The Chilean city of Santiago and the Uruguayan capital Montevideo occupy fourth and fifth place, respectively. Santiago received $134.5 million, while Montevideo obtained $96.9 million worth of FDI projects.
The Venezuelan capital Caracas topped the list of outward FDI flows.