According to speyside-group.com, nearshoring investment in Latin America grew 51% in 2022 — a surge accelerated by supply chain disruptions from the pandemic and U.S.–China trade tensions. The report states that companies are now shifting focus from cost-driven relocation to strategic risk mitigation, prioritizing resilience, redundancy, and geopolitical alignment in supply chain decisions.
Regional Divergence, Not Uniform Growth
The source states that nearshoring benefits are no longer spreading evenly across Latin America but are concentrating in specific countries and sectors. Mexico continues to capture the bulk of manufacturing-related investment, driven by deep integration with U.S. supply chains and trade frameworks like USMCA. In contrast, other nations are carving out specialized roles: Colombia is positioning itself in services, while Brazil, described as Latin America’s largest economy, is advancing resource-based industrial capacity — particularly in green mobility and energy.
Fiscal Incentives by Country
Governments across the region have introduced targeted fiscal incentives to attract nearshoring investment:
- Mexico: Offers tax deductions of 56–89% for high-export industries (automotive, pharma, electronics, aerospace, agribusiness), plus an additional 25% deduction for personnel training expenses over three years. A separate policy for the Inter-Oceanic Corridor of the Isthmus of Tehuantepec grants a three-year corporate income tax exemption, followed by a 50% deduction for the next three years for investments in semiconductors, vehicles, medical devices, and ICT.
- Brazil: Launched the MoVer program under President Lula da Silva, providing fiscal incentives worth more than $3 million USD ($19 billion BRL) in tax credits over five years for green mobility and energy projects. It also includes import tax reductions for automakers that invest at least 2% of total spending in R&D and innovation within the local supply chain.
- Colombia: Offers a 15% corporate income tax reduction for tourism infrastructure and up to 50% tax reduction for 15 years on investments in energy efficiency or non-conventional energy sources — alongside VAT exemptions for green energy equipment purchases. A 2023 draft decree would allow authorized automakers to import components at zero tariffs to support green-vehicle production.
Emerging Constraints Shape Execution
According to the report, infrastructure bottlenecks, regulatory uncertainty, and talent gaps are emerging as critical limiting factors — especially for countries aiming to move up the value chain. In Mexico, strong nearshoring inflows have not yet translated into sustained productivity gains, with concerns cited around energy reliability, fiscal conditions, and upcoming trade reviews affecting investor confidence. More broadly, the regional landscape is becoming increasingly fragmented, with supply chains reorganizing around specific corridors and industrial clusters rather than a unified Latin American strategy.
Practitioner Implications
For global supply chain professionals, this signals a decisive shift: success in nearshoring is no longer about selecting “Latin America” as a monolithic region, but about navigating highly differentiated country-level dynamics — including sector-specific incentives, regulatory timelines (e.g., Colombia’s pending zero-tariff auto decree), and execution risks such as energy access or workforce readiness. The emphasis on resilience over cost means sourcing teams must now integrate geopolitical alignment, dual-sourcing feasibility, and local supplier certification into due diligence — not just landed-cost modeling. As noted in the source, nearshoring has moved from a broad-based growth narrative to a selective, execution-driven reality.
Source: speyside-group.com
Compiled from international media by the SCI.AI editorial team.
