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DatabankOctober 31 2013

São Paulo attracts largest financial services FDI

Foreign direct investment into the financial services sector of São Paulo and Rio de Janeiro is booming, while specialist financial centres in the Caribbean are having a positive impact on the global economy.
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São Paulo attracts largest financial services FDI

São Paulo’s financial centrecontinues to be the most powerful magnet for foreign direct investment (FDI) into Latin America and the Caribbean. In the 12 months to August 2013, FDI into the Brazilian city’s financial sector totalled $851.1m over eight investment projects. 

Another Brazilian hub, Rio de Janeiro, is present in the top 10 ranking. With $72.9m and three projects, it is placed sixth. The coastal city has grown the size of its financial sector thanks mainly to the expanding business of asset managers, as well as private equity and venture capital funds. Port-related businesses are also expanding. For example, Norway’s marine insurance provider Assuranceforeningen Gard opened a new office in Rio de Janeiro to serve the local reinsurance market.

FDI injection

Bogotá has reached a relatively close second position in the list, with $698.7m in investments and six projects. This is an almost 10-fold increase on the previous 12 months’ figure of $71.7m. Despite policy measures eroding Argentina’s appeal as an investment destination, the country’s financial hub, Buenos Aires, attracted much higher FDI than in the 12 months to August 2012: $135.5m and four projects were signed off in the 12 months to August 2013, compared with $33.5m and one project in the previous 12 months. Mexico City also received substantially larger investment, which totalled $112.5m over three projects, compared with the single $41.9m project it attracted in the previous period.

Bermuda’s Hamilton continues to generate the highest outflows of FDI from the region, with $259.9m and seven projects. Another specialist financial centre, the Bahamas’ Nassau, is also present in the table in third place with $97.2m – supporting claims that these hubs have a positive impact on the global economy and serve as catalyst for FDI. In the previous top five list, the other specialist hub present was Grand Cayman with a total of $96.9m in FDI outflows.

Capital expenditure has been estimated for a number of projects, which is why similar ventures across the region have been given identical values. FDI ventures into Santo Domingo and Panama City, for example, both total two projects each for $67.2m.

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Read more about:  Americas , Databank , Rankings & data
Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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