Unlocking Growth in 2026: Why Latin America remains a top destination for foreign company formation
company formation • February 9, 2026 • Written by: Ongresso - Business Beyond Borders
As we navigate 2026, Latin America continues to emerge as a powerhouse for international expansion. With resilient economies rebounding stronger than expected, accelerating nearshoring trends, and a wave of pro-investment reforms, the region offers compelling advantages for global businesses seeking diversification and new revenue streams. From access to a young, skilled workforce to abundant natural resources and strategic trade agreements, setting up operations here positions companies for long-term success amid global uncertainties.
Unlike more saturated markets, Latin America combines high growth potential with improving ease of doing business. Recent data highlights stable regional GDP growth around 2.4-3% projected for the year, driven by commodity exports, manufacturing relocation, and digital economy expansion. For foreign investors, this translates into opportunities in sectors like technology, renewable energy, agribusiness, and logistics.
Key drivers making 2026 ideal for market entry
Several macro trends are fueling interest in Latin American company formation:
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Nearshoring boom: Proximity to the US and Europe, combined with supply chain resilience needs, has made countries like Mexico a nearshoring hotspot. Companies are relocating operations to reduce risks and costs, benefiting from USMCA advantages and lower labor expenses.
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Political and regulatory stability in select markets: Nations such as Chile and Uruguay stand out for consistent policies, low corruption indices, and investor-friendly environments. Meanwhile, reforms in Colombia and Peru have streamlined foreign ownership rules.
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Incentive programs: Many governments offer tax breaks, free trade zones, and subsidies for strategic industries. For instance, Brazil's large domestic market pairs with sector-specific exemptions, while Uruguay's free zones provide significant duty relief.
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Digital transformation: Increasing online registries and e-signatures in countries like Mexico, Colombia, and Brazil have reduced setup timelines from months to weeks in some cases.
These factors create a fertile ground for entities ranging from startups to multinationals.
Choosing the right country: A comparative overview
Align your choice with business objectives, ownership model, and local laws. Common structures for foreign investors include:
- Simplified joint-stock company (SAS or similar): Great for flexibility, single-owner setups, low capital requirements, and easy governance. Popular in Colombia, Mexico, Argentina, Peru, Ecuador, and Uruguay.
- Limited liability company (SRL, LTDA, or S. de R.L.): Suitable for partnerships, with limited liability and simple management. Widely adopted in Brazil, Chile, Mexico, and Argentina.
- Corporation (SA or Sociedad Anónima): For larger-scale ventures or future public offerings, featuring structured oversight.
- Branch office: An extension of your parent company without forming a new entity, though registration and a local representative are needed.
Success often hinges on aligning your business model with the most suitable jurisdiction. While processes share similarities across the region generally allowing 100% foreign ownership in most sectors differences in stability, market size, and costs are crucial.
Here's a snapshot of top destinations for foreign investors in 2026:
|
Country |
Key Strengths |
Ideal For |
Considerations |
Typical Setup Time |
|
Mexico |
Nearshoring leader, USMCA access, manufacturing hub |
Logistics, tech, automotive |
Currency volatility, regional security variations |
4-8 weeks |
|
Brazil |
Largest market (200M+ consumers), diverse economy |
Consumer goods, agribusiness, energy |
Complex tax system, higher bureaucracy |
8-12 weeks |
|
Chile |
Highest stability, strong institutions, mining/renewables focus |
Finance, green energy, services |
Smaller market size |
4-6 weeks |
|
Colombia |
Rapid growth, young talent pool, Pacific/Atlantic access |
Tech startups, BPO, coffee/export |
Ongoing infrastructure development |
5-8 weeks |
|
Uruguay |
Tax incentives, free zones, high quality of life |
Holding companies, IT, pharmaceuticals |
Higher operational costs |
4-7 weeks |
This selection reflects current FDI inflows and ease-of-business rankings, with Mexico and Brazil capturing the bulk of investments due to scale and proximity advantages.
Navigating challenges for smooth expansion
While opportunities abound, preparation is key to avoiding hurdles:
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Regulatory variations: Tax regimes and labor laws differ significantly, partnering with local experts ensures compliance from day one.
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Cultural and operational nuances: Building relationships (personal networks) remains vital alongside formal processes.
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Economic factors: Inflation controls and currency hedging strategies are essential in volatile environments.
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Sector-specific rules: Industries like fintech, pharma, or mining may require additional approvals.
Forward-thinking companies mitigate these by prioritizing due diligence and leveraging specialized support for everything from entity structuring to ongoing compliance.
Position your business for Latin American success
In 2026, Latin America is not just an emerging market, it is a strategic priority for resilient growth. Whether you are leveraging nearshoring, accessing large consumer markets, or unlocking incentives, establishing a local presence opens doors that remote operations cannot.
At Ongresso, we specialize in helping international businesses enter the region smoothly. Our team provides tailored guidance on jurisdiction selection, incentive optimization, and end to end compliance management, so you can launch faster and stay focused on what matters most: growth.
Ready to Launch Your LATAM Venture? Contact Ongresso today for expert advice on incorporating in LATAM. Explore https://ongresso.com or schedule a free session to begin your journey.