Despite facing its fair share of recent political and economic upheaval, an expanding middle class and large consumer base mean Latin America remains a market of interest and potential growth for enterprises across an array of industries.
For those eager to capitalise on these opportunities, setting up a regional hub of operations is essential, but selecting a location for fostering relationships with partners across an array of geographies and cultures is no easy task.
When choosing a strategic location, factors including physical proximity, workforce, infrastructure and regulatory environment must be carefully considered. As Investment Monitor reported earlier this year, however, the region remains in need of “a supply-side revolution”, with rigid labour regulations, poor competition laws, regressive taxation and bloated public sectors among the contributing factors stifling private enterprise.
Given these challenges – and the fact that more than 70% of its total global exports ($50.1bn in goods) goes to Latin America – it is hardly surprising that a growing number of enterprises are looking towards Florida as a base of operations, enabling them to establish an LAM presence, while mitigating risk and ensuring stability.
A gateway to Latin America
The Sunshine State is known for its business-friendly regulations and low tax rates and Florida has a long-standing track record when it comes to reaching Latin American markets, with nearly one-third of all US exports to Latin America and the Caribbean shipped from or through the state.
The state is home to the Latin American headquarters of a multitude of global corporations, including Microsoft, Marriott International, and Ricoh, but is also attracting a growing number of smaller enterprises, including in the tech start-up space, looking to grow their regional presence.
Offering more direct, non-stop flights to both regions than any other US state, Florida is well-positioned to manage regional business. Executives in Miami can reach Mexico City, Bogota and Panama City in approximately three and a half hours, as well as flying to New York City or Chicago in just three hours.
A lot of those journeys are taken onboard a Delta Air Lines aircraft. Together with airline partners Aeromexico, Air France KLM, Virgin Atlantic and SkyTeam, Delta offers connectivity from South Florida to all major markets around the world.
Following Delta’s $1.9bn acquisition of a 20% equity stake in LATAM in late 2019, the US travel giant has entered a joint venture with Latin America’s largest airline, pending regulatory approvals, which includes a gateway hub in Miami.
“Florida will continue to play an essential role for Delta, and, once approved, our joint venture with LATAM Airlines will augment our service and provide more and improved travel options and a network of benefits for customers travelling between North and South America,” says Luciano Macagno, Delta Airline’s managing director for Latin America, the Caribbean and South Florida.
“South Florida is home to many of our global and regional corporate partners, who base their Latin American headquarters in what is commonly known as ‘The Capital of Latin America’ [Miami], further enhancing the importance of this market for our Latin America footprint.”
Other key partnerships include those with the Miami-Dade Beacon Council, the Greater Fort Lauderdale Alliance in Broward Country and local chambers of commerce. For Macagno, fostering these relationships has been instrumental in helping Delta expand its network with the local community and better serve their needs.
A talented workforce
The managing director has been particularly impressed by the highly skilled talent available in the Sunshine State. “Delta has a very talented and diverse team of colleagues in Latin America and Florida with superior attributes, language skills and a deep knowledge of their markets and our customer preferences,” he says.
“While our team in Florida reflects a mix of local talent and colleagues who have transferred from other cities, Florida offers a skilled workforce we can easily recruit from, including in the travel and tourism industries.”
The state’s multicultural and multilingual workforce certainly makes it easier to do business with Latin America. Just under 30% of all Florida businesses are owned by a person of Hispanic descent, while 27% of the population speaks a second language, with four million people speaking Spanish and a further 86,000 fluent in Portuguese.
The state also serves as something of a diplomatic hub and offers a strong network of support with 40 binational chambers of commerce and 94 sister-city relationships focused on Latin America and the Caribbean to help ensure a smooth transition into the community.
Florida’s top exports to Latin America include aviation parts, telecommunications equipment, computers, medical equipment and motor vehicles. The state’s leading destinations for high-tech exports are Brazil, Paraguay, Colombia, Peru and Argentina.
Macagno contends that Florida remains rich with opportunities for companies seeking to expand their presence in Latin American markets that go far beyond the travel industries.
“The tech and life sciences industries are probably the two most vital sectors these days,” he notes.
“The finance and wealth management industries also continue to play a prominent role given the geopolitical landscape in the region. Florida is not only well-positioned geographically, but it is also a wonderful place to live and in which to do business.”
Indeed, north-east Florida is home to a vibrant life sciences hub, with rapidly growing biomedical, tech and medical device manufacturing sectors. Moreover, the state is home to a thriving international banking centre with more than 900,000 employees.
The tech start-up space is also increasingly dynamic, with Miami now regularly cited as the best base of operations for Latin American entrepreneurs. The strong foundations and support offered to companies of all sizes looking to establish Latin American operations in Florida, underpinned by its geographic proximity, extensive infrastructure and access to a multilingual, dynamic workforce, will only accelerate that direction of travel.
Whether early-stage start-up or global corporation, for those looking to gain access to the diverse and emerging opportunities Latin America has to offer, while avoiding the political and operational challenges it can present, it is little wonder Florida seems like the perfect gateway.
