Chinese Firms Investing in Latin America Advised to ‘Act Locally’ Amid Legal Risks
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BYD vehicles on sale at an automobile dealership in Camacari, Bahia State, Brazil in March. Photo: VCG
As Chinese companies ramp up investment in Latin America, they should adopt “when in Rome” strategies from a legal standpoint to navigate risks tied to political transitions and regulatory hurdles in the region, lawyers and industry experts said.
The strategy is essential for dealing with potential shifts in government, legal and regulatory complexities, foreign-exchange risks, and issues including the protection of indigenous communities, said Zhang Hong, a partner at Baker McKenzie FenXun, during a seminar on Sept. 16.
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- Chinese investment in Latin America is rising, focusing on new energy, infrastructure, consumer markets, and data centers, with 2024 trade at $518.5 billion and direct investment at $14.7 billion.
- Chinese brands accounted for half of Latin America’s 413,000 electric vehicle sales in 2024, and nearly all electric buses were from China.
- Legal experts recommend adapting to local regulations and monitoring political, regulatory, and foreign-exchange risks, especially amid Brazil’s complex environment and upcoming 2026 elections.
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Who’s Who
- Baker McKenzie FenXun
- Zhang Hong, a partner at **Baker McKenzie FenXun**, provides insights for Chinese companies investing in Latin America. She advises adopting "when in Rome" legal strategies to navigate risks from political transitions, regulatory complexities, foreign-exchange issues, and indigenous community protection. Zhang observes a shift from traditional sectors to new energy, infrastructure, consumer markets, fintech, and internet technology.
- BYD Co. Ltd.
- BYD Co. Ltd. (比亚迪股份有限公司) has begun production at its Brazilian plant this year. This move aligns with a trend of Chinese automakers shifting from exporting to local manufacturing in Brazil, the world's sixth-largest auto market. In the new-energy vehicle (NEV) sector in Latin America, Chinese brands, including BYD, accounted for half of new registrations in 2024.
- Great Wall Motor Co. Ltd.
- Great Wall Motor Co. Ltd. has started production at its plant in Brazil this year. This move is part of a larger trend where Chinese automakers are shifting from exporting to local manufacturing in the world's sixth-largest auto market.
- Guangzhou Automobile Group Co. Ltd.
- Guangzhou Automobile Group Co. Ltd. (GAC) is a Chinese automaker that has announced plans for local production in Brazil. This move signifies a shift for Chinese automakers from exporting to local manufacturing in the Latin American market.
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