U.S. companies, private investors, and family offices are taking a fresh look at Latin America. The Economist recently reported that foreign direct investment in the region rose to an estimated $204 billion in 2025, reversing a recent decline, while mergers and acquisitions increased by nearly half. At least half of the increase in foreign direct investment came from the United States.

The reasons extend beyond traditional growth opportunities. Supply-chain resilience, access to critical minerals, energy, manufacturing capacity, and the broader push to deepen economic ties across the Western Hemisphere are increasingly shaping investment decisions. For U.S. investors, that creates opportunity; but it also makes early tax and legal planning more important.

The central lesson is simple: the structure of a Latin American investment should be designed around the commercial objectives of the investment, not tax considerations in isolation. How the investment is held and financed, how operations are organized across jurisdictions, how earnings are returned to investors, and how an eventual exit is handled can all materially affect long-term economics.

Choose the right investment structure

One of the first questions is how the investment will be made. Depending on the circumstances, a U.S. investor may invest directly, through a local entity, through a joint venture, or through a holding company in another jurisdiction. There is no single structure that works across Latin America.

Tax systems, withholding regimes, foreign-investment rules, and treaty relationships vary considerably by country. The United States has income tax treaties with only a limited number of jurisdictions in the region, so a structure that works well in Mexico, for example, may make little sense for an investment elsewhere in Latin America. Mexico’s deep trade integration with the United States and its income tax treaty create a different planning environment from many other markets in the region.

The analysis must also account for U.S. international tax rules. A structure that appears efficient from the local jurisdiction’s perspective can produce very different results once U.S. rules governing foreign corporations, foreign-source income, and foreign tax credits are taken into account. The optimal structure therefore requires coordinating local-country considerations with the U.S. tax consequences from the outset.

Treat Latin America as a collection of markets

One of the most important mistakes investors can make is to approach Latin America as though it were a single legal or tax market. But Latin America is not a monolithic market. The region includes countries with very different tax systems, regulatory environments, capital markets, foreign-investment rules, administrative practices, and treaty networks.

That means the same U.S. investor may need materially different structures from country to country. It also means tax planning should be coordinated with corporate, regulatory, and commercial advice. A structure that is tax-efficient but difficult to operate, finance, govern, or eventually sell may not be the right structure.

Consider financing and cash movement from day one

The choice between debt and equity can affect both the economics of an investment and the ability to move money across borders. Interest deductibility, withholding taxes, capitalization limitations, and other local rules can determine whether debt financing provides the expected benefit. These questions become more complicated when financing involves multiple entities or jurisdictions.

Investors should also consider how cash will move through the structure over time. Dividends, interest, royalties, service payments, and other intercompany flows can receive very different tax treatment. The ability to repatriate earnings efficiently should be modeled before the investment is made, rather than addressed only after profits accumulate offshore.

Plan for operations, integration and compliance

The tax analysis does not end when an acquisition closes or a new operation begins. As a Latin American business becomes integrated with existing U.S. or global operations, additional issues can arise around transfer pricing, intercompany agreements, payroll, local registrations, and the allocation of functions, risks, and intellectual property among related entities.

For multinational groups, these issues can affect both tax compliance and the practical operation of the business. The goal should be a structure that remains workable as the investment grows, rather than one designed only for the initial transaction.

Think about the exit before the entry

Exit planning is often easier when it begins before an investment is made. The original ownership structure can affect the tax consequences of a future sale, recapitalization, public offering or other liquidity event. An investor focused primarily on minimizing tax or administrative burdens at entry may discover years later that the structure creates unnecessary friction when it is time to sell.

That does not mean investors can predict exactly how or when they will exit. It does mean that plausible exit scenarios should be modeled when the investment structure is established. Flexibility has value, particularly in markets where business conditions, tax rules, or regulatory priorities may change over the life of an investment.

For family offices and privately held businesses, the analysis can be broader

For family offices and privately held businesses, an investment in Latin America may sit within a broader international ownership and succession plan. Governance, generational transfers, liquidity needs, and the location of family members can all influence how an investment should be owned and financed. Those considerations may be as important as the immediate tax cost of the transaction.

This is one reason cross-border investment planning increasingly requires an integrated view of international tax, corporate structuring, private wealth and the commercial objectives of the investors.

Growing opportunity brings greater complexity

The increase in investment does not mean the region is without risk. The Economist points to continuing fiscal, infrastructure, and workforce challenges, as well as political and policy uncertainty in parts of Latin America. Those differences reinforce the importance of evaluating opportunities country-by-country.

For U.S. investors looking south, the strongest structures are usually those that align tax efficiency with commercial flexibility, financing needs, governance, and an eventual exit. Considering the full investment lifecycle—from entry and financing through operations, repatriation, and exit—can identify problems early and avoid structures that become costly or difficult to unwind later.

As U.S. investment in Latin America continues to grow, the legal and tax questions will become more important, not less. The opportunity is significant, but so is the value of getting the structure right at the beginning.