Brazil Emerges as Top Destination for Foreign Investment from Europe

Brazil has become the leading recipient of foreign direct investment (FDI) from the European Union (EU) in Latin America, worth a total of $281.61m. This is further expected to displace Russia as the largest destination for European resources in burgeoning markets. According to the Bilateral Investment Map Brazil-European Union, the situation has been brought about by the recent conflict in Ukraine, which has led to a decrease in rapid foreign direct investment in Russia by Europe. This together with the upcoming trade pact involving Mercosur (Argentina, Brazil, Paraguay and Uruguay) and the EU, means that Brazil is well on its way to becoming the ultimate destination for European funds in emerging markets.

The study, a result of combined efforts between the Brazilian Agency for the Promotion of Exports and Investments (Apex-Brasil) and the EU office in Brazil, was presented during a meeting between Vice President of the European Commission Margrethe Vestager, and Brazilian Vice President Geraldo Alckmin. The document shows that Russia, with almost $300m worth of investment in productive projects, remains the biggest destination for European investment in emerging countries. However, Brazil poses a significant threat, with $263m invested, putting it in second place. Currently, Brazil accounts for 41.5% of all European FDI in Latin America and only 3.1% of that invested globally.

The Bilateral Investment Map Brazil-European Union states that Brazil is likely to take the lead in the context of the conflict in Eastern Europe, and the future free trade agreement between Mercosur and the EU positions Brazil as a key destination. The pact is understood to be a significant tool that will enable Brazil to overtake Russia in the race to receive European funding for emerging markets.