Conmexsal: Mexican investment in El Salvador to reach $1.2 billion in 2024

The association, which represents Mexican companies with operations in El Salvador, considers that there is a favorable environment for investment due to tax incentives and legal security.

The Mexico-El Salvador Business Council (Conmexsal) forecasts that Mexican investment in El Salvador will reach $1.2 billion in 2024, in response to tax incentives and the solid legal framework promoted by the government of President Nayib Bukele.

José Luis Netzahualcóyotl, president of Conmexsal, an association that represents companies such as Volaris, Tomza, Infrasal, Bimbo and Cyeemsal, said in an interview with this newspaper that El Salvador has become a point of interest for Mexican companies, both for reinvestment and for new projects.

“The image of El Salvador has taken a major boost in the business scenario, derived from the legal guarantees, innovation and the opportunity that this market represents. For Mexican companies, El Salvador is becoming a focus of attraction […] We see El Salvador as an emerging market that is innovating a lot. From the part of financial technology with bitcoin, digitalization of processes, tax incentives,” he said.

It is important to mention that such capital will be invested in infrastructure, studies, modeling, purchases, product or process development, so the figure could be different from the foreign direct investment (FDI) recorded at the end of the year, since not all elements are included in this balance.

FDI is defined by the Inter-American Development Bank (IDB) as a category of the balance of payments that records a movement of foreign currency and “does not necessarily refer to the physical investment made by foreign companies in the host economy, since the latter can be financed with the use of other sources of foreign savings (portfolio investment and/or debt) or locally”.

Nevertheless, Mexico positioned itself in 2023 as the fourth country with the most FDI in El Salvador, with $77.3 million.

“That figure is a mix between investment in infrastructure, studies and products or processes in Salvadoran territory. Many subsidiaries of Mexican companies consider investing in the country, from modeling and infrastructure purchases or rental,” he explained.

According to data from the council, there are currently more than 40 Mexican capital companies with operations in the territory and many more with a strong interest in entering the domestic market.

In fact, the union leader said that in 2025 two trade missions with companies from different sectors will arrive in the territory, which have been organized by Conmexsal with the support of other business chambers.

“Among the sectors that are arriving with the intention of investing are transportation, information technologies, internet of things, infrastructure, ports, airports. Mexican companies show constant interest derived precisely from the guarantees offered by the country, the opportunity of a market that is growing, the innovation it represents,” he said.

On the other hand, Netzahualcóyotl, who also presides Grupo Cyeemex, a Mexican capital holding company that offers services of collection, transfer, use, recycling and final disposal of urban and industrial solid waste, assured that in the next two years they will strengthen their operations in El Salvador through their subsidiary Cyeemsal. In 2024 alone, they expect to inject around $15 million.

“As a company, we have increased our installed capacity, the infrastructure has grown 3 to 1. We have a greater number of collection vehicles model 2025. We are about to go to market with a new fleet of vehicles of recognized brands such as Volkswagen. We are implementing workshops with high technology that can give attention to our vehicles. This gives us continuity and a guarantee of service to the population”, he said.

Source: Diario El Salvador