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The Economic Cooperation between Vietnam and Australia

Picture - Local Insight Vietnam Australia
May 2024

Since establishing diplomatic relations in 1973, Vietnam and Australia have cultivated a strong and durable relationship, bringing diverse and growing interests. Currently, bilateral relations continue to grow, and Vietnam is considered one of Australia’s most important partners.

In 2023, Vietnam and Australia celebrated the 50th anniversary of their diplomatic relations.

What is the Australia-Vietnam Enhanced Economic Engagement Strategy (EEES)?

Recently, in March 2024, the two countries elevated their relations to a comprehensive strategic partnership. This partnership aims to strengthen bilateral cooperation in various fields, including climate, energy, trade investment, digital transformation, innovation, and security.

This partnership also reflects a shared ambition for the stability and prosperity of the region. Specific initiatives include a peacekeeping agreement, ministerial-level security dialogues, and enhanced cooperation in agriculture and education.

By implementing the Australia-Vietnam Enhanced Economic Engagement Strategy (EEES) across key sectors, both countries aim to become top 10 trading partners and double two-way investment.

  • One of the primary goals of the EEES is to recover the Indo-Pacific region, which suffered and went into recession during the COVID-19 pandemic. Thus, by boosting economic growth and creating jobs, this strategy aims to revitalize the region’s economy, enhancing stability and prosperity for both Australia and Vietnam.
  • Since the establishment of diplomatic relations between Australia and Vietnam, the bond between the two nations has strengthened considerably. Today, « almost 300,000 people of Vietnamese ancestry live in Australia and Vietnamese is the fifth most spoken language in Australia » (source https://www.dfat.gov.au/australia-vietnam/eees/en/strategy/overview.html)

Vietnam and Australia’s Strategic Strengths

On the one hand, Vietnam’s rapid industrialization and strategic location near some of the world’s fastest-growing economies makes it one of the most trade-intensive economies globally. This industrial growth, combined with its strategic geographical position, enables Vietnam to act as a major hub for trade and investment in the region.

Australia, on the other hand, has abundant natural resources and benefits from strong demand within the Indo-Pacific region. Coupled with its effective institutions and governance, these assets make Australia an attractive partner for trade and investment. The country’s stable economic environment and rich resource base provide a solid foundation for sustainable growth.

What are the benefits from both Australian and Vietnamese companies ?

1. Australian companies

The partnership between Australia and Vietnam offers plenty of advantages for Australian companies, positionning them favorably to benefit from the economic dynamism and investment opportunities provided by the Vietnamese market.

Access to a fast growing market

Vietnam is experiencing rapid economic growth, with a steady expansion of its domestic market. For Australian businesses, it represents a unique opportunity to access a flourishing consumer base and diversify their international activities. The growing demand for high-quality goods and services in Vietnam opens up interesting prospects for Australian companies looking to expand their reach and increase their revenues.

What are the investment opportunities for Australian businesses in Vietnam ?

The economic cooperation between the two countries facilitates investments in several strategic sectors. Australian companies aspiring to expand in Vietnam can invest in promising sectors such as :

  • Renewable energy: With an increasing interest in sustainable energy solutions, Vietnam offers fertile ground for investments in green technologies and renewable energy infrastructure.
  • Technology: The Vietnamese market is in the midst of modernization and welcomes technological innovations.
  • Agriculture: Vietnam has a diverse agricultural sector, offering investment opportunities for Australian companies specializing in agricultural technologies, sustainable agriculture, and the export of agricultural products.
  • Education: The demand for quality education is on the rise in Vietnam. Australian educational institutions can take advantage of this trend by establishing academic partnerships, exchange programs, and research collaborations.

2. Vietnamese companies

Vietnamese businesses wanting to set up in Australia can benefit from opportunities for growth and development in this stable and diversified international market.

A stable and diversified market

Australia represents a valuable opportunity for Vietnamese companies. By accessing this market, they can benefit from the economic stability and high incomes of Australian consumers, paving the way for consistent demand for quality products. This stability also provides a favorable environment for Vietnamese companies seeking to establish a long-term presence and mitigate risks associated with economic fluctuations.

What are the export opportunities for Vietnamese companies in Australia ?

The relationship between Vietnam and Australia facilitates the export of Vietnamese products to the Australian market. Key sectors benefiting from this opportunity include :

  • Agriculture: Vietnamese agricultural products such as rice, seafood, and coffee are in high demand in Australia. It enables increased exports and meets the growing demand of Australian consumers for quality food products.
  • Textile: The Vietnamese textile industry can leverage this strategic partnership to export clothing and textiles to Australia. Indeed, Australian consumers have a significant demand for affordable and fashionable clothing, which Vietnam can supply effectively due to its cost-efficient production methods.
  • Electronics and Manufactured Goods: As a manufacturing hub in Asia, Vietnam can increase exports of electronics and manufactured goods to Australia, benefiting from access to a technology-savvy and high-consumption market.

Discover our infographic on the sector-wise trade overview between Vietnam and Australia in 2023:

Infographic - Vietnam and Australia Economic Cooperation

ALTIOS Corporate Finance supports PROTEX International in the acquisition of the US company Greenfield Manufacturing Inc. (GMI)

Press Release - May 2024

An acquisition allowing PROTEX International to expand its activities in the US market.

In May 2024, the shareholders of Protex International, Mr. Robert Moor and his family, an independent French company specialized in manufacturing niche chemicals, has acquired 100% of Greenfield Manufacturing Inc., a US manufacturer of specialty chemicals.

Greenfield Manufacturing Inc. is an industrial company specializing in chemicals manufacturing, founded by Duane Palmateer, and based in Saratoga Springs, NY.

The Protex International group is offering services to ensure the development, manufacturing, and distribution of specialty chemicals additives for a wide range of sectors.

This acquisition strengthens the position of Protex and its US subsidiaries (Protavic America) in the US market with now 2 locations.

The Protex International group has a long history of commitment to innovation and quality in the field of specialty chemicals. With its strong family values, the group shares with GMI a common passion for innovation, and customer satisfaction.

A transaction supported by Altios Corporate Finance

The role of Altios Corporate Finance was to support Protex International group in its M&A strategy in the US. The mandate involved several steps, from identifying companies that complement Protex International group in terms of geography and business lines, contacting the relevant targets, carrying out a financial analysis of these targets, and finally assisting the group through the negotiations and due diligence phases up to closing.

The role of Altios Corporate Finance:

  • Screening of the US market
  • Approach the qualified targets
  • Financial analysis and valuation of the target company
  • Due diligence coordination
  • Support in negotiating LOI, SPA & other transactional documents

Testimony of Protex International

The common values shared by GREENFIELD MANUFACTURING Inc. and PROTEX INTERNATIONAL - commitment to innovation and constructive relationships with our American customers - will ensure a smooth integration and maximize synergies

Robert Moor, CEO and Chairman – Protex International

Testimony of Altios Corporate Finance

We are pleased to have finalized this deal enabling Protex to strengthen its presence in the US. The similar values with GMI and its focus in specialty chemical products will ensure a smooth integration and maximize the synergies.

Alexandre Kaplan, M&A Director – Altios Corporate Finance

Participants

Buyer’s advisors:

  • Altios Corporate Finance (M&A): Alexandre Kaplan, Camille Garbolino and Nicolas Vacher
  • Mirick O’Connell (Legal): David E. Surprenant and Andrew A. Croxford
  • Shaheen, Pallone & Associates (Financial / CPA): Bill Shaheen Sr. and Bill Shaheen

Sellers’ advisors:

  • Independent (Legal): William W. Dailey
  • Independent (Financial / CPA): Rebecca J. Herrick

Contact Press: Alexandre Kaplan, M&A Director, a.kaplan@altios.com

Protex international x Greenfield

ALTIOS' participation in COFOCE - Select USA Event

Picture - COFOCE SelectUSA

May 2024

Leon, Guanajuato

Kickoff Presentation: The U.S. Market Opportunities

On May 16, 2024, we presented the Expansion opportunities for your company in the U.S., inaugurating a day of activities dedicated to supporting Mexican entrepreneurs in their expansion into the United States. During the presentation, we shared effective strategies for entering the U.S. market. In addition, success stories of the consulting firm were presented, both nationally and in other countries of the Americas. These initiatives position ALTIOS as an essential guide for expansion processes, providing specialized business advisors support.

Collaboration with HERSAN

In collaboration with Leon-based HERSAN, a company specialized in road safety and signage, ALTIOS demonstrated the change of perspective it has promoted in Chambers of Commerce, the COFOCE (Commission for the Promotion of Foreign Trade), and other businessmen. HERSAN‘s excellent reputation enabled ALTIOS to participate in this event and seek new prospects interested in expansion and growth. This endorsement highlights ALTIOS’ ability to offer growth opportunities through various U.S. market entry strategies.

Experts insights and Networking Opportunities

During the event, Jorge Prats Cardona, Head of Advisory for the Americas, and Juan José Pérez Irigoyen, Project Manager for the Americas, engaged with businessmen and future prospects interested in expansion. They established contacts with various sectors representatives supporting Mexican companies entering the United States. Key contacts included Clarissa Bonilla, Mexico representative of SELECT – USA. ALTIOS maintains a close relationship with SelectUSA and regularly participates in its events. For the next event in New York, the ALTIOS U.S. team will also be present, reinforcing its commitment to the U.S. market.

Diverse Sectors, Unique Value

Entrepreneurs from diverse sectors, especially manufacturing and product innovation, approached ALTIOS. These companies recognized ALTIOS’ added value, standing out from government support and other consulting firms because of its representation in 22 countries, its multi-sector specialization, and a wide range of customized services.

ALTIOS’ participation in this event helped Mexican companies identify significant growth opportunities through highly specialized professionals in strategy and international expansion. This boosted ALTIOS’ regional recognition and highlighted its crucial role in one of Mexico’s key manufacturing and innovation zones. With its strong presence and expertise, ALTIOS remains an invaluable partner for companies looking to expand into the competitive U.S. market.

ALTIOS Group strengthens its services in the United Arab Emirates by acquiring Steering Advisory, a consulting firm in accounting & tax services in Dubai

Press Release – May 22nd, 2024

Strengthening presence in the UAE and the Middle East

  • ALTIOS Group announces the expansion of its activities in the United Arab Emirates and the Middle East by acquiring 100% stake Steering Advisory headquartered in Dubai. As a leading international consulting firm dedicated to international growth, ALTIOS Group pursues its expansion into the world’s largest markets and key regional hubs.

  • Steering Advisory was founded by two lawyers, Guillaume de Rocquigny and Florian Guais, in association with Nabile Sabbani. The company has currently 12 staff members and manages corporate and accounting services for more than 100 international businesses willing to expand their business in Middle East.
  • Altios Group set up an office in the UAE 4 years ago. This acquisition reinforces Altios Group’s activities in the country on a panel of services from Strategic Advisory to Operational Execution, including:
    • Market Entry & Expansion: Market research, Go-To-Market Strategy, Business Partnership & Growth
    • Global HR Solution: Recruitment, Payroll services, visa & HR advisory
    • Corporate Services: Company set-up, Domiciliation & Management of International Subsidiaries (accounting, financial reporting, payroll, compliance, tax…)
    • Crossborder Acquisition: Screening, Negotiation, Due-Diligence, Transaction, Post-Acquisition Integration
  • Steering will reinforce ALTIOS’ Set-up pillar (Corporate Services), part of the international business expansion, on a large range of services: company formation, local domiciliation, directorship, legal compliance, accounting, payroll and tax, supply chain, and distribution platform.

ALTIOS Group’s Testimonial

“ Thanks to the team from Steering Advisory joining our group, we now have greater expertise to support our clients and partners in the region. We firmly believe that the Middle East offer great potential for our clients. As well we are eager to assist Middle East ecosystem to be better connected through our global network.
Further regional expansion would be announced in the coming months. ”

Bruno Mascart,

Co-Founder & Partner

Steering Group’s Testimonials

” The combination of Steering Advisory and Altios brings together Altios’ international network and resources with Steering’s Middle Eastern knowledge and expertise. In a region with new growth areas driven by a desire to diversify the economy, Steering Advisory by Altios will thus be able, alongside the law firm Steering Legal, to assist more companies looking for a one-stop shop and local experience to support them in the regional expansion of their activities. ”

Guillaume de Rocquigny, Florian Guais,

Co-Founders & Partners

About ALTIOS: Created in 1991, Altios offers international market expansion solutions to Small and Mid-Cap companies. With 40 offices in 22 countries and nearly 750 employees, ALTIOS has supported more than 10,000 companies in their international growth to simplify foreign market entry and accelerate business growth.

Our services: Strategy, Market Development, International HR Solutions, Management of International Subsidiaries, Manufacturing Investment and External Growth.

Altios works very actively with international banks, investment funds and government agencies to support their Corporate clients internationally.

Our values: Listening, Agility, Team spirit, Entrepreneurship, Passion.

Learn more at www.altios.com, Follow us on Linkedin.

Media inquiries : Patrick Ferron, Managing Partner, Altios, p.ferron@altios.com

The Healthcare & Life Sciences sector in China

Picture - Local Insight Healthcare & Life Sciences Sector in China
April 2024

China’s Healthcare and Life Sciences sector is among the largest and the most dynamic industries. With an increasing focus on health and well-being, China’s healthcare industry is at the forefront of innovation and expansion.

In this article, ALTIOS’ experts give key insights on the Healthcare and Life Sciences sector in China, and some recommandations to access this market.

The Evolution of China's Healthcare Sector

China’s pharmaceutical and life sciences industry has seen rapid growth in recent years, with pharmaceutical industry sales revenue growing an average of 21.4% annually. New healthcare reform policies gradually implemented by the Chinese government have been accelerating access to drugs in the retail market, away from the traditional in-hospital access.

An accelerating shift in China’s R&D landscape is already leading to increased R&D capabilities of local players, more competition for innovative programs and larger uncertainties for the regulation of clinical studies of overseas compounds. They are collectively challenging MNC pharmas’ traditional, global-centric R&D models and creating a strong impetus for change. China’s evolving landscape provides an array of alternative collaboration models for MNC pharmas to leverage new and emerging local capabilities.

Fill in the form to read the full article:

9 Reasons to Expand in the UAE and Saudi Arabia

Picture - Local Insight UAE and Saudi Arabia
April 2024

If you are considering expanding your business internationally, the United Arab Emirates (UAE) and Saudi Arabia (KSA) offer plenty of business opportunities.

In this article, ALTIOS’ experts give you the top 9 reasons why you should consider establishing yourself in the United Arab Emirates and Saudi Arabia

A Highly Competitive Economy

The United Arab Emirates stands out for its favorable macroeconomic situation, developed infrastructure, and high-income levels. This competitive economy provides a conducive environment for the growth of businesses.

UAE, the Best Place in the World to Start a Business

According to the Global Entrepreneurship Monitor (GEM), the United Arab Emirates is ranked as the best place in the world to start a new business. This distinction stems from the government’s efforts to promote cutting-edge technology and diversify the economy.

Entrepreneurial Vision

The United Arab Emirates and Saudi Arabia have adopted ambitious visions for entrepreneurship in their respective development plans. Initiatives such as the Projects of the 50 in the UAE and Vision 2030 in Saudi Arabia encourage innovation and economic diversification.

A Gateway to Success

The UAE is a true hub to the Middle East, Africa, Central Asia, and the Indian subcontinent. The country is ranked 21st globally for ease of doing business and offers benefits such as streamlined access to building permits and property registration.

Tax Incentives and Financial Support

The governments of the United Arab Emirates and Saudi Arabia offer attractive tax incentives and financial support to international businesses. Programs such as investment grants, tax exemptions, and development funds encourage the establishment of foreign companies and facilitate their growth in the region.

Security and Stability

The United Arab Emirates and Saudi Arabia offer secure environments, with low crime rates and political stability, ensuring the safety of businesses and international residents.

Embracing Cultural Diversity

Dubai is a cosmopolitan city that welcomes expatriates from around the world. This cultural diversity fosters an open and tolerant environment, conducive to establishing fruitful international relationships.

High Quality of Life

The United Arab Emirates and Saudi Arabia offer a high quality of life, with modern infrastructure, quality healthcare services, internationally renowned education systems, and a range of leisure and entertainment options. The year-round sunny climate adds to the appeal of these destinations, offering a relaxed and enjoyable lifestyle.

Networking and Partnership Opportunities

Trade fairs and regular business events in the region provide companies from around the world with unique opportunities to meet potential business partners, establish contacts, and strengthen their presence in these dynamic markets.

Here are some upcoming business exhibitions in the region:

  • SEAMLESS MIDDLE EAST, United Arab Emirates – May 14-16, 2024: Seamless is an ideal meeting place for innovators in sectors such as payment, fintech, identity, banking, retail, e-commerce, home delivery, and digital marketing.
  • CABSAT, United Arab Emirates – May 21-23, 2024: International exhibition of cable, satellite, audiovisual, and telecommunications.
  • GITEX Technology Week in Dubai, United Arab Emirates – October 2024: One of the world’s largest technology fairs, providing a platform for innovative companies to showcase their products and services.
  • Big 5 Expo in Dubai, United Arab Emirates – November 2024: One of the largest construction fairs in the Middle East, providing a platform for construction industry companies to showcase their products and establish partnerships.
  • Arab Health in Dubai, United Arab Emirates – January 2025: A major event in the healthcare field in the Middle East, offering networking and business opportunities for healthcare professionals and companies in the medical sector.

These exhibitions offer a unique opportunity for companies to connect with potential business partners and discover business opportunities in the region.

ALTIOS Middle East is here to help you make the most of these events and realize your international ambitions.

Want to know more?

For any additional information or to discuss your expansion project in the region, please contact Altios Middle East at the following address:

/ FRANCK PLANCHENAULT
Country Manager UAE

f.planchenault@altios.com
t: +971 58 190 00 75

Amendment to Registered Capital Rules for Subsidiaries in China

08 March 2024

China has recently announced a new amendment to its Company Law. This new regulation is directly impacting foreign companies operating within its borders.

In this article, ALTIOS’ experts answer all your questions about this new regulation.

What is the new amendment to the Company Law in China?

The National People’s Congress (NPC)’s Standing Committee adopted the new Amendment to China’s Company Law (applicable in Mainland China only) on December 23rd, 2023. It will take effect on July 1st, 2024.

This regulation will directly impact foreign companies operating within its borders. All private companies with the status of “Limited Liabilities Companies” (有限公司) will be concerned. The companies that refuse to comply with this new amendment will receive a fine.

How will the amendment affect new entities in China?

Newly established entities in China are required to comply with the new capital requirements within a 5-year timeframe starting from July 1st, 2024. They must pay their full capital during this period.

What about existing companies in China?

Existing companies in China must comply with revised time limitations for the payment of their subscribed capital starting from July 1st, 2024. They need to pay the rest of the subscribed capital within 5 years, with an adjustment period between July 1st, 2024, and June 30, 2027.

Companies already established in China will have to choose between :

  • paying the full capital
  • adjusting the capital amount
  • aligning the registered capital with what has already been delivered
  • closing their companies

Is this a common problem?

Quite common. This is because any changes to business licenses need approval, and the system before meant companies may include room for ambitious expansion. Also, some foreign companies have adjusted their plans since COVID or put plans on hold without revisiting their registered capital. The new regulations mean this is the right time to address these issues.

What is the goal of this regulatory change?

This change aims to enhance transparency and integrity within the corporate sector in China, attract more mature and sustainable projects, and ensure that Directors, supervisors, and management face greater personal liability. This also enhances corporate accountability and governance standards.

How does this amendment reflect on China's international business alignment?

The amendment signifies China’s efforts to align its business environment with international standards and best practices by enhancing transparency through improved information disclosure and ensuring the solvency of companies. This reform protects the rights of companies and creditors and fosters a conducive environment for foreign investment.

How can we help?

Our corporate services team in China can help you smoothly fix these issues or can manage all your accounting and compliance requirements, so you do not need to worry about keeping on top of issues like this.

If you need assistance with the set-up of local entities, restructuring, or the closing of companies, we’ve got you covered. Additionally, we can support you with the relaunch of activities and planning, including studies and business plans.

If you have a dormant subsidiary, we can help you close it, or we can help you consolidate your China business in an effective way to hire and manage the right team to support your suppliers and distributors across Greater China.

We can assist foreign companies already set up in China or planning to expand there in adjusting their capital or re-editing a new business license in China.

ALTIOS Announces Expansion of Operations in Portugal Through a New Subsidiary

Paris, Madrid, Lisbon – February 2024

ALTIOS, a leading global advisory firm specializing in international expansion and cross-border investment for Small and Mid-Cap companies (SMEs), continues to expand its worldwide presence. Building on the successful set up of an office in Spain (Madrid) 8 years ago, ALTIOS Group is strengthening its operations in the Iberian Peninsula by opening a new subsidiary in Portugal.

By 2025, the Portuguese economy is expected to grow by 2.3%. In both 2024 and 2025, the growth should be above the Eurozone average (where estimates point to an increase of 0.8% in 2024 and 1.7% in 2025).

As a consequence of its membership in the European Union, Portugal today has a significant level of Foreign Direct Investment. Portugal today boasts one of the most dynamic entrepreneurial ecosystems in Europe, with many firms bringing new projects to Portugal, thanks to the investments made over the past decade in human resources, infrastructure, and technology, which offer enormous opportunities for those wishing to launch or invest in new businesses.

The country has high levels of productivity growth in both manufacturing and services, particularly tourism. Its telecommunications infrastructure network is also particularly advanced.

In addition to the two main economic hubs – Lisbon and Porto -, the country offers a privileged location between Europe, America, and Africa. It’s a great gateway to Europe, but also to all the world’s Portuguese-speaking countries, including Brazil.

Portugal is also a country with a high quality of life for its residents. It is one of the most peaceful countries in the world and, in terms of business, it doesn’t involve huge costs or over-investment.

With talented people in Spain and Portugal, ALTIOS strengthens its commitment to its customers and partners in the Iberian Peninsula.

Manuel MORENO

“Altios, already present in Spain, has opened a subsidiary in Portugal to support our international customers in their strategy within the Iberian Peninsula. Doing so, ALTIOS completes its footprint in Portugal, serving also companies looking to approach the Brazilian market through Portugal, and the European market from Brazil”, mentions Manuel Moreno, Altios Managing Partner for Spain and Portugal

Patrick_Ferron

“The opening of this subsidiary allows us to introduce you to the country’s great potential and to support better our clients in their own expansion in Portugal, capitalizing on the opportunities for growth offered by this dynamic, solid, mature, and flourishing market. Portuguese companies will also benefit from our international network to grow and scale their business worldwide”, says Patrick Ferron, Co-Founding Partner of Altios.

About ALTIOS: Founded in 1991, ALTIOS is a leading global advisory firm focused on Small and Mid-Cap companies’ international expansion and cross-border investment. We help companies with a unique presence of 750 multi-cultural specialists in 40 global offices spamming the 23 global largest markets.

ALTIOS has been supporting 12,000 ambitious companies, from global growth strategy to international business expansion, incorporation and accounting with everyday compliance administration – HR, payroll, accounting, tax… – to strategic cross-border acquisition and direct investment, acting as an international trusted partner for our clients. We generate new revenue and simplify international operations in the world’s major growing economies.

ALTIOS works with international businesses, investment funds, banks, clusters and government agencies.

Our values: Listening, Team Spirit, Agility, Passion, Entrepreneurship

Contact: www.altios.com, Linkedin.

Press contact: Patrick Ferron, Co-Founding Partner, p.ferron@altios.com / Manuel Moreno, Managing Partner for Spain and Portugal, m.moreno@altios.com

The Fintech Ecosystem in Brazil

Picture - Local Insight : the Fintech Ecosystem in Brazil

February 2024

The Fintech Ecosystem in Brazil is continuously expanding. With the largest financial market in Latin America, the country has became the biggest hub in this region.

In this article, ALTIOS’ experts share how foreign companies can take advantage of the Fintech Ecosystem in Brazil.

The Brazil's Dynamic Ecosystem

Financial transformation is experiencing a global wave of growth, and Latin America is no exception in leveraging these new technologies to improve access to financial services for its population.

Brazil hosts a continuously expanding FinTech ecosystem with over 1500 startups. These startups encompass a wide range of areas, from digital payments to investment platforms and online lending.

In 2023, approximately 1505 fintech companies were registered, almost half being local companies (447 local fintech).

According to the International Monetary Fund, the proliferation of new financial technology and digital banks is associated with a reduction in lending spreads. Fintech companies do not just compete with banks and insurance companies; they also provide banks and insurance companies with new technologies and services. Indeed, the line between traditional financial companies and fintech companies has already begun to blur.

Infographic - Finnovating Analysis Brazil FinTech Landscape 2023

Brazil's Fintech Dominance: Pioneering Regulation and Market Growth

Brazil is the country with the largest number of fintechs in Latin America, representing more than 30% of the region’s total and accounting for 58% of venture capital transactions in Latin America. In addition, the largest digital bank on the continent was born in that country, Nubank, which has a valuation of more than US$50 billion and has already made its debut on the New York Stock Exchange.

Another factor that has driven the growth of the fintech sector in Brazil has been the progress in the regulation, which is characterized by encouraging and facilitating development scenarios for the industry. In 2013, regulation for payment institutions was issued to allow these entities access to the Brazilian payment system, which was only for banks.

Picture - Market Growth Fintech Brazil

In 2018, the Central Bank of Brazil gave the endorsement for fintechs to provide credit without requiring the intermediation of banks. It has also implemented regulations to regulate cybersecurity and crowdfunding activities. Another initiative has been the ‘open banking’ model, which allows the exchange of data between financial institutions.

The main destination countries for Brazilian startups are in Latin America and the Caribbean. According to Finnovista statistics at the end of 2022, the largest share are Mexico, with 22%; Chile, with 14%; and Colombia, with 9%. Outside the region, the country’s fintechs have expanded to the U.S. (11%), Europe (6%) and Asia (3%).

In addition, the high penetration of technology and the internet in Brazilian society has made it possible to exploit financial services through these means, encouraging customer participation and helping financial inclusion.

Fintech Regulatory Framework

Brazil and Mexico are two of the leading countries in the regulation of fintechs in Latin America. Both have taken steps to foster the growth of this industry while protecting consumers and ensuring financial stability.

In Brazil, the Central Bank has created a specific regulatory framework for fintechs with the objective of fostering innovation and growth of the industry, while ensuring compliance with international regulatory standards. The regulatory framework includes the creation of a specific registry for startups in the sector, the supervision of the activities of these companies and the implementation of security measures to protect consumers.

Picture - Regulatory Framework Fintech Brazil

For its part, Mexico’s National Banking and Securities Commission (CNBV) has taken similar steps to regulate fintechs. The CNBV has established a regulatory framework for fintechs that includes the supervision of the activities of these companies, the creation of a specific registry and the implementation of security measures to protect consumers. In addition, Mexico has developed a favorable ecosystem for the growth of fintechs, with a large number of investors and a growing user base.

Ecosystem mapping in the region

The Inter-American Development Bank (IDB) has reported that Latin America’s fintech sector grew by 112% between 2018 and 2021.

According to the IMF, three key factors seem to have fueled the fintech boom in Latin America:

    • limited access to finance from banks and insufficient competition among banks
    • improvements in digital infrastructure
    • access to venture capital.

In this sense, some Latin American fintech sectors have all grown exponentially:

Digital payments grew from $89 billion in 2017 to $215 billion in 2021 and the number of users of digital payment services exceeded 300 million in 2021. Digital banks had more than 30 million users in 2021, mostly concentrated in Brazil and Mexico.

Business-to-business (B2B) fintech startups providing technological solutions to existing financial institutions on average grew annually by almost 50 percent between 2017 and 2021.

Figure: Distribution of Fintech Companies in Latin America and the Caribbean in 2021

Figure: Evolution of the number of Fintech Companies in Latin America and the Caribbean (2018-2021)

Graph - Evolution of the number of Fintech Companies in Latin America and the Caribbean (2018-2021)

What are the Market Trends and Opportunities for 2024?

Growth of Digital Payments

Digital payments will continue to gain ground in Latin America. McKinsey estimates that the value of digital payments in the region will reach $2.5 trillion by 2025. This momentum is attributed to factors such as increased smartphone penetration, continued improvements in telecommunications infrastructure and the growing adoption of contactless payment solutions.

Development of Open Banking

The open banking trend is gaining momentum in Latin America. Open banking allows users to share financial data with authorized third parties, such as Fintech companies, to access new financial products and services. According to the Allied Market Research report, the open banking market is projected to reach $43.152 billion by 2026.

Rise of Cryptocurrencies

Cryptocurrencies are gaining ground in Latin America, with 46% of banked individuals willing to make payments with bitcoin. Experts highlight that cryptoasset companies are evolving into end-to-end financial technology providers, acting as one-stop shops for investors, consumers and other companies.

To sum up, the Brazilian market is considered a benchmark in the region for the Fintech industry. This is mainly due to “the size of the market” in Brazil, where 84% of the adult population in a country of 203 million inhabitants is banked.

It is also due to the fact that few banks control this large market, which generates multiple problems that entrepreneurs are trying to solve. A great example of this is NuBank, a provider of credit cards and banking solutions facilitating their use and reducing complicated bureaucratic aspects. Nubank is already considered the largest digital bank in the world outside of Asia and is the largest Fintech company in Latin America. In late 2021, it launched its IPO and went public on the New York Stock Exchange, becoming the most valuable company in Latin America.

Want to learn more?

If, like NuBank, you want to identify business needs that turn into global success, contact us or book an appointment with one of our experts! We can accompany you in your international growth project.

In addition to this article, read about the aerospace industry in Mexico.

Green Transformation: What European Green Deal means for your Business

Picture - European Green Deal

January 2024

Amidst a global awakening to environmental imperatives, the European Union has launched a major initiative: the European Green Deal. Recognizing the pressing challenges of climate change, biodiversity loss, and resource depletion, the Green Deal stands as a resolute commitment to reshape the trajectory of the European economy.

What is the EU Green Deal?

Since the Paris Agreement, the European Union has been committed to achieving carbon neutrality by 2050 to reduce climate change. The European Green Deal represents a series of measures to guide the European Union towards an ecological transition. Launched in December 2019 by the European Commission, the Pact aims to outline a roadmap (set by the IPCC) to avoid exceeding the 2°C warming limit (compared to the pre-industrial era). Thus, two main axes have been identified:

  • The financing of the environmental transition is supported by robust investment plans. These plans involve investment funds such as Invest EU, operating with a financing structure shared between the public and private sectors, each contributing 50%. To further facilitate private investments, mechanisms such as taxonomy, which includes a carbon tax on New Carbon Forest Agreements (NACF) are implemented. Moreover, the Non-Financial Reporting Directive (NFRD) will progressively be succeeded and replaced by the Corporate Sustainability Reporting Directive (CSRD).
  • The operational transposition of the Green Deal, with the establishment of new policies (agricultural, energy…) or customs procedures. In addition, it plans to end carbon quotas by 2032-2034 and initiate the CBAM (Carbon Border Adjustment Mechanism), incorporating a new carbon tax at the borders for raw materials and semi-finished products that are most polluting and produced abroad.

The European Green Deal’s transformative impact extends beyond environmental protection, offering considerable potential for economic growth, job creation, and technological advancement. The integration of key policies like the Farm to Fork Strategy and the New Action Plan for the Circular Economy underscores the deal’s commitment to creating a more sustainable Europe.

What is the aim of this initiative?

Europe is firmly committed to a circular economy to adopt a sustainable model. Its main objectives by 2030 are to:

  • Tackle Climate Change: Reduce greenhouse gas emissions by at least 55% (compared to 1990 levels) and become the first climate-neutral continent by 2050.
  • Protect the Earth’s resources: Preserve and restore ecosystems and biodiversity
  • Develop a clean and sustainable economy: Mobilize industry and provide clean, affordable, and secure energy (Circular Economy Action Plan)
    • Invest 1 trillion € in clean energy investments
    • Reduce energy consumption by 32%
Picture Circular economy

What impacts on Businesses?

The European Green Deal will introduce stricter social and environmental sustainability requirements for primary and industrial production. SMEs from third countries will need to provide more detailed information on products they export to Europe. Production and export costs may increase in the short term, but it will also enhance competitiveness in a sustainable global market in the long term.

Companies will also be encouraged, or even required, to adopt cleaner sources of energy. This could involve switching to renewable energy, improving operational energy efficiency, and investing in more environmentally friendly technologies.

The CSRD Directive will be a turning point for corporate transparency. Implemented on January 5th, 2023, it aims to :

  • standardize sustainability reporting for companies and enhance the availability and quality of the disclosed data.
  • strengthens the actions of economic actors (develop a CSR policy to reduce negative impacts and anticipate risks for companies)
  • foster more sustainable finance

Consequently, a broader set of companies will now have to comply with mandatory European sustainability reporting standards and provide detailed information regarding their risks, opportunities, and material impacts associated with social, environmental, and governance considerations. They will be responsible for measuring their impact and auditing their first-tier partners in France and abroad.

Infographic - Timeline Green Deal

According to their measured impacts, they may access financing at preferential rates. Thus, financial institutions will no longer fund companies or projects generating excessively negative impacts. Companies already subject to the NFRD will be the first ones to publish their reports (2025) according to these new rules.

Want to learn more?

ALTIOS’ teams can help you succeed in your internationalization strategy: improve your global performance by combining growth and environmental responsibility. Contact us or book an appointment with one of our Experts for more information.