Miami is increasingly becoming an important hub for Asia business. The city’s enduring status as the “capital of Latin America” is perhaps the main driver of this trend, but ties to other parts of the world also play an important role, as does Miami’s (and all of Florida’s) own attractiveness as a business destination.
The reasons why Miami and Florida are and will continue to be key locations for Asia business were discussed in a recent event jointly organized by the Florida Bar and Law Society of Hong Kong (LSHK) that I attended. Foremost among these is the fact that Miami is Latin America’s most important business center.
Folks who have never visited Miami perhaps wonder how the city can hold this distinction without even being in Latin America. Paradoxically, it is Miami’s location in the United States and outside Latin America that accounts for much of its success as a regional hub.
The United States has long been an attractive destination for Latin American capital, for several reasons. U.S. markets are largely open to everyone, regardless of citizenship or residence status. For nonresidents, the U.S. tax regime is very favorable. Corporate entities are easy to form, even for noncitizens. Overall, the country is a relatively safe harbor for investment.
As for Miami, it just happens to be the most accessible part of the country for Latin Americans, in just about every way. Want to buy an investment property but need Spanish- or Portuguese-speaking real estate agents, bankers, and lawyers? Miami has you covered. Sure, there are professionals who speak these languages in other American cities as well, such as New York and Los Angeles. But can you go into any bank in downtown LA or Manhattan and get service in Spanish? How many of the bankers who do speak Spanish in these cities have experience handling large transactions or working with HNWIs? How many of the Spanish-speaking lawyers have experience working on cross-border matters? Take it from a native Spanish speaker: There is no other major city in the United States where you can go and pretty much speak Spanish all day, irrespective of the business at hand.
At the same time, Miami offers neutral ground for Latin Americans, and for non-Americans doing business with Latin Americans. This gives the city outsized importance when it comes to cross-border disputes. If a dispute arises between, say, a Mexican company and their Argentinean counterparty, they may prefer to settle their differences in Miami, rather than in either one of their own countries. This is not just a matter of avoiding possible biases in a Mexican or Argentinean court. Both the Mexican and Argentinean companies are likelier to be more familiar with Miami than with, respectively, Buenos Aires and Mexico City. All things being equal, it will be easier for them to find local counsel with an understanding of both Mexican and Argentinean law (assuming that’s necessary) in Miami than in either Buenos Aires or Mexico City.
These dynamics will be relevant to Asian companies doing business with Latin America. All considered, Miami might be the best place for, say, a Chinese company to arbitrate a dispute with a Chilean one. The Chinese company is less likely to be familiar with Miami than the Chilean one, but in most cases will be better placed to navigate the waters in the United States than those in Chile or indeed any other Latam venue.
Beyond dispute settlement, Miami also makes sense as a base of operations for Asian companies looking to establish or expand multinational operations in Central and South America, and the Caribbean. Many of the factors that have made the United States an attractive destination for Latam money also make it an attractive place to establish a business, especially given the volatilities that continue to exist in parts of Latin America. Miami in particular is a great place to set up a Latam HQ, with all of the necessary in-house and outside talent to make it work, not to mention direct air links to every major city in the region.
Latam is not Miami’s only game. Florida is also an attractive investment destination for Europeans. In fact, European investment has created far more Florida jobs than Latam investment. As such, the Sunshine State is well poised to serve as connection point between Asian and European companies. From a legal standpoint, Florida could be a logical middle ground for these companies to arbitrate disputes, or to establish joint ventures with a view to entering the U.S. and/or Latam markets.
Finally, there is the appeal of Florida as a market. There was a time when the state was somewhat of a terra incognita in Asia, but no more. As someone who spends a lot of time in Florida, I can vouch for the fact that an increasing number of Asians are discovering its relative merits as a place to live. They like the relatively low taxes, they like the relatively low regulatory burden, and they like the weather. For Asian companies, these are draws as well.
Add to that this fact that Florida’s economy is the fourth-largest in the United States, growing faster than third-placed New York. As one of the presenters in the joint Florida Bar/LSHK event noted, Florida’s GDP is already comparable to that of Argentina, Turkey and Switzerland. Moreover, for companies looking at the United States in its entirety, Miami is an ideal platform from which to target the U.S.’s massive Hispanic market. Oh, and did we mention that Miami is one of the world’s leading Web3 hubs?
Given everything that is happening, it is reasonable to expect that in the coming decades Miami and Florida will present market opportunities for everyone. Asian companies will be no exception.
Of course, it will not hurt that Florida can be a pretty nice place to visit, at least if you enjoy beaches, warm weather, and/or theme parks!