Near-Shoring Isn’t a Trend—It’s a Reset. And LATAM is at the Center
Over the past several years, a quiet but consequential shift has been taking place in U.S. foreign direct investment strategy. Companies that once defaulted to far-flung global production and engineering models are increasingly re-anchoring parts of their operations closer to home. And while “re-shoring” has taken up most of the oxygen under the Trump administration, it’s related sibling—near-shoring—has moved well beyond basic services and labor arbitrage. Today, it is reshaping where U.S. firms place advanced manufacturing, semiconductor-adjacent operations, and high-value software and engineering talent. Latin America, particularly Costa Rica, the Dominican Republic, and Colombia, is emerging as a central part of that recalibration.
What is driving this shift is not a single factor, but a convergence of structural pressures. Supply chain fragility exposed during the pandemic permanently altered executive and boardroom thinking around risk. Long transit times, single-region dependency, and limited visibility into upstream suppliers proved costly, especially for sectors such as electronics, medical devices, and industrial manufacturing. At the same time, geopolitical uncertainty has become a persistent operational variable rather than a background concern. Export controls, trade restrictions, sanctions regimes, and regional instability are now routinely incorporated into site-selection and capital-allocation decisions. For many companies, the objective is no longer to find the lowest-cost location globally, but to design resilient, flexible operating footprints that can absorb shocks without interrupting production or delivery (see our previous blog post on this point).
Southbound and Down
Latin America’s role in this shift is also being shaped by a more subtle evolution: the region’s value proposition has moved decisively up the stack. The most competitive near-shore markets are no longer competing solely on cost. They are winning investment because they combine skilled technical talent, improving institutional capacity, and operating environments that align closely with U.S. business practices and time zones. In this context, near-shoring is less about retreating from globalization and more about building redundancy and optionality within it.
Costa Rica offers a clear example of how this evolution plays out in practice. The country has spent decades cultivating a reputation for precision manufacturing and highly regulated production, most visibly in the medical device sector. That same foundation has made Costa Rica attractive for semiconductor-adjacent activities and complex engineering functions. Intel’s long presence in the country is often cited, but the more instructive lesson lies in how that footprint has adapted over time. While certain high-volume assembly and test operations have been consolidated into larger global hubs, Costa Rica continues to play a critical role in engineering, services, and corporate functions. For many U.S. firms, this reinforces a broader pattern: even when manufacturing steps shift globally, near-shore locations like Costa Rica remain highly competitive for the technical and operational capabilities that support distributed production networks.
The Dominican Republic illustrates a different but complementary dimension of the near-shoring trend. Through its free zone system, the country has become a significant exporter of advanced manufactured goods to the United States, particularly in medical devices and related equipment. What stands out is not only cost competitiveness, but scale and execution. The Dominican Republic has demonstrated an ability to support large, export-oriented manufacturing operations that meet U.S. regulatory and quality requirements while maintaining logistical proximity to the U.S. market. For companies seeking to shorten supply chains without sacrificing volume or reliability, the country increasingly represents a practical and proven near-shore option.
Colombia’s role in the near-shoring landscape is more closely tied to talent and services, particularly software engineering and digital delivery. As U.S. companies expand cloud infrastructure, data platforms, and AI-enabled products, they are rethinking how and where engineering teams are built. Colombia has benefited from this shift by offering a large, growing pool of technical talent that can work in real time with U.S. teams. The appeal is not limited to cost savings. Time-zone alignment, cultural compatibility, and an expanding services export ecosystem allow companies to integrate Colombian teams directly into product development cycles rather than treating them as outsourced support functions. For many firms, this represents a move toward distributed engineering models that emphasize continuity and ownership rather than transactional outsourcing.
Importantly, near-shoring to Latin America does not signal a wholesale exit from Asia or other global manufacturing centers. Instead, companies are increasingly adopting portfolio approaches to operations. They maintain critical global capabilities where replication would be slow or costly, while simultaneously building near-shore capacity to reduce concentration risk, improve responsiveness, and enhance resilience. The goal is not replacement, but balance.
Proximity Is Table Stakes—Capability Wins
For U.S. companies, this shift has meaningful implications for site selection and long-term strategy. Advanced manufacturing investments are gravitating toward locations that can deliver quality, compliance, and speed to market. Engineering and digital operations are being placed where talent depth and collaboration matter as much as labor economics. Geopolitics, once treated as an externality, is now a design constraint that can be mitigated through geographic diversification.
For Latin American countries and investment promotion agencies, the opportunity is equally clear. Competing for near-shored investment increasingly means competing on capability rather than incentives alone. Workforce development, supplier ecosystems, regulatory clarity, and infrastructure readiness are becoming decisive factors in where companies place their next phase of growth.
From G3 Partners’ perspective, near-shoring in Latin America is not a temporary response to recent disruptions. It reflects a deeper rethinking of how U.S. companies build durable, future-proof operating models. The regions that succeed will be those that offer not just lower costs, but higher confidence—confidence in talent, in execution, and in long-term strategic alignment.