From Chileans filling up at the pump to Brazilians heading out for a Subway grilled chicken and avocado sandwich, Latin Americans are increasingly feeling the pull of Gulf capital.

What was once a distant and largely overlooked relationship is beginning to take on shape and substance. Gulf investors—long focused on North America, Europe and Asia—are now looking south and west, drawn by Latin America’s natural resources, expanding consumer base and urgent need for long-term capital. For countries clustered around the Persian Gulf, flush with cash after decades of oil and gas exports, the region is starting to look less like an exotic outpost and more like an underexplored frontier.

The financial firepower behind this shift is formidable. More than half a century of pumping hydrocarbons at some of the lowest extraction costs in the world has left Gulf nations among the wealthiest on earth. The main sovereign wealth funds of Abu Dhabi, Kuwait and Saudi Arabia each control close to $1 trillion in assets, while those of Qatar and Dubai manage roughly half that amount. Collectively, Gulf state investors account for a significant share of global sovereign capital and rank among the most influential allocators in international markets.

These funds are not passive custodians of surplus wealth. Saudi Arabia’s Public Investment Fund (PIF), Qatar’s Qatar Investment Authority (QIA) and Abu Dhabi’s constellation of sovereign investors—including the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company and ADQ—sit at the heart of their countries’ long-term economic strategies. Originally created to recycle hydrocarbon surpluses into diversified portfolios, they have evolved into active investment arms tasked with reshaping domestic economies while generating sustainable global returns.

A new generation of Western-educated leaders—including Saudi Crown Prince Mohammed bin Salman and UAE Prime Minister Sheikh Mohammed bin Rashid Al Maktoum—has accelerated this push. Faced with climate change, the global energy transition and the long-term prospect of declining fossil-fuel demand, Gulf governments are moving faster to deploy capital overseas, targeting assets that promise both financial resilience and strategic relevance.

According to UNCTAD data, foreign direct investment outflows from the six Gulf Cooperation Council (GCC) countries—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE—reached $276 billion between 2020 and 2024, more than 50% higher than during the previous five-year period. Historically, most of that capital flowed to developed markets, where scale, liquidity and transparency were easier to find. But as valuations have risen in those markets and competition for assets has intensified, Gulf investors have begun to look elsewhere. Latin America and the Caribbean are increasingly part of that recalibration.

A New Direction for Gulf Capital

Until little more than a decade ago, Arab capital was largely absent from Latin America. That is changing at a time when the region is struggling with weak growth, tighter global financial conditions and rising geopolitical friction between the United States and China.

Latin America offers a compelling mix of attributes that align closely with Gulf priorities. It is rich in agricultural land and freshwater at a time when food security is an existential concern for arid Gulf states. It holds vast reserves of copper, lithium and iron ore, all essential for the global energy transition. And it boasts some of the world’s best conditions for renewable energy, from wind corridors in Brazil and Argentina to solar potential in Mexico and Chile.

Unlike advanced economies, Latin America still offers organic growth. Unlike parts of Africa or the Middle East, it is largely free from armed conflict. And unlike Asia, it remains less crowded by global capital.

Yet the relationship remains at an early stage. A report by the Dubai Chamber of Commerce found that Gulf countries invested just $4 billion in Latin America between 2016 and 2021—barely 2% of their total outward investment over that period. That modest figure underscores both how late the Gulf has arrived in the region and how much room there is for expansion.

Trade has moved faster than capital. Brazil has become a major supplier of halal beef, poultry, grains and sugar to the Middle East, while Gulf exporters ship fertilizers, refined fuels and petrochemicals to Latin America. Two-way commerce has grown steadily but remains small relative to the size of the two regions, suggesting that deeper investment ties could still unlock significant gains.

Distance once posed a formidable barrier. Before Emirates launched direct flights from Dubai to São Paulo in 2007, the journey could take more than a day. Aviation links have since improved markedly. Alongside Emirates, Qatar Airways has become a key bridge, operating one of the world’s largest long-haul networks and facilitating passenger and cargo flows between Latin America, North America and the Middle East. Even without extensive direct Doha–South America services, improved connectivity has reduced the friction that once kept Gulf investors at arm’s length.

Scale has also been a challenge, particularly for smaller economies.

“We made some early approaches, but back then the big Gulf funds were looking for acquisitions too big for our economy,” says Karla Flores, director of Chile’s investment promotion agency, InvestChile. One unnamed investor even floated a valuation for Chile’s state-owned copper giant Codelco—emphatically not for sale.

Brazil: The First Test Case

Brazil’s President Luiz Inácio Lula da Silva was among the first Latin American leaders to recognize the Gulf’s potential, visiting the UAE in 2003.

“His visit was a game changer,” says Mohamad Orra Mourad, secretary-general of the Arab-Brazilian Chamber of Commerce in São Paulo.

Since then, trade between Brazil and the Middle East has expanded sharply, rising from about $3 billion to a record $24 billion in 2024, driven largely by beef, grains and iron ore. Investment followed, particularly in agriculture and energy—but early forays were not without setbacks.

In 2012, Abu Dhabi’s Mubadala paid $2 billion for a 5.6% stake in EBX Group, the natural-resources conglomerate controlled by Brazilian entrepreneur Eike Batista. EBX collapsed months later after disappointing oil and gas drilling results, serving as a cautionary tale about governance, execution and commodity-cycle timing. Elsewhere, Gulf investors were sidelined as governments tightened rules on foreign ownership of agricultural land.

Those disappointments did not deter Gulf capital. Instead, they prompted a shift in approach.

Sovereign Wealth, Strategic Capital

Mubadala, once seen primarily as a domestic development vehicle within Abu Dhabi’s state ecosystem, has evolved into a global investment firm with a diversified portfolio spanning energy, infrastructure, logistics, healthcare and consumer assets. In Brazil, it has built a platform controlling roughly $6 billion in assets, including ports, renewable energy projects, logistics hubs and retail operations. The fund has recycled capital out of legacy mining assets inherited from EBX and redeployed it into biofuels, transport infrastructure and consumer-facing businesses that benefit from Brazil’s scale.

Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, is far less visible but no less influential. With a traditionally conservative profile, it has increased exposure to global infrastructure, transport and data assets over the past decade. While its Latin American footprint remains discreet, its playbook—long-term stakes in essential services—mirrors the type of assets increasingly being assessed by Gulf investors across the region.

Saudi Arabia’s Public Investment Fund is following a similarly strategic path. As a central pillar of Vision 2030, PIF has been tasked with reducing the kingdom’s dependence on oil while generating long-term returns. In Latin America, that mandate has translated into a growing focus on energy-transition projects, infrastructure and food-security value chains.

Brazil’s energy minister has said Saudi Arabia plans to invest $15 billion in the country over the next decade, targeting renewables, green hydrogen and transport infrastructure. Saudi oil giant Aramco, meanwhile, has moved downstream, acquiring fuel-retailing assets in Chile as part of a broader push into consumer energy markets.

“The appetite to invest here in South America is huge,” says Nijad Soufane, chairman of the newly created Chile-Gulf Council Chamber of Commerce.

Qatar’s Strategic Foothold

Qatar’s presence in Latin America is smaller but increasingly deliberate. In 2024, QatarEnergy acquired a 20% working interest in Chevron-operated offshore Block 5 in Suriname, marking one of Doha’s most concrete direct investments in the region’s energy sector. The company has also signed production-sharing contracts for adjacent offshore acreage and participates in ultra-deepwater exploration in Brazil’s Campos Basin alongside Petrobras and other international partners.

These moves reflect a conscious effort by Qatar to extend its upstream footprint beyond its own gas-rich waters. While the country remains the world’s leading exporter of liquefied natural gas, diversification has become a policy imperative.

Behind these investments sits the Qatar Investment Authority, which manages more than $550 billion globally. While much of QIA’s portfolio remains concentrated in North America and Europe, targeted exposure to energy and infrastructure in Latin America gives Qatar a foothold in supply chains that extend well beyond its LNG-dominated economy.

Beyond Sovereign Capital

Gulf engagement in Latin America is no longer confined to sovereign wealth funds and state-owned companies. Private capital from the GCC—including family offices, conglomerates and private equity platforms—is increasingly following a similar path, albeit with greater speed and flexibility.

Much of this private money flows through co-investments with regional and global private equity funds, minority stakes in mid-market companies and direct partnerships with local operators. Gulf family offices and private investors are targeting logistics platforms, agribusiness processors, consumer brands and fintech companies that benefit from rising incomes and export-oriented growth. These investments often sit below the radar but play a critical role in embedding Gulf capital into local economies.

Private investors from the Gulf are also emerging as limited partners in Latin American private equity and infrastructure funds, attracted by opportunities to deploy capital alongside experienced managers while retaining the option to co-invest directly. For many, Latin America offers a combination of scale, yield and growth that has become harder to find in more crowded developed markets.

Laying the Groundwork

Commercial investment is being complemented by Gulf-backed development finance. The Islamic Development Bank, whose largest shareholder is Saudi Arabia, has stepped up engagement in Guyana and Suriname, including a joint initiative with the Inter-American Development Bank Group to mobilize up to $1 billion in co-financing for infrastructure, energy, health and climate-resilience projects.

Qatar is pursuing a similar, if more modest, approach through the Qatar Fund for Development. In Suriname, the fund has financed projects in healthcare, education and social infrastructure, while in Guyana it has supported capacity-building initiatives aligned with the country’s rapid transformation following major offshore oil discoveries.

Taken together, these initiatives point to a sequencing strategy increasingly visible across the region: development finance strengthens institutions and social infrastructure first, smoothing the path for sovereign wealth funds, private investors and state-owned companies to follow—particularly in new energy producers such as Guyana and Suriname, where oil revenues are reshaping economic priorities almost overnight.

A Window of Opportunity

The growing attention from Gulf investors comes at a delicate moment for Latin America and the Caribbean. Still financially constrained after the pandemic and exposed to global trade and security shocks, governments are searching for ways to lift living standards after another lost decade of growth.

“Latin America needs infrastructure, and the Gulf is a partner which can provide that,” argues Joel Foyth, an analyst and professor at Argentina’s National University of Rosario.

That does not mean only megadeals. In Argentina’s Santa Fe province, the Kuwait Fund for Arab Economic Development provided $50 million for a project to pump water from the Paraná River to Córdoba.

Unlike European or North American investors, Gulf capital—whether sovereign or private—tends to be patient, relationship-driven and comfortable with long time horizons.

“In general, they are not operators; they want to invest in existing businesses that need capital to grow,” says Jorge Daccarett, a former Chilean ambassador to Qatar, Saudi Arabia and the UAE.

Capital flows are deepening political ties. In 2023, a Saudi delegation led by the investment minister toured seven Latin American countries. In July, the UAE’s Anwar Gargash Diplomatic Academy held its first overseas forum in Rio de Janeiro to discuss closer links between the regions.

“Before we were going to them. Now they’re coming to us, and we’ve got to seize this opportunity,” says Foyth.

While Gulf investors see opportunity, Latin American governments must learn how to engage partners who value relationships over rapid dealmaking.

“These guys are not risk-takers. They want strong and true partners,” says Daniel Melhem, founder and managing partner of London-based merchant bank Knightsbridge Partners.

In Chile, lawmakers have approved a free-trade agreement with the UAE that includes an investment chapter. While it largely reaffirms protections already afforded to foreign investors, symbolism matters, says InvestChile’s Flores.

With state-controlled funds dominating investment flows, personal ties between leaders remain critical. “If the leaders of these countries don’t meet, if they don’t sit down to eat chicken, lamb and rice with their hands, they’re not going to do any business,” argues Melhem.

While cultural differences can complicate engagement, large Arab diasporas in Brazil, Chile and Colombia could also help bridge the gap, says Mourad in São Paulo.

With competition for Gulf capital intensifying—from Asia to Africa to the United States—Latin America and the Caribbean will need to leverage every advantage they have, from food security and energy-transition assets to political stability and scale.

“We are competing with the whole world,” says InvestChile’s Flores.