Despite recent economic and political uncertainty, U.S. investment in Mexico and Latin America continues to accelerate. In 2025, Brazil saw $82 billion in foreign direct investment from U.S. companies alone. Mexico recorded over $40 billion in foreign direct investment during 2025 from U.S. companies, up 10% from 2024. This year, just in January and February, U.S. companies have announced total investments of $5.839 billion in Mexico. Colombia and Chile remain strong favorites for the U.S. to keep investing in their respective mining and energy industries.
Despite this growing trend, U.S. companies expanding into Mexico and Latin America often face regulatory shock when they encounter data protection frameworks that mirror Europe’s “omnibus” regime rather than the American “patchwork” model. Companies often assume that B2B transactions carry lower regulatory risk, only to discover that Latin American data protection laws apply regardless of whether the transaction involves consumers. In reality, these frameworks apply standardized data protections universally, regardless of the industry or context. This means that individuals—whether they are employees, volunteers, or suppliers—possess robust, enforceable rights that can quickly disrupt negotiations or delay transactions.
These differences reflect two distinct legal philosophies: in the United States, regulators typically treat data protection as a consumer-protection issue, while Mexico and the rest of Latin America treat data protection as a fundamental right, which justifies broader regulatory oversight of private actors. Understanding and addressing these differences early on in cross-border transactions can help companies avoid compliance surprises while building trust with customers, employees, and partners in the region.
What to Expect (Generally)
Compliance personnel often encounter several hoops through which they have to jump in Mexico and Latin America in order for their deals to run smoothly in the region without subjecting them to liability under data protection laws. Generally, five hurdles stand out to those new to the region:
First, common U.S. practices in marketing and information monetization often qualify as regulated data processing that can trigger violations of stricter consent and legal basis rules. Omnibus data protection statutes in Latin America have some of the broadest scopes of applicability, extending liability to U.S. based entities. Brazil’s omnibus data protection statute applies to processing carried out in Brazil, processing involving individuals located in Brazil, and processing intended to offer goods or services in Brazil.
Second, jurisdictions in the region make it (by design) much easier for a complaint to be filed against violations of data protection rights. These complaints can be filed both in court and before the administrative agencies in charge of enforcing data protection statutes. Colombia’s omnibus data protection statute grants the regulatory government agency in charge of its enforcement the authority to hear complaints for data protection violations and prosecute the alleged violators, regardless of whether the complainant is a consumer, or any other specific type of data subject.
Third, private causes of action in data protection are far more common than in the United States. Mexico’s omnibus data protection statute allows affected data subjects to choose between an administrative complaint (before the government agency in charge of enforcing data protection laws) or a judicial cause of action (for general civil liability). The only requirement for data subjects to move forward with a complaint is to show they have been affected by an alleged breach of the data protection statute.
Fourth, liability does not stop at the entity in charge of processing, it can extend to individuals in the region. Mexico’s omnibus data protection statute goes as far as to impose criminal liability for purely data-processing actions, with penalties up to 5 years in prison. Without realizing it, a U.S. entity operating in Mexico through a domestic subsidiary could be exposing local executives, compliance personnel, or data processors to individual liability.
Fifth, failing to comply can have a high cost to the company and violations can have consequences beyond mere monetary sanctions. U.S. entities that are new to the region should not make the mistake of assuming they can “afford” to be fined just because of the relatively small fines by comparison to the fines that can be seen in the United States. Accepting a fine by paying it (however small it may be) is also an acknowledgement of failure to comply with a statute. When this occurs, repeat violations from the same entity will render it a recidivist and can lead to automatic closure of a point-of-sale or an order to cease data processing activities.
The point of this is not to fear monger, it is a call for proactive compliance actions ahead of incurring into the region. U.S. entities should not be discouraged by the extensive regulatory landscape, they should see it as an opportunity and embrace it as a guideline to ensure a friendly relationship with regulators.
Avoid Breaking the Law
Most of the hurdles U.S. companies run into while venturing into Mexico and Latin America can be addressed by consulting local counsel or a privacy professional. The most common measures companies should adopt prior to closing transactions in this region include:
Identifying all data subjects involved, do not make the mistake of assuming you are not subject to data protection laws just because your transaction does not involve consumers;
•Mapping your data, failure to identify all data storage and transfer points is very frowned upon by regulators;
•Harmonizing privacy policies, especially if a transaction involves permanent business in the region; and
•Prioritizing consent-gathering, almost all individual complaints are based on processing without or beyond given consent.
As cross-border data flows drive global commerce, understanding the legal frameworks governing personal information is now an essential component of cross-border business strategizing. Consulting specialized counsel and privacy professionals prior to stepping on the gas pedal will save entities countless hours in the future addressing foreseeable problems. Cross-border data protection is not an area where companies can afford to “handle issues as they arise.” By the time problems surface, regulators are often already involved.