Latin America has an old tradition of entomophagy and is currently the second largest market for edible insects in the world. However, the number of start-ups producing edible insects is still very low, when compared to Europe and North America. This review analyses the potential of farming and processing edible insects in Latin America using the systemic competitiveness approach in order to list the main opportunities and challenges for the development of the sector in the region. First, the meta level appears diffuse since there are no clear regional or national strategies towards the development of an insect-based food industry, and despite the tradition of entomophagy, the majority of the urbanised population have a bias against insects. However, there is a huge potential related to reviving the traditional knowledge. The macro level is characterised by a lack of local and international regulation on food safety, production and commercialisation, but there is an opportunity related to the reformed Novel Food Regulation (Regulation (EU) No. 2015/2283) that may ease the exports to the European market. In the meso level, although investment and funding of insect-based start-ups are increasing internationally, a lack of research and training institutions is noticeable in the region. Finally, the main constraints identified in the micro level are the high prices of edible insects due to an existing disrupted supply chain and the lack of technology to mass produce insects, while the main opportunity is to develop innovative products based on the traditionally-known organoleptic and functional properties of insects. Indisputably, more efforts must be done in Latin America to take a leadership in the world, boosting the local framework for producing edible insects and promoting entopreneurship. These efforts should be coordinated among all stakeholders involved in the different systemic levels: entrepreneurs, research institutions, government and the society.