7 reasons to invest in Mexico

Mexico is a place that offers significant advantages for companies that are looking for a country to expand and/or to establish a base of operations. Here you can find 7 concise reasons to invest in this country:

1. Affordable workforce   

The average compensation cost in manufacturing per employee is 6.4 dollars/hour. With this amount, the cost in Mexico is lower than in Taiwan, Brazil, Argentina and Korea. 

2. Qualified labor force

According to UNESCO’s data, there are 18% more graduates in manufacturing, engineering and construction per capita than in the USA. Besides, in 2012 there were 102 students graduated in engineering from Mexican institutions. 

3. Young population

The population in working age is 64% of the total population, which represents around 70 million people. It is estimated that it will continue over 60% for the next two decades. 

4. Tax incentives

Many state governments are pursuing foreign investment through state tax incentives. The states with more incentives are Hidalgo, San Luis Potosí, Querétaro and Coahuila.

5. Industry clusters

These are the main industry clusters by region:

•       Aerospace:

o   North: Baja California, Nuevo Leon, Sonora and Chihuahua

o   Queretaro

•       Automotive:

o   North: Baja California, Chihuahua, Sonora, Coahuila, Nuevo Leon

o   Center: Aguascalientes, Jalisco, Guanajuato, San Luis Potosi, Mexico state, Morelos, Puebla, Hidalgo and Queretaro

•       Pharmaceutical:

o   Center: DF, Jalisco, Mexico state, Puebla

•       Processed foods: 

o   Center: Mexico state, Jalisco, DF, Puebla and Veracruz

•       Household appliances:

o   North: Baja California, Chihuahua, Coahuila, Nuevo Leon, Sonora and Tamaulipas

o   Center: Mexico state and Queretaro

•       Electronics:

o   North: Baja California, Chihuahua, Coahuila, Nuevo Leon, Sonora and Tamaulipas

o   Center: Jalisco and Mexico state

6. Infrastructure

Mexico has road and railroad networks that communicate the interior of the country, the sea ports on the Pacific and Atlantic ocean, and the north/south borders making connections between the USA, Guatemala and Belize. There are:

•       54 crossings in the USA-Mexico border

•       76 airports

•       117 sea ports

•       27 thousand km of railroads

•       133 thousand km of roads

7. Export of finished goods

Mexico is an ideal place for the transformation of raw materials and export of finished goods. The 2 main reasons are:

•       Mexico has many natural resources. The ecosystem diversity allows to produce a wide variety of agricultural products, it has the potential to generate great energy (including electric, wind, hydroelectric and geothermal) and the country is known for its mineral production (specially silver -2º largest producer in the world- , copper, bismuth, arsenic, lead and zinc).

•       In case the investor wants to import raw materials from other countries but to use the geographical connections of Mexico and its cheap and qualified labor force, the government promotes the export of its finished goods: There are programs that allow the temporary import of goods (including machinery, tools and raw materials) with no customs duty nor VAT that will be exported at the end as finished goods. They also provide a preferential tax treatment. 

Thank you for reading, you are also welcome to visit our web page www.profectus.mx