Administrative factors such as the corporate tax rate, the number of tax payments and the cost of personnel lay off have an impact ...
The time and procedures to open or close a business, as well as to get construction permits are criticalfactors for international business success.Number of procedures for opening a businessIn Mexico, an investor needs only 6 procedures in order to open a company. This number is significantlylower than in India, Brazil or China.
Time needed for opening a businessIn Mexico a business can open in 9 days, while in China and Brazil 33 and 119 days are needed,respectively.
Number of procedures needed to obtain construction permitsIn Mexico 10 procedures are required for construction permits, which means that it is easier to obtain themhere than in Czech Republic, India and China where a triple amount of procedures is required.
Time needed to get construction permitsIn Mexico, construction permits are much quicker than in India, Poland, China and Brazil. While in Mexico ittakes 81 days, in China investors need 301 days or 469 days in Brazil.
Years for creditors to recover their creditIn Mexico creditors can recover their credit in 1.8 years, which less time than the one needed in Brazil,Russia, India, Chile and other competitors.
Recovery rateThe recovery rate is recorded as cents on the dollar recouped by creditors through the bankruptcy,insolvency or debt enforcement proceedings.
Additionally, the recovery rate for closing a business in Mexico is 67.3 cents, 37.3 cents more than Chile and51.4 cents more than Brazil.
Mexico offers significant savings in labor force costs compared to other potential investment locations in America, Europe or Asia. Transferring operations from US to Mexico may generate savings in labor force costs.
In Mexico it is represented 12% of Earth’s terrestrial diversity, therefore the country is among the group of those called “megadiverse”.
Wildlife conservation and protection are priorities of Mexico's environment policy. The National Commission for Protected Natural Areas manages 176 federal natural areas which cover more than 25 million acres.
Mexico's ecosystem diversity is significant, allowing to produce a wide variety of agricultural products. The largest areas concentrate on spring-summer harvests.
Irrigation farming is practiced mainly in dry and semi-dry areas with modern technology oriented to single-crop-farming.
Mexico has many natural resources that favor the development of a large number of production activities, including those related to renewable energy generation.
Some of Mexico's strengths in this area are:
Potential to generate wind power estimated at 71,000 megawatts.
Potential to generate hydroelectric power estimated at 53,000 megawatts.
Potential to generate geothermal energy estimated at 40,000 megawatts.
Mexico has a long tradition of mining production which plays an important role in the country's economic activity, mainly in the industrial sector.
Mexico is globally known for its mineral production, particularly silver, copper, bismuth, arsenic, lead and zinc.
Some of Mexico's strengths in this area are:
It is the world's largest silver producer.
It is the world's seventh petroleum producer.
One of the first copper-producing countries throughout the world.
Culture and arts
Mexico is renowed around the world for its cultural richness, both historic and living.Not only does it offer facilities for business development, it also provides a cultural environment that is favorable for investors seeking artistic recreation options.
Mexico is the leader in the Americas, and sixth globally for the number of places declared World Heritage Sites by Unesco.
Mexico is ranked fourth in the world with ten World Heritage Cities (after Italy, Spain and Germany).
More than 45 thousand archaeological sites are registered and legally protected, 183 of them have the infrastructure to receive visitors; those sites represent Mexico's varity of cultures and regions.
Visitors to Mexico can enjoye close to 115,000 historic monuments that were built between the 15th and 19th Centuries.
Mexico is renowned for its intense daily cultural life. Every year, Mexico hosts more than 400 culture festivals and book fairs take place in Mexico, among whic are:
The Guadalajara International Book Fair, one of the most important events of its kind in the Spanish-speaking world and the second globally, in termis of editorial presence, only after the Frankfurt Book Fair in Germany;
Festival Internacional Cervantino: one of the top five in the world;
The Guadalajara and Morelia Film Festivals: which are among the top ten in Latin America.
Mexico’s Auditorio Nacional is ranked as the number one international venue for the performing arts ( Billboard Touring, venues for ten thousand people).
In addition to the Mexican's people proverbial hospitality, beaches and the wide biodiversity of natural settings, Mexico has 54 tourist destinations of such cultural wealth that they have been named “Magical Towns”.
Mexico's pre-Hispanic and modern art collections are outstanding and exhibited in 1,044 museums. in addition the country also has 42 centennian theaters and more than 1,000 popular holidays and celebrations throughout the year, showcasing its wonderful cultural diversity in dance, music, song and expression, particularly its rich and internationally renowed gastronomy.
A country of young people
By the fourth quarter of 2012 Mexico summed a total population of 115.6 million of habitants and an Economically Active Population of 50.7 million people, as INEGI reported.
According to CONAPO’s forecasts, Mexico currently presents a demographic bonus that will last the next two decades
Currently the population in working age represents 64% of the total population. It is estimated that during the next two decades Mexico’s population in working age will be of more than 80 million people and will continue to represent more than 60% of the population.
A country with qualified labor force
In 2012, according to CONACyT’s forecasts, 111.4 thousand engineering and technology students graduated from Mexican institutions. From UNESCO's 2010 data, in Mexico there are 18% more graduates in manufacturing, engineering and construction per capita than in the United States
According to the World Economic Forum (WEF) Global Competitiveness Report 2012-2013, in terms of the Macroeconomic Stability Subindex (which is computed considering six variables: government budget balance, national savings rate, inflation, government debt and credit rating), Mexico is ranked in place 40 out of 144 countries.
In terms of government indebtedness, Mexico's government debt as percentage of GDP is 43.8%, indicating a significant better solvency than countries such as Brazil, India, Germany and the United States.
On the other hand, the monetary policy has allowed inflation to reach levels close to those of our major trading partners. In 2012, consumer inflation stood a 4.0%, according to the International Monetary Found.
Also, our country risk level, which is at a 2.3% rate, is more competitive than that of Brazil, India and Turkey, that is, 2.6%, 3.0% and 3.6% respectively.
Favorable exchange performance
IIn the years to come, Mexico will enjoy a better exchange rate performance in real terms compared to its competitor countries on the world markets, particularly Brazil, Russia, India and China (“BRIC” countries). As an example, next figure presents the future behavior of the exchange rate of Mexico and the BRIC countries against the US dollar, the euro, and the Japanese yen.
Mexico’s expected exchange rate will make products exported from Mexico to markets in the U.S., Europe and Japan relatively cheaper, when compared to those exported from the BRIC economies.
Exchange rate performance opens up new business opportunities in the short and medium terms for firms that seek to increase their profitability and better position their products on the world markets, by considering Mexico as an option for setting up an operational and export base.
A country of business
On international trade, Mexico has been focused on diversifying its markets, for it´s products and services, trough the signing of many trade agreements with European, Asian and American economies. In this way, the country positions itself as an entrance door to a market that represents around 60% of world’s GDP, with over a billion of potential consumers.
Mexico occupies the second position worldwide, according to the number of Free Trade Agreements (FTA) that holds. It has signed 11 Free Trade Agreements and an Economic Partnership Agreement (EPA), gaining preferential access to the markets of 44 countries that include the largest economies of the world, such as the United States, Canada, the 27 members of the European Union and Japan. Mexico also has 6 Economic Complementation Agreements (ECA), as well as three Partial Scope Agreements.
In order to enforce the legal protection of monetary flows for the productive sector, Mexico has 28 Promotion and Reciprocal Protection of Investments Agreements (IPPA) signed with 29 countries. There has also been an effort to avoid equivalent taxation during the same period of time by two or more taxation authorities on the participants of the Mexican market, through the signing of Double Taxation Avoidance Agreements with 45 countries. Therefore, with its international trade strategy, Mexico offers access to diverse markets, tariffs reductions, investment opportunities, legal transparency, intellectual property protection, and just and attractive competition.
Number of export procedures
To export from Mexico, only 5 procedural documents are needed. This gives Mexico an advantage over countries like Brazil, China and India where more documents are required.
Number of import procedures
Likewise, only 4 import procedures are needed, ranking Mexico in a better position than USA, China Brazil and India.
Administrative factors such as the corporate tax rate, the number of tax payments and the cost of personnel lay off have an impact in a company’s operational costs and profit. Mexico presents relevant advantages in these factors which translate into a business’s bottom line.
Corporate Tax Rate
In fiscal matters, Mexico has significant savings compared with Brazil, India and the Unites States. Companies with productive activities in the US could benefit with a 11.2% tax rate reduction by transferring operations to Mexico.
Number of tax payments
Additionally, Mexico requires only 6 tax payments per year, ranking above countries such as Brazil, Germany, Poland and India.
Mexico is located in between the main global consumer markets. It shares a border with the United States of more than 3,000 km; has quick access to the European market through the Atlantic Ocean and to the Asian market through the Pacific Ocean.