Thinking of doing business in Mexico?

multi-level-marketing-opportunitiesWith its growing GDP, a higher level of foreign direct investment than any other Latin country, and a current political climate that is more pluralistic and open to investment than any other of the last seven decades, investing in Mexico today offers high rewards with limited risk. Mexico is the 14th largest economy in the world and second in Latin America. By 2050, Goldman Sachs has tipped Mexico to become the 5th largest economy in the world, above countries like the UK.

 

Mexico is a member of the NAFTA with Canada and the US, and became the first Latin American member of the OECD in 1994. Investments by automotive manufacturing companies like Nissan are expected to accelerate the pace of economic development and generate even more job opportunities. After the implementation of the NAFTA, Mexico’s trade with the US and Canada has almost tripled. The country has around 44 free trade agreements in place with several different countries. More than 90% of Mexico’s trade falls under free trade agreements: these have substantially liberalized the country’s trade regime. In September 2012, the country joined the Trans-Pacific Partnership (TPP), a free trade agreement that is being negotiated between the United States, Australia, Canada, Japan, Chile, Brunei, New Zealand, Malaysia, Peru, Vietnam and Singapore. The agreement, when completed, will open up a lot of new markets for Mexico and will reduce its dependence on the US. Post-NAFTA Mexico boasts an incredibly flexible economic environment. In 16 years foreign investment has almost doubled, from $5–6 billion to $10–12 billion a year. In 2001, inflation in Mexico fell to a 30-year low, and the flow of foreign capital into the Mexican stock market rose more than 6%, helping make it the seventh best performing stock market on the planet.

 

In Doing Business 2013, Mexico was ranked 36th out of 185 countries, a jump of 38 places from its 2012 ranking of 74. The number of days required to start a business in Mexico is only nine, compared to the Latin America and Caribbean average of 53 days. Cost (percentage of income per capita) for starting a business is only 10.1, well below the Latin America and Caribbean average of 33.7. Further, the government removed the minimum capital requirement for limited liability companies, making it easier to start a business. According to Alix Partners, Mexico is the country with the lowest total manufacturing costs among emerging economies and approximately 25% lower than the US. These measures will make it easier for budding entrepreneurs to start their own enterprises.

 

Exports and imports

Mexico is the 15th largest exporter in the world; it exports more than the rest of Latin America combined, accounting for more than 40% of the total trade of the region. They are also the United States’ second largest export market, making about 12.21 percent of U.S. total exports in 2009. Mexico shipped US$380.1 billion worth of products around the globe in 2013. That figure represents about 2.1% of worldwide exports estimated at $18.1 trillion.The key export partner of Mexico in 2012 was the US (78%), according to CIA – The World Factbook. The major importing partners in 2012 were the US (50.5%) and China (15.5%) and Japan (4.8%).

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