Linking Business to the Spanish Community
Why Mexico

  
Why Mexico
It’s time to invest in Mexico.  Our territory enjoys a strategic geographical position, great natural wealth and the advantage of being a country primarily of young people. This, together with the plurality of its industrial sectors, sound international trade relations, economic and financial stability, as well as a notable political maturity, consolidates it as one of the best destinations for international investment.

Mexico is the country with the lowest costs for the manufacture of industrial components among the main emerging economies (Brazil, China and India) thanks to the fact that it possesses an attractive exchange rate against the dollar, relatively low transportation costs and a large number of Free Trade Agreements. Furthermore, Mexico rose 4 competitiveness points in the World Competitiveness Scoreboard, in which it went from 50th to 46th place, surpassing countries such as Turkey, Italy and Russia.

Doing business in Mexico is all about:
  • Economic stability and a legal framework providing security and protection for investment
  • Skilled and competitive professionals
  • Strategic location and modern, efficient infrastructure
  • “Just in time” access to the North American and Latin American markets
  • Preferential access to the most important markets worldwide, granted through one of the largest networks of commercial and free trade agreements
Geographic Location
A large expanse of fertile ground for doing business. Mexico has a territorial area of almost 2 million km2 which, together with the expanse of sea over which it has special rights for exploration and development of resources (known as the Exclusive Economic Zone), constitutes a total area of more than 5 million km2, which places it as one of the countries with the greatest territorial extension in the world. In addition, Mexico has 11,000 kilometers of coastline, connecting it to the west with Asia and to the east with Europe.

Mexico’s political division is made up of 32 federative entities and its capital is the Federal District, the seat of the Executive, Legislative and Judicial Branches.

Together with Canada and the United States, a country to which is has access across a border that extends for more than 3,000 km, Mexico forms part of North America. The country has 52 border crossing points to the United States, which are concentrated in six of its 32 federative entities (Baja California, Sonora, Chihuahua, Coahuila, Nuevo León and Tamaulipas).

To the south, Mexico borders on Guatemala and Belize, its doors of access to Central and South America, regions with whose countries it comprises Latin America and maintains close cultural relations, as well as growing trade links.

Demography
Mexico has talent for creating. Mexico has a population of almost 107 million inhabitants (2008), 56% of whom are under 30 years old. During the first quarter of 2008 the country’s Economically Active Population (EAP) was 45.1 million people, a figure that exceeds by one million that of the same quarter of 2007.

In 2008, 58 of every 100 persons of working age participated in economic activity. It has been calculated that in 30 years’ time, Mexico’s EAP will be 69 million people.

In Mexico, every year 90,000 engineering and technical students graduate. The Mexican Higher Education System is made up of 2,539 institutions which offer educational services and, of course, international exchange opportunities. Higher education in Mexico reaches a total enrollment (school and non-school) of almost 3 million students.

Political Maturity
The highest juridical compilation in our country, the Political Constitution of Mexico, establishes that the Branches of Government are divided into the Executive (President of Mexico), Legislative (Chamber of Deputies and Senate) and Judicial (Supreme Court of Justice and the Courts).

Mexico is immersed in a historic process of transformation; the country is living a well-established and plural democracy, in which multiple institutions prevail which act in line with the Rule of Law. This process of change has furthered the building of agreements through dialog among the different political forces. Thus, conclusive reforms have been passed in benefit of all Mexicans.

Mexico has also made important efforts to increase its productivity and be more competitive on the international scenario. Its system of government has made it easier to endorse laws and mechanisms that guarantee the transparency and security of investments, as well as of industrial and private property.

On June 12, 2003, Mexico approved the Federal Law on Transparency and Access to Public Government Information (IFAI) which, as part of the process of reform of the State has as its purpose to strengthen the democratization of the country, as well as to establish a relationship based on the government’s accountability to society.

Macroeconomic Stability
In Mexico people can do profitable business. The economic policies of the last few decades have been a determining factor in guaranteeing the sound and stable macroeconomic environment that persists in Mexico. The country has well-balanced public finances and a wide margin for maneuver in critical circumstances. Likewise, it shows external accounts with very moderate deficits and one of the lowest inflation rates among Latin America’s main economies.

In order to deal with the effects of the current economic situation, the Mexican government has implemented several effective countercyclical measures that have made it possible to attenuate the consequences of the crisis.

Business Climate
Mexico has numerous Free Trade Agreements in the world. Thanks to the fact that it has signed trade and investment agreements with 52 countries on three continents, Mexico is a strategic access door to a potential market of over one billion consumers, which represents two-thirds of world imports and 75 percent of world GDP.

Likewise, the country has signed Agreements on the Reciprocal Promotion and Protection of Investments (which foster legal protection of capital flows intended for the productive sector) with 24 countries and signed Agreements to Avoid Double Taxation (which prevent taxpayers from being assessed for taxes of comparable nature and in one same period by two or more fiscal jurisdictions) with more than 30.

In Mexico there are areas in which strategic industries, like the aerospace and automotive ones, have developed thanks to the competitive manufacturing costs the country has to offer. Mexico has also implemented a number of successful programs for trade simplification through which the products with zero tariff will increase from 20 percent in 2008 to 65 percent in 2013.

So far, more than 6,350 Mexican companies have registered voluntarily in the National Environmental Audit Program (PNAA) in order to be certified as Clean Industries. Over the past 17 years these companies have invested around 20 billion pesos to modify their production processes and thus achieve greater development of the materials, inputs and natural resources they transform.

In ProMexico, investors will find an ally for the optimal development of their businesses.

Logistics Infrastructure
Mexico’s infrastructure has seen unprecedented development. The country is a world-class logistical platform for investment and trade, and acts as a link that connects North and South America.

In 2009, more than 40 billion dollars will be invested in infrastructure. Investment promoted by the government will exceed 5 percent of GDP in the same year.

Airports:  Mexico is well connected. The country has 59 international airports and 26 domestic airports, as well as a fleet of 7,810 airplanes: 1,723 commercial, 5,735 for private use and 352 for official use. In 2007, Mexico’s airports received 53.3 million passengers.

Highways:  Mexico has 360,075 kilometers of roads, highways and toll highways that interconnect different cities and ports of entry at national level. Mexico’s highways are safe and go through both the cities with the greatest economic activity and some of the country’s smallest settlements. The highway network connects the North with the South and joins the different Pacific Ocean ports with those of the Gulf of Mexico.

In 2009, the Government will invest around 50 billion pesos in expanding said network alone. It should be emphasized that Mexico has spent four years operating new schemes for investment in highways. This involves associations with public-private participation that operate in different types of infrastructure.

Ports:  Mexico has 16 maritime ports open to foreign trade.To increase the existing infrastructure, reduce logistical costs and foster competition in the national port system, the Government has invested almost 16 billion pesos in the country’s ports during the first two years of its administration, representing slightly more than 51 percent of the budget allocated to the port sector between 2001 and 2002.

Railroads:  Mexico has more than 26,000 km of railroads. In recent years, the freight volume moved by railway has doubled to reach almost 100 million tons in 2008.

Industrial parks:  In Mexico there are 541 industrial parks offering suitable conditions for industry to operate efficiently (quality, infrastructure, urbanization and services).


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