Mexico has become a top destination for company owners looking to launch their businesses in North America. Foreign investors are drawn to the country because of its advantageous position and booming economy. Mexico presents a significant opportunity for entrepreneurs with a vast consumer base of approximately 132 million individuals.
The nation’s large population also provides business owners with a more accessible pool of qualified and skilled personnel.
There are several benefits of registering a business in Mexico, including access to numerous free trade agreements, effective protection of intellectual property, well-developed infrastructure, and so on.
This article will provide in-depth information on the numerous reasons for setting up a business in Mexico.
Numerous reasons for setting up a business in Mexico
Mexico is an appealing site for business development due to its strategic position, competent and economical workforce, IP protection regulations, free trade agreements, and developing economy.
Here are the various reasons for setting up a business in Mexico:
1. Free Trade Agreements
Mexico has approximately 13 free trade agreements (FTAs) which is one of the reasons for setting up a business in Mexico. These FTAs, which link Mexico to more than 50 nations, give firms tremendous prospects for rapid expansion while also supporting the Mexican economy.
Among the most lucrative trade accords particularly for American industries is the United States-Mexico-Canada Agreement (USMCA). The USMCA, a modified form of NAFTA, improved economic relations among its member nations and established more advantageous rules regarding intellectual property, labor, and online trading which has proved to be one of the benefits of registering a business in Mexico. Additionally, the USMCA removes a significant number of trade restrictions, both tariff and nontariff, enabling the continual movement of commodities and services. The Trans-Pacific Partnership, the EU-Mexico Trade Arrangements, the EFTA Free Trade Accords, and the Pacific Alliance Accord are just a few of the other trade arrangements that are in effect in Mexico. These trade agreements give producers exposure to 60% of the global market and encourage additional foreign investment.
2. Highly Qualified & Reasonable Personnel
The Mexican government has made investments in STEM teaching and skills to create highly educated and qualified laborers and engineers. Governments across the region are additionally setting up specialized training programs to generate sophisticated and highly qualified personnel. This gave overseas business owners access to a skilled and efficient workforce, enabling businesses to grow successfully in the country which is another one of the advantages of registering a company in Mexico. In comparison to many Asian industrial centers, worker costs in Mexico are significantly more reasonable which turns out to be one of the additional advantages of registering a company in Mexico.
3. Growing Economy
Mexico’s economy, which is currently expanding steadily following Brazil, is the 2nd biggest economy following Brazil in Latin America. An array of industries, including the service, manufacturing, and agricultural sectors, make up Mexico’s diversified economy. Because of its enormous production capacity, the nation is today one of the biggest exporters in the globe. Mexico provides producers with the potential to secure a place in the marketplace for their distinctive commodities and reach thousands of fresh customers. Hence the growing economy is one of the reasons for setting up a business in Mexico.
4. Effective IP Protection
One of the most crucial things for businesses to preserve is their intellectual property (IP). By setting their commodities and services apart from those of their competitors, IP enables businesses to safeguard their commodities and services. Intellectual property rights are rarely protected in many nations, but this is not the case in Mexico, which has strong IP legislation. Thus, the strong intellectual property legislation is another one of the reasons for setting up a business in Mexico.
Strong legal safeguards for intellectual property rights exist in Mexico, which may help to safeguard the patents of your business. The USMCA prioritized intellectual property rights (IPR) as one of its main areas of attention. Trade Secrets, which make it illegal to steal secret company knowledge with significance, and Ex-Officio Authority, which enables customs authorities to take possession of items that infringe IPR, are two of its most significant aspects. Hence, effective IP protections are another one of the benefits of registering a business in Mexico.
5. Several opportunities for business
Mexico is an attractive investment location and presents a number of intriguing business prospects to overseas investors which is another one of the reasons for setting up a business in Mexico.
Fintech, or financial technology, is a fast-expanding industry throughout most of Latin America, including Mexico. Mexico presents significant opportunities for e-commerce given the expanding use of Internet services as well as involvement in the banking system.
Additionally, another one of the crucial reasons to launch an enterprise in Mexico is that you can start a firm with only foreign capital. The Mexican government normally works hard to encourage international investment into the nation. This implies that in order to make a first investment, you will not need to go through expensive or time-consuming transfers of assets.
6. The IMMEX Program
The IMMEX Program is another one of the reasons for setting up a business in Mexico. Mexican manufacturers are attracted to the nation by its IMMEX scheme. Under this program, international companies are permitted to import raw materials and major parts tax and duty-free, provided that all completed products are exported from Mexico during a specific time period.
The IMMEX scheme not only offers cost-saving advantages but also allows companies the opportunity to work with a shelter manufacturer which is another one of the benefits of registering a business in Mexico.
7. Developed infrastructure
The Mexican government has made significant investments in its infrastructural development, resulting in an extensive system of highways and railways that spans the whole nation. The government is increasing its efforts to build a more robust infrastructure nearer to the north and the American border.
This infrastructure is crucial for companies that depend on the effective transit of commodities, and it has contributed to Mexico’s appeal as a manufacturing as well as distribution hub. Hence, the developed infrastructure of the nation is another one of the advantages of registering a company in Mexico as this infrastructure facilitates trade and communication throughout the nation.
Mexico has emerged as a desirable site for investors who are thinking about starting up a business in the country due to its size as one of the major economies in North America and one of the biggest exporters. There are several benefits of registering a business in Mexico, including the country’s extensive network of free trade agreements, strict laws controlling intellectual property, and abundance of business prospects.
If you need professional advice on establishing your business in Mexico, get in touch with our business experts at Odint Consulting. Our skilled team of experts will ensure that all necessary requirements are fulfilled, thereby allowing you to enter the Mexican economy successfully.
Mexico is an excellent location to launch an enterprise because the nation’s large population also provides business owners with a more accessible pool of qualified and skilled personnel. The country also has an extensive network of free trade agreements, strict laws controlling intellectual property, and an abundance of business prospects.
Yes, Mexico has robust legal protections for intellectual property rights, which can help you protect your company’s patents.
Free trade agreements provide businesses with fantastic opportunities for quick expansion. The USMCA is one of the most profitable trade agreements that has set more beneficial rules for intellectual property, labor, and online trading. The USMCA also eliminates a sizable number of trade barriers, both tariff and nontariff, facilitating an uninterrupted supply of goods and services.
Under the terms of the IMMEX program, international manufacturers are permitted to import tax and duty-free commodities and parts into Mexico, provided that 100% of all final products are exported outside of Mexico within a predetermined time period.
The Mexican government has made substantial investments in the development of its infrastructure, leading to a vast network of roadways and railways that run through the whole country. This infrastructure is essential for businesses that rely on the efficient passage of goods, and it has helped make Mexico attractive as a hub for both manufacturing and distribution.
Investors are drawn to Mexico due to the many agreements it has that support and safeguard foreign investments.