Mexico has the second-largest economy in Latin America and the 15th largest in the world. The country is one of the top global exporters of manufactured goods and is a major exporter to the United States; it is currently our third-largest trading partner. Over the next five years, Mexico’s position in the global market is forecasted to grow to be one of the top 20 countries to drive the global economy.
As with most large, complex nations, the legal, financial and regulatory landscape may be somewhat opaque or confusing to outside investors or businesses. Having experienced contacts in the market who are well versed in the local culture is an essential asset when navigating complex bureaucratic processes.
Advantages of doing business in Mexico
Open to foreign direct investment
The Mexican government is supportive and encouraging of foreign direct investment. Investors are attracted to the region due to its macroeconomic stability, fast-growing customer base and increasingly skilled labor market.
In the past, the United States has been one of the largest foreign direct investment sources in Mexico. Now, Mexico is attracting an increasing number of global investors, resulting in the country’s rank as 15th in the world for direct investment.
Strong trade agreements
Mexico has trade agreements with 45 countries, providing investors with access to over 50% of GDP worldwide. U.S.–Mexico–Canada Agreement, which will replace for NAFTA, is expected to be ratified by all parties. Mexico has a variety of other trade agreements in place, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the EU–Mexico Trade Agreement, the EFTA Free Trade Agreement and the Pacific Alliance agreement.
Together, these trade agreements enable manufacturers to access 60% of the world, as well as helping to drive more foreign investment.
Mexico has a diverse economy that includes agriculture, industrial and the services industry. This diversification helps to create stability for investors. The country is currently the world’s 11th largest exporter due to its strong production capacity. Mexico recently started expanding beyond raw material production, such as oil — focusing instead on manufacturing products that integrate to regional and global value chains.
Mexico also captures GDP dollars from financial services companies and investors in the services sector. Recent U.S. tariffs on China have made Mexico products and services more competitive in the U.S. market.
The Mexican government has invested heavily in infrastructure, which includes a network of railway and highway systems covering the entire country. The government is making additional investments to develop stronger infrastructure closer to the north and near the United States border.
Growing domestic market
Mexico has over 120 million consumers and a growing middle class with disposable income. The standard of living has risen steadily since the 1994 NAFTA agreement. The county’s middle class has risen to include roughly 47% of the country’s population.
Economists predict this growth will continue, and Mexico will become the world’s fifth-largest market by the year 2050. This growth will be supported by the country’s manufacturing and energy sectors, which will continue to increase household incomes and the purchasing power of middle-class consumers.