Mexico – full report

Lying right to the south of the US, Mexico shares both a maritime and a land border with its northern neighbour. Several treaties have been concluded between the two nations bilaterally and multilaterally. They are also both members of various international organisations. Mexico enjoys a strategic geographical position, great natural wealth and a relatively young population. 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.
The country also possesses an attractive exchange rate against the US dollar, relatively low transportation costs and a large number of Free Trade Agreements.

The capital Mexico City is one of the most important economic hubs in Latin America, contributing over 20% of the country’s gross domestic product. It has been ranked as the richest in Latin America, and among the top 10 in the world. Mexico City is increasingly being viewed as the financial capital of Latin America, and it’s easy to see why. From the largest international banks locating their headquarters here, to the strong presence of successful local banks, the finance industry in Mexico is booming.

According to the International Monetary Fund, the Mexican banking system is strong, in which private banks are profitable and well-capitalised. The process of institution-building in the financial sector has evolved together with the efforts of financial liberalisation and of inserting the economy more fully into world markets. The presence of foreign institutions and banks, as well as a better regulatory framework, has allowed Mexico’s banking system to grow in a positive light.Mexico has a single securities market, the Mexico Stock Exchange, also known as the Bolsa de Valores. Although relatively small when compared to other North American exchanges, it is Latin America’s second largest stock exchange, after Brazil’s. Mexico’s stock market is closely linked to developments in the US, and is directly affected by any changes in the New York and Nasdaq stock exchanges.

Information technology is another sector that’s growing by leaps and bounds in the country. The IT service market in Mexico has experienced sustained growth rates over the last few years. Mexico City is the IT hub for the country, with more than 700 IT companies based in the capital, and the city is strongly promoting the development of this sector. In 2006, a software development park was opened in Mexico City, this software cluster project aims to make the software sector more competitive by creating more support programmes.

Trade & Industry
Mexico is an export-oriented economy. It is an important trade power, and the country with the highest number of free trade agreements, among them NAFTA.The electrical-electronics industry is one of Mexico’s main exports, with exports reaching over USD2.6 billion in 2009. Employing over 100,000 people, the sector accounts for about 30% of total exports.The sector also faces a few challenges, for example the incentive programmes enacted by the US Congress in 2008 which provides tax credits for certain US-made energy efficient appliances untill 2010. With the significant credit amounts of USD200 for a refrigerator to USD250 for a washer, similar products manufactured in Mexico now compete at a disadvantage. The impact on the Mexican manufacturing sector has been serious, with jobs being lost and investments into research being scaled back. Leaders in the Mexican sector are keen that the US and Mexico work together, as they have in the past, to solve problems like these and increase the competitiveness of the region.

The Mexican health care system is mainly based on the free market system. But the public sector has its role to play too.
Mexico is also the first country in the world where a law authorising biological generics has been implemented. Mexican companies are becoming leaders in this high-tech sector exporting all over the world, with the exception of the USA, where this law does not exist yet.

Mexico offers so much by way of tourism. From its amazing beaches to its colonial treasures, there is something that will please every visitor. The World Tourism Organisation has ranked Mexico as one of the most important destinations in the world due to the number of tourists that visit the country.

In its capital Mexico City, magic is to be found on nearly every corner. From a boat trip across a lake in places like Xochimilco to the impressive pyramids of Teotihuacan, the tourist will be sure to find something that will make him hold his breath in wonder.

Within the city, Mexico’s monuments are some of its biggest attractions. Symbols of the country’s rich history, they build for the visitor a powerful image of how amazing Mexican culture and society are today. Mexico’s rich history is also showcased in its numerous museums that can be found throughout the country. Mexico is also an ideal place to learn the Spanish language. One of the schools – Frida Spanish school – organizes interesting trips to famous places. Just living there, enjoying life, you easily grasp the essentials, and quickly become fluent in this wonderful tongue. Mexico City has a fine choice of hotels for every budget. One of the city’s best is the Four Seasons. The hotel is wonderfully located near a lot of vintage touristic sites, and the best business and shopping areas of the Mexican capital.

Mexico is a destination that offers much to the would-be investor: a sound business environment with a stable government that is open to foreign direct investment, and is keen to work together with the private sector to help develop the country. The country’s economic stability and legal framework further provide security and protection for the interested investor.

You might be interested in