Page 184 - Caribbean-Central America Profile 2018

MEXICO

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

Official Name: United Mexican States
Capital: Mexico City
Nationality: Mexican(s)
Official Language: Spanish
Population Total (millions): 127.54 (2016 est.)
MEXICO Size: 760,000 square miles
Currency: Mexican Peso (MXN)
Internet Domain: .mx
International Dialling Code: +52
Electricity: 110/117 volts / 60 cycles

COUNTRY OVERVIEW INVESTMENT INCENTIVES
q The United Mexican States generally known The 1993 Foreign Investment Law, last updated in December 2015, governs foreign investment
as Mexico is located in North America, in Mexico. The law is consistent with the foreign investment chapter of the North American
bordered at the north by the United States, Free Trade Agreement between the U.S, Canada, and Mexico (NAFTA). It provides national
and at the south by Guatemala and Belize, treatment, eliminates performance requirements for most foreign investment projects, and
in Central America. liberalizes criteria for automatic approval of foreign investment.
q From high mountains to plains to Foreign investors may hold up to 100% of the capital stock of a Mexican corporation or partnership,
magnificent beaches, Mexico has been except in areas reserved exclusively for the state (i.e. petroleum and other hydrocarbons, basic
successful at luring tourists, especially petrochemicals, electricity, radioactive minerals, etc.) or reserved exclusively for Mexicans
from the United States, due to their close and Mexican corporations such as retail trade in gasoline and liquefied petroleum gas, radio
proximity.
broadcasting, radio and television services other than cable television, to name a few.
q It is the second-largest economy in Latin
America, dependent heavily on oil exports, Foreign investment has been simplified by legislative changes, a reduction in legal and
trade with the United States and money sent administrative bureaucracy and local content requirements, the elimination of most import
home by the millions of migrant workers in license requirements and an overhaul of the intellectual property legislation. There are no
the United States. general restrictions or limitations on the remittance of dividends or repatriation of capital.
q The Capital is Mexico City. MAQUILADORAS
The most significantly attractive incentive for foreign companies to do business in Mexico is
Mexico is open to foreign direct investment the Maquiladora, or IMMEX, sector that allows for cross-border manufacturing not subject to
(FDI) in the vast majority of economic sectors import/export duties.
and has consistently been one of the largest
recipients of FDI among emerging markets. To qualify to operate under maquiladora status, a foreign investor must have a corporate presence
Mexico’s macroeconomic stability, large in Mexico (which may be up to 100% ownership of a Mexican corporation). The foreign parent
domestic market, growing consumer base, company furnishes most of the machinery and equipment (M&E) required for the maquiladora
rising skilled labour pool, welcoming business activities, as well as raw materials or the parts to be processed and/or assembled; these items are
climate, and the proximity to the United States imported by the maquiladora but remain the property of the foreign company.
all help attract foreign investors.
Among the most attractive benefits afforded foreign manufacturers under this program are the
Foreign investment in Mexico has largely been following:
concentrated in the northern states close to the
U.S.A. border where most maquiladoras are • Duty-free imports for up to 18 months for raw materials and supplies for IMMEX certified
located, and in the Federal District (Mexico companies
City) and surrounding states, where most • A zero rate value-added tax on exports, even when physically exported to a third party
headquarters are located. Historically, southern • Value-added tax refunds within a 20 working day period for IMMEX certified manufacturers,
states have been overlooked by foreign rather than the customary 90 working days
investors, although that may change with the • Import duty refunds for inputs integrated into finished products exported by the manufacturer
launch of new special economic zones in 2017.
or sold to another entity for export
• Streamlined security for supply chains, including shipment security, reduced number of
inspections, access to exclusive FAST lanes at the border, reduced shipment times, etc
• Preferential support from the Foreign Trade Bank for loan guarantees, export policy/
program development assistance, financial assistance for direct exporters.

C-26 Caribbean-Central American Action