FDI in figures

Mexico is one of the emerging countries most open to foreign direct investment. However, over the last few years, its competitiveness has been slowed down due to the increase of organized crime and a lack of reforms in the energy, professional and financial fields.

The areas where foreign investments are concentrated the most are the border towns with the United States (where assembly factories are located), as well as the capital. The Yucatan peninsula continues to receive foreign investments thanks to its tourism appeal. These investments come especially from the United States and Spain (mainly from the banking sector). The sectors which received significant foreign investments are the financial, automobile and electronics services.

The country was heavily affected by the 2008 financial crisis, which considerably reduced the flow of FDI (almost 50% less in relation to the previous year). Foreign investment, which continued to decrease in 2009, is not expected to increase again before 2010.  Mexico is one to the Southern countries most affected by the crisis because of its high level of dependance on the American economy.

FDI are one of the most important sources of income for Mexico, behind the sale of oil and money transfers from Mexicans in the United States.  Economists agree that the reduction of FDI will have a negative impact on the general dynamism of the Mexican economy.  There will be less money in circulation and inevitably government budget restrictions at all levels. As long as the world economy does not show signs of stabilizing, there will be no improvements in this area.

Why you should choose to invest in Mexico

Strong points

- Mexico forms a bridge between North America and Latin America due to its geographical location;
- Mexico has an extensive variety of natural resources allowing for the development of all types of industries at competitive prices;
- Mexico is very open to direct foreign investments;
- Labor costs are not high and in general, there is a skilled labor force;
- Positive structural reforms have been made during the current presidential term;
- Mexico is the world's 8^th tourist destination.

Weak points

- The country depends excessively on its partnership with the United States;
- There is a high level of corruption;
- During the last few months, violence has increased especially the drug cartels;
- The country is encountering significant structural problems (economic and social).

Government measures to motivate or restrict FDI

The Mexican Government has created an open and safe environment for foreign investors. The recently undertaken economic policies should allow investors to manage the safety of their operations despite the unfavorable global external environment.

Public tresury funds have been made available to private companies that have been heavily affected by the crisis. Thus in November 2008, the Mexican government saved the Vitro company, one of the world's biggest glass producers, which was having liquidity problems because of its debts. The amount disbursed to save it was evaluated at 100 billion dollars. The cement corporation, Cemex, in turn registerd a 15 billion dollar debt, a debt which is higher than the value of the company, due to the collapse of the world construction sector.

Bilateral investment conventions signed by Mexico

Mexico counts with 24 Promotional and Reciprocal Protection Agreements for the Investments with Different States

Procedures relative to foreign investment

Freedom of establishment

Guaranteed.

Acquisition of holdings

Having a majority of capital holdings in a Mexican corporation is legal, except in certain sectors.

Obligation to declare

To find out the total to be declared consult General Direction of Foreign Investments

Competent organization for the declaration

General Direction of Foreign Investment

Finding assistance for further information

Investment aid agency

Fesec
Mexicali Industrial
National Bank of Foreign Trade