Maximising Nearshoring Benefits: Legal Strategies for Mexico

The experts highlight Mexico’s strategic location near major markets like the US, Canada, and Latin America. They discuss Mexico’s political and economic stability, open market policies, affordable workforce, accessible facilities and services, and government programmes supporting manufacturing and exports, such as the IMMEX programme.

Key aspects for companies include having knowledgeable local partners, defining specific activities for potential governmental authorisations, and choosing suitable locations based on considerations such as infrastructure, workforce availability, and potential tax incentives.

While Mexico’s overall legal framework relevant to foreign investment and the promotion of manufacturing and exporting activities has remained stable, the current administration has implemented stricter fiscal policies. However, the government also supports nearshoring through tax incentives and infrastructure projects, aiming to maintain Mexico’s attractiveness.

Companies must balance the benefits of nearshoring in Mexico with legal risks and challenges. Differences in legal systems and practices require thorough due diligence, including understanding local procedures, infrastructure availability, and potential delays due to lack of public investment.

Misconceptions about Mexico’s business environment include doubts about ease of doing business and industrial sophistication. The experts stress Mexico’s modernisation and attractiveness for investment. According to the World Bank, Mexico ranks 2nd in Latin America for overall ease of doing business. They advise companies to secure qualified advisers, involve them from the outset, conduct proper background checks on local partners, and secure industrial spaces early due to increasing demand.

The manufacturing industry, including automotive, aerospace, electronics, and pharmaceuticals, remains highly attractive for nearshoring in Mexico. Ancillary services and sectors like real estate, information technology, and communication infrastructure also benefit from this trend.