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Why Mexico?

Mexico's Investment Landscape

If you are looking to broaden your investment horizons, Mexico should top the list of destinations for your next venture. Its strategic location, growing economy, and skilled workforce present a vast array of opportunities for businesses and investors alike. The powerhouse ranks among the top 15 global economies and is the second-largest economy in Latin America.

With its proximity to the United States, Mexico serves as a key gateway to North American markets. In addition, it offers easy access to trade routes spanning both the Atlantic and Pacific Oceans. Thanks to its advantageous location, businesses can tap into a colossal market of over one billion consumers and 60% of the world’s GDP.

Whether you are an entrepreneur or seasoned investor, exploring Mexico’s colourful investment landscape could open new vistas of opportunity. The country’s government has introduced various initiatives to encourage foreign investment and entrepreneurship, providing optimal conditions for businesses to thrive.

A dynamic and competitive hub for foreign investment

Mexico has emerged as one of the most competitive nations worldwide in terms of productive investment. It boasts a sizeable domestic market, a stable macroeconomic framework, healthy economic growth rate, and advanced manufacturing capabilities. The convergence of these factors positions Mexico as an enticing hub for foreign investment. 

The USD 1.4-trillion economy has sustained its growth momentum for the eighth consecutive quarter, thanks to strong domestic consumption and industrial activity. In the third quarter of 2023, real GDP registered a growth of 3.6%, surpassing both the previous quarter’s increase of 3.4% and analysts’ projection of 3.2%.

As an open economy, Mexico offers unfettered access to international markets through 13 free trade agreements with 50 countries. This includes the trilateral United States–Mexico–Canada Agreement that replaced the North American Free Trade Agreement. In addition, foreign investors can enjoy legal certainty in Mexico. The country has entered into Reciprocal Investment Promotion and Protection Agreements with 33 nations, including Australia, China, Germany, India, and the United Kingdom. The aim is to provide assurance to foreign investors in Mexico as well as Mexican investors abroad.

Ease of setting up business operations

In general, the process of incorporating a company in Mexico takes between two to three weeks. Once the incorporation is complete, the company can enter into contracts, open bank accounts, and formally commence operations. Incorporated companies in Mexico enjoy the freedom to pursue any business purpose without the need for prior authorisation. Special permits may, however, need to be obtained if the business falls within a particular niche sector. For instance, financial institutions or entities operating in the energy, oil, and gas sectors would require approval from the authorities.

Overview of Mexico’s states

Officially called the United Mexican States, Mexico is located to the south of the US and to the north of Guatemala and Belize. It is flanked by the Pacific Ocean to the west and the Gulf of Mexico to the east. With a vast total area of 758,450 square miles, Mexico ranks as the fifth-largest country in the Americas and the 14th largest globally. It is a federal republic territorially divided 31 states and one Federal District, which are geographically organised into three regions: North, Centre, and South.

The 31 states are as follows:

Aguascalientes, Baja California, Baja California Sur, Campeche, Coahuila, Colima, Chiapas, Chihuahua, Durango, Guanajuato, Guerrero, Hidalgo, Jalisco, Mexico, Michoacán, Morelos, Nayarit, Nuevo León, Oaxaca, Puebla, Querétaro, Quintana Roo, San Luis Potosi, Sinaloa, Sonora, Tabasco, Tamaulipas, Tlaxcala, Veracruz, Yucatán, and Zacatecas.

Mexico is among the top destinations for foreign direct investment (“FDI”) in Latin America

In the first half of 2023, FDI in Mexico soared to over USD 29 billion. The surge represents a substantial 41% increase compared to the same period in 2022. According to a statement by the ministry, the results reflected the confidence of investors in sustaining, enlarging, and initiating investments in Mexico. The US, Canada, Spain, Japan, and Germany account for the vast majority of foreign investment flowing into Mexico. Industries such as mining, manufacturing, financial and insurance services, transportation, retail and wholesale trade have seen the most foreign investment.

Northern states along the US border attract the most influx of foreign capital. This is primarily due to the presence of maquiladoras, which are manufacturing and assembly plants geared towards production for export. These facilities are typically owned and operated by foreign companies to leverage the lower labour costs and preferential trade agreements. Additionally, foreign investment is concentrated in Mexico City and the neighbouring Bajio region, encompassing areas such as Guanajuato and Queretaro.

Historically, Mexico’s southern states have not received much fanfare from foreign investors. However, the current administration is ramping up efforts to attract investment to the region. To this end, ambitious infrastructure projects have been launched. These include the Maya Train to enhance connectivity, the Dos Bocas refinery to bolster the energy sector, and the Trans-isthmus Corridor to consolidate Mexico’s position as a leading logistics hub.

Popular Investment Destinations

Mexico City

Mexico City, the capital, is a Federal District. The capital city of Mexico is the most populous city in Latin America. Based on data from the Mexican Institute for Competitiveness, places that demonstrate higher competitiveness draw in greater talent and investment. They also prioritise the improvement of working conditions. Mexico City boasts a competitiveness index of 63.22. It has consistently held the position of the most competitive entity for 20 years in a row.  

With a population of 21.2 million people, Mexico City is one of the most populous metropolitan areas in the world. The central region of Mexico is home to over half of the country’s population. The arid northern regions and the tropical southern areas have relatively low population densities.

In recent years, Mexico City has entered the spotlight as a burgeoning tech hub with a strong focus on cultivating entrepreneurship. It is home to around 75% of all fintech companies in the country. A host of government initiatives has partially fuelled the rapid growth of a budding tech ecosystem. In 2018, Mexico was the first country in Latin America to introduce legislation regulating fintech. The regulatory framework facilitates the entry of new players and the diversification of existing players’ offerings.

The industry’s explosive development can also be chalked up to an abundance of funding opportunities, local talent, and the city’s advantageous location. In close proximity to thriving tech hubs in Austin and Los Angeles, Mexico City enables entrepreneurs to stay connected to the neighbouring tech scene. Further, it serves as a strategic testing base and a gateway to Latin America’s dynamic markets.

Nuevo León

Nuevo León, bounded to the north by the US, is situated in north-eastern Mexico. It was the second-largest recipient of foreign direct investment in 2022. The appeal of Nuevo León lies primarily in its industries. Renowned for its ironworks, steelworks, and smelters, the state was the birthplace of Mexico’s first heavy industrial plants. These early establishments played a pivotal role in laying the foundation for the country’s industrial development.

  • Automotive

With the third largest economy in Mexico, Nuevo León is the country’s third-largest contributor of automotive parts. Industry giants, such as Brembo, Caterpillar, Denso, Daimler, KIA, Magna, have established operations in Nuevo León. Additionally, the state is home to the Nuevo León Automotive Cluster, an association of leading manufacturers as well as educational institutions and government bodies affiliated with the industry. Last year, Tesla announced plans to open an assembly plant near Nuevo León’s capital, Monterrey. By choosing Nuevo León as the location for its first Gigafactory in Mexico, Tesla joins a growing list of prominent industry players tapping into the state’s vast manufacturing capabilities.

  • Production of domestic appliances

Nuevo León is also at the very forefront in the production of household appliances in Mexico. 41% of the country’s total production of home appliances takes place within the state. Industry heavyweights such as LG, Panasonic, Philips, and Whirlpool have established a strong presence in the region. The concentration of Tier 1, 2, and 3 appliance manufacturers in and around Monterrey underscores the area’s importance as a key production hub.


Located in the west-central region of Mexico, Jalisco is the country’s fourth-largest economy. Lauded for its diversity and adaptability, Jalisco’s economy is one of the most dynamic in Mexico. The state has cultivated a robust business ecosystem spanning various industries, ranging from agriculture to semiconductor design. It has attracted a multitude of businesses that have originated or relocated and prospered here.

  • Agribusiness

Agriculture and other primary production sectors form the backbone of Jalisco’s economy. Jalisco led national primary production in 2022 with 41.7 million tons of agricultural, aquaculture, fishery, and livestock products. The state’s fertile lands produce heavy yields of maize, wheat, beans, and sugarcane. In addition, it is one of Mexico’s leading producers of beef and pork. The iconic beverage tequila was named after its birthplace – a town in Jalisco bearing the same name. Jalisco’s agribusiness sector is poised for exciting developments, as it makes inroads into agri-tech and crop diversification.

  • Manufacturing and advanced manufacturing

With over 37,000 companies operating in its manufacturing sector, Jalisco serves as a national epicentre of manufacturing activities. It has contributed to the generation of over 507,206 jobs. Notably, the region excels in automotive, electronics, metalworks, plastics, and telecommunications.

Over the recent years, Jalisco’s advanced manufacturing industry has experienced marked growth, primarily driven by the consolidation of its automotive parts sector and the arrival of aerospace companies. Jalisco hosts the operations of 150 automotive companies, the majority of which specialise in manufacturing supplies for light vehicles. The remaining companies serve the heavy vehicle market and altogether employ nearly 30,000 people.


Guanajuato, situated in central Mexico, ranks as the sixth-largest economy in the country. Its industrial and manufacturing sectors have seen significant growth, as evidenced by the presence of 58 industrial parks. A total of 3,200 hectares are designated for industrial purposes. In addition, the state has a young and well-qualified workforce, with an economically active population of over 2.4 million. Its rapidly expanding young population has the second-fastest growth rate in the nation. This demographic advantage has been conducive to the state’s economic growth and development.

  • Automotive

According to statistics provided by Mexico’s Industria Nacional de Autopartes, Guanajuato ranked first in vehicle production across the country. In 2022 alone, it manufactured 725,251 units, which accounted for 21.9% of the national aggregate figure. The Bajio region overtook Nuevo León, Coahuila, Puebla, Aguascalientes, and San Luis Potosi in automotive production.

Guanajuato has emerged as a prime destination for automotive Original Equipment Manufacturers (“OEMs”). It is the only state that is home to seven world-renowned OEMs. After the entrance of General Motors in the 1990s, Ford, Hino, Honda, Mazda, Toyota, and Volkswagen followed suit. Guanajuato also houses a vibrant automotive cluster comprising around 3,600 suppliers. Further, there are many business opportunities to be grasped along the regional automotive supply chain. These encompass additive manufacturing, electrical vehicle components, electronics, fuel efficiency solutions, and high precision plastic injection.

  • Information technology (“IT”)

Guanajuato boasts a thriving cluster of IT and creative industries. The IT cluster is predominantly sculpted by the specific needs of the automotive and agribusiness industries. Driven by disruptive trends, such traditional industries are undergoing a digital transformation through and through. The ongoing process of digitalisation is commonly referred to as Industry 4.0 or the Fourth Industrial Revolution.


Bounded to the north by New Mexico and Texas, Chihuahua is the ninth-largest economy in Mexico. Located in the north, it is Mexico’s largest state by land area. In 2022, Chihuahua came in at third place for the highest GDP growth among the states, soaring by 8.1%. As a producer of copper, iron, gold, lead, silver, and zinc, Chihuahua plays a leading role in the mining sector. The western mountain regions hold economic significance due to their thriving forestry and livestock-raising industries.

  • Manufacturing

Chihuahua has a flourishing manufacturing sector, which makes up around 67% of its total economic activities. It has evolved into a major hub for the special Manufacturing, Maquiladora, and Export Services Industry promoted by the Mexican government. An impressive roster of more than 500 companies operate in this booming sector in the region. Collectively, they generate around 373,000 employment opportunities. Some notable companies that have established operations in the state include Ford, Johnson & Johnson, and Borg Warner. Chihuahua specialises in the production of automotive parts, medical devices, electronics, and electrical goods, in particular.

  • Nearshoring

Nearshoring is a business strategy that involves relocating some or all of a company’s operations closer to its target market, resulting in lower expenses and fewer logistical challenges. Recently, in light of global supply chain reconfigurations, Mexico has been gaining in popularity as a premier nearshoring destination. When it comes to harnessing the benefits of foreign investors establishing nearshoring operations, the state of Chihuahua takes the lead.

According to the state’s Ministry of Innovation and Economic Development, Chihuahua’s success can be attributed to the confluence of its advantageous location, sophisticated infrastructure, and strong collaborative ties between the public and private sectors. It has attracted substantial investments across ten key sectors, including apparel, automotive parts, electrical machinery, furniture, and vehicles.


Situated in the eastern-central region of Mexico, Puebla has the eleventh-largest economy. Since the 19th century, Puebla has served as a key agricultural-industrial hub in the vital Mexico City–Veracruz corridor. The main goods manufactured in this area include automobiles and automotive parts, beverages, machinery, processed foods, and textiles.

  • Automotive

Puebla’s automotive industry is a principal driver of growth in Mexico’s overall automotive sector.  The state’s capital city, sharing the same name, serves as a production hub for approximately 83% of light vehicles manufactured the country. In 1967, Volkswagen set up its biggest overseas assembly plant in Puebla. Following Volkswagen’s lead, Audi also established facilities there in 2016. The concentration of major automotive OEMs has catapulted Puebla to become the second-largest exporter of cars and automotive parts in Mexico. The presence of these automotive giants has attracted around 160 suppliers to Puebla, with about 90 belonging to Tier 1. Their main production specialisms include electronics manufacturing, paint application, injection moulding, and steel fabrication. 

  • Agribusiness

As one of Mexico’s breadbaskets, Puebla boasts a prosperous agribusiness industry that contributes significantly to the country’s overall agricultural output. Its agricultural activities primarily revolve around both the production of essential farming products and the processing of agricultural produce. Maize, coffee, avocado, beans, and alfalfa are among the main crops cultivated in the state. The industry’s growth potential lies in exploring sustainable practices and agri-tech to further bolster Puebla’s agricultural prowess.

Find Out How CW Can Help You

Our comprehensive range of services includes market analysis, cost analysis, supply chain assessment, regulatory and legal compliance, risk analysis, and strategic recommendations.

Drawing on our profound knowledge of the Latin American business and investment environment, we understand the unique hurdles faced by foreign companies and investors when expanding into Mexico.

By leveraging our extensive network of trusted and longstanding partners, comprising fellow accounting firms, law firms, trade promotion bodies, and other professional contacts, we can connect you with the right investment opportunities and help you establish strategic presence in Mexico and beyond. 

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