Mexico is currently a developing country with a diverse population and culture. The Mexican economy is becoming increasingly significant, making it a top exporter in various industries, including automotive, aerospace, and electronics.
For investors seeking new markets to allocate production resources, here are 10 reasons to consider investing in the Mexican market.
1. Strategic Geographic Location for Investment:
Mexico serves as the backyard of the world’s largest consumer market – the United States. Goods produced in Mexico can be transported to any location in the United States within less than 48 hours. Moreover, Mexico acts as a bridge between the United States and Canada and the rest of Latin America, making it strategically favorable for trade with multiple potential markets.
2. Large Economically Active Population:
The economically active population in Mexico comprises both men and women engaged in the production of goods and services. According to data in 2023, Mexico ranks as the 10th most populous country globally. In recent years, Mexico has implemented various supportive policies to enhance the skills of its workforce.
3. Extensive Free Trade Agreement (FTA) Network:
Mexico is a party to 14 FTA and numerous trade relationships with over 50 countries worldwide. Investing in Mexico provides access to the opportunity to transport goods duty-free to most major global markets. One of the most significant trade agreements is the CPTPP, of which Vietnam is also a member. Since the signing and implementation of the CPTPP in 2019, Mexico has increasingly become an attractive market for Vietnam, and vice versa.
4. Highly Skilled Workforce:
The rate of university graduates among Mexican youth has steadily increased over the past decade. Companies investing in Mexico can tap into a skilled labor force, including over 113,000 engineering graduates annually. In terms of engineer availability, Mexico ranks 8th globally.
5. Growing Domestic Investment Market:
In 2022, the service sector in Mexico recorded a growth rate of 2.7%, while manufacturing and industrial production achieved 3.2%. Agricultural activities reached 2.8% compared to 2021. The expanding middle class in Mexico is driving consumer spending in the domestic market. Additionally, Mexico has a young population, which promotes a robust growth environment for consumer markets.
6. Tax benefits and incentives:
Among the most significant incentives that attract Vietnamese investors to Mexico is the commitment to eliminate 77% of tariff lines immediately, equivalent to 36.5% of imports from Vietnam. Furthermore, Mexico will eliminate customs duties on 98% of tariff lines in the 10th year from the effective date of the CPTPP. This commitment also extends to Vietnamese Basa fish products, which will be entirely exempt from export duties to Mexico from the 3rd year of the CPTPP.
7. Innovation and Intellectual Property Protection:
Mexico is a member of several international organizations, including the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO), the Patent Cooperation Treaty (PCT), and the Paris Convention on Intellectual Property Protection.
8. Focus on Leading Investment Industries:
One of the most crucial industries in Mexico is automobile manufacturing, with many major companies investing in Mexico, making it the 7th largest automobile industry globally. Other notable industries such as aerospace, medical equipment, and electronics are also attracting significant attention.
9. Infrastructure Development Investment:
Mexico has invested approximately USD 600 billion in modernizing critical infrastructure, including upgrading existing and building new ports, transportation routes, railways, and power generation capacity.
10. Competitive Labor Force:
The basic wage calculated on a full-time basis for a new worker in Mexico is significantly lower compared to the full-time hourly wage in the United States. Labor costs for new workers in China are double those in Mexico.
Harley Miller Law Firm “HMLF”
Head office: 14th floor, HM Town building, 412 Nguyen Thi Minh Khai, Ward 05, District 3, Ho Chi Minh City.
Phone number: +84 937215585
Website: hmlf.vn Email: miller@hmlf.vn
