Doing Business in Mexico. Foreign Direct Investment (FDI)

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Contents:

1. About Mexico
2. Economic Outlook.
3. Free Trade Agreements of Mexico.
4. foreign direct investment (FDI) in Mexico. Why Invest in Mexico?
5. Software Industry sector
6. Agribusiness sector
7. Plastic and rubber sector.
8. Footwear sector
9. Setting up Business in Mexico

Summary:

With 105 million people, Mexico is the world's 10th biggest economy and the 7th most important commercial trader. Mexico has an exceptional geographic location with easy and fast communications between Mexico and North America, South America, Europe and Asia, as well as economic ties between these regions.

The economic figures indicate a well established and sustained economic program aimed at growth and sharing this growth with all the companies involved. Mexico's international trade in 2006 amounted 506.422 billion USD, where 250.292 were exports and 256.130 billion were imports, giving us a deficit of 5.838 billion USD., 23.8% lower than the one experienced in 2005.

A fundamental element of the strategy to open and diversify Mexico's foreign trade is the different treaties and trade agreements signed by Mexico since 1992. Mexico has signed more free trade agreements (FTAs) than any other country in the world and this has placed Mexico in a privileged position as one of the ten biggest exporters worldwide and one of the main receivers of foreign direct investment. To date, Mexico has signed FTAs with 32 countries and is in preliminary negotiations with 6 more.

In the 1994-2007 1st quarter period, the Foreign Direct Investment (FDI) accumulated was US$210.4 billions. The annual average FDI is US$16.2 billion, where almost 56% of Mexico´s FDI originates in the United States. There are over 16,000 foreign companies established in Mexico, where they enjoy a big local market and a solid platform for boosting their exports.

 Foreign Direct Investment had a very favorable performance for Mexico prompted by the negotiation of free trade agreements, the tax discord with the in bond assembling industry, new changes in the PITEX and Maquila programs. Free trade agreements with 33 countries in the world have favored DFI. During the time of free trade agreement negotiations the United States ranks first (56.3%), followed by the Netherlands (10.8%), Spain (10.0%), the United Kingdom (4.2%), Canada (3.4%), Germany (2.7%), Japan (2.1%) and Switzerland (1.6%).

As a January 1, 2001, Mexico started applying new rules to the temporary imports of goods and services used by “maquiladora” plants in Mexico, as provided in the Decree that Establishes amendments for the promotion and Operation of the Export Maquiladora Program.

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