Ease of Doing Business Rank: 60
Mexico is a North American nation located south of the United States, and north of the Central American countries of Belize and Guatemala. The Pacific Ocean lies to the west and the Gulf of Mexico to the east.
The de facto language of Mexico is Spanish and it is most commonly used in government. It is spoken by 98.3% of the population. The Mexican government also recognizes 68 national languages, including 63 indigenous tongues.
Non-native languages include English, German, Arabic, Chinese and Japanese.
The 2019 population estimate for Mexico is 132 million. The majority of the population lives in urban areas (78.84%) including Mexico City with almost a tenth of the country’s inhabitants (12.29 million), followed by Itzapalpa and Ecatepec, each with over 1.8 million residents.
The top industries in Mexico revolve around services such as trade, transportation, finance and government which account for about two-thirds of gross domestic product. Manufacturing and oil production and exportation are also growing industries.
The Legatum Prosperity Index ranks Mexico 58th in global education.
The Times Higher Education World Rankings lists four Mexican universities in the top 1000 in the world, but none in the top 500.
The most common business entities in Mexico are Sole Trader, Limited Liability Stock Corporation, Limited Liability Corporation, and Partnership.
The most commonly incorporated entity in Mexico is a Limited Liability Stock Corporation.
Mexican income tax laws are complex and may require a specific computation to determine the proportional income tax paid abroad. Corporate tax laws are equally complicated. Mexico’s corporate tax rate is 30 percent.
The country does offer a duty referral program or preferential duty rates for companies importing raw materials or fixed assets to manufacture finished products within Mexico for export. Additionally, imported raw materials and fixed assets are not subject to VAT when a company has VAT certification.
Companies may also qualify for significant customs and administrative benefits such as simplified procedures to process imports and exports when they enter into the ‘Certified Company Registry’.
Upon approval, Mexico also provides a 30% tax credit for R&D expenses, including R&D investments. Taxpayers must submit the details of their R&D expenses for validation annually and the procedural requirements, qualifying expenses, and limitations are very exacting.
Real estate investment trusts and risk capital investments may also benefit from some incentives in Mexico.
The Mexican government has also introduced Special Economic Zones (ZEE) in certain areas of the country to encourage job creation, infrastructure, and economic development of the region. Incentives include 100% tax reduction for the first ten fiscal years and no VAT for goods acquired, with the required documentation.
The northern border region also offers tax credits to boost the development of the regional economy, including income, interest, capital gains, and VAT tax reductions.
Other specific and limited tax incentives are available for those engaged in air or sea transportation of goods or passengers, agriculture and forestry, in-bond warehouses used for the storage, safeguarding, or conservation of goods or merchandise, and renewable energy.
The largest business districts in Mexico are in Guadalajara, Mexico City, Monterrey, Puebla, and Tijuana.
Mexico City is the capital city and financial center of Mexico.
Mexico includes 35 UNESCO World Heritage Sites including the extensive Maya, Toltec, Olmec, and Aztec ruins such as Chichén Itzá, Tenochtitlan, and Teotihuacán. Mexico includes countless examples of pre-Columbian architecture.
The massive Aztec ruins at Teotihuacán are just outside of central Mexico City. This archaeological site features the two towering pyramids known as the Temple of the Moon and the Temple of the Sun.
The ornate Church of San Francisco with a gilded altar and sculpted leaves and flowers dates back to 1524 when the first twelve Franciscan friars came to Mexico to evangelize in New Spain.
Mexico is also one of the most biodiverse countries in the world due to its varied topography. From the stunning Copper and Sumidero Canyons to a Mesoamerican Barrier reef along the Caribbean coastline of the Yucatan Peninsula, Mexico has it all.
Monarch butterfly reserves, stunning sandy beaches, and cenotes and underground rivers are just a few of the attractions Mexico offers. The beach areas of Cancun, Riviera Maya, Cozumel, Isla Mujeres, Puerto Vallarta, Riviera Nayarit, and Los Cabos welcome millions of visitors annually.
Contemporary Mexico offers vibrant, creative architecture including the impressive La Cineteca Nacional, Calakmul and modernist Parroquia San Josemaría Escrivá church in Mexico City.
Mexico City is a cultural, artistic, and culinary hotspot with a diverse cultural lifestyle, many historic buildings, museums, food and craft markets and art galleries.
The sprawling Museo Nacional de Antropología and intimate Museo Frida Kahlo and Anahuacalli Museum which features the work of Diego Riviera are just a sample of the 150 museums throughout the country.
The Museo Soumaya is a must-see with its sweeping curves, ultra-modern styling, and collection of European Old Masters, including pieces by Auguste Rodin.
Mexico is also the home of mariachi music, tequila, folk dancing, and vibrant handicrafts. Visit an agave field or silver mine in Jalisco, or an art and textile market in almost any center for pre-colonial and modern art.
The first signs of civilization appeared when the Olmec arrived in Mexico around 1500 BC. Around 300 AD, the Aztecs reined and developed an urban society in Teotihuacán ruled by religious elite.
Around the same time, great Mayan centers appeared in the southern lowlands of the country, present-day Guatemala and Honduras. By around 750 AD, Teotihuacán was abandoned for reasons that remain unclear.
By 900 AD, Maya civilization collapsed too. New evidence suggests drought may have caused the demise.
The Toltec sacked and burned the great city of Teotihuacán about 900 AD. In the 12th century, nomadic tribes including the Aztecs destroyed the Toltec hegemony in central Mexico.
Cerca 1345 AD, the Aztecs began the construction of the great city of Tenochtitlan. Eventually through warfare and shifting alliances the Aztecs gained control over most of central Mexico.
In 1519, the Spanish arrived on the Gulf coast near Veracruz. In a short time they established control over most of Mexico, because they forged alliances with warring factions within the Aztec empire. Tenochtitlan fell to Spanish control in 1521.
The Spanish monarchy ruled New Spain for 300 years through a series of viceroys. Spanish troops and European diseases decimated the population. By the 19th century, less than six million of the original 26 million residents remained.
The Catholic Church became the most powerful and wealthy institution in the colony and galleons stripped the country of its gold and silver for the Spanish crown.
The Spanish grip on Mexico weakened during the French Revolution and the American Wars of Independence. In 1810, Mexico claimed they’d achieved independence. However, no lasting settlement was reached. General Santa Ana overtook the government as president or dictator no less than 11 times.
Mexico’s instability meant they were prey to foreign powers. The U.S. annexed Texas in 1845 and invaded Mexico City in 1848. France temporarily invaded Veracruz in 1838 and Napoleon III took Mexico City in 1861.
In 1876, General Porfirio Díaz seized power and ruled as a dictator until 1911. His strong-handed tactics led to resistance and in 1910 Francisco Madero stood against him. He was imprisoned, escaped, and sparked a revolution.
Armed revolutionary groups emerged and by 1917 the country had a new constitution protecting workers, mineral rights, and land distribution. However, progress was slow and the president could not run for re-election under the constitution.
In 1928, the Institutional Revolutionary Party took power and citizens elected Lázaro Cárdenas as president in 1934. He accelerated land distribution and nationalized the Mexican oil industry.
Today, the country is a democratic republic with the president head of state and head of government. The current government of Mexico is still guided by the 1917 constitution.
Mexico is predominately Roman Catholic (82.7%) while another 10 percent are Christians from other churches such as Mormon or Protestant.
Mexico has a very diverse population. Most identify as mestizo, or combined European and Indigenous American descent (53%). Mexico also has many foreigners residing in the country as well as some East Asian, Middle Eastern, Jewish, and Muslim.
Additional Information for Business
According to Forbes’ 2019 Best Countries for Business Mexico ranks 54th overall globally for conducting business.
The 2019 Index of Economic Freedom rates Mexico 66th globally. The country relies heavily on its partnership with the United States and corruption and crime are high.