10 Reasons to Invest in Mexico in 2021
With the entry into force of the USMCA, we would like to share the 10 reasons to invest in Mexico, a market with growth and wealth potential.
Reason 1: Competitive Labor
Mexico is a country with competitive costs in labor that makes outsourcing to Mexico interesting.
Outsourcing to Mexico
Moreover, Mexico has a young and highly qualified workforce, where 45% of the population is between 30-49 years of age of which 17% graduate from world-class engineering programs.
For more information on Labor, check out Doing Business Mexico’s Labor Guide.
Reason 2: Domestic Market & Free Trade Agreement Network
A second reason to invest in Mexico is the fact that it is one of the most competitive countries for productive investment. Why? Mexico has a strong domestic market, as well as the capacity to generate advanced manufacturing, and Mexico has preferential access to international markets through its network of free trade agreements with 50 countries (1,300 million people ). In that sense, Mexico is an ideal export platform to access 60% of the world’s GDP.
Free Market in Mexico
Mexico’s trade openness has benefited Mexicans not only in generating jobs but also in promoting their products and services abroad. For more information on Mexico’s Free Trade Agreement network, visit Doing Business Mexico’s Trade Guide.
Reason 3: USMCA and the North American Market
Mexico is the gateway to the most important market in the world, the North American Market through the USMCA (i.e. the United States – Mexico – Canada Agreement). In fact, the USMCA region has a population of 493 billion people, equivalent to 24 billion dollars or 28.2% of world GDP. In addition, the region has an annual trade of 6 trillion dollars, representing 15.9% of the world’s total trade.
Reason 4: High Tech-Manufacturing in Mexico
Mexico is a leading exporter of advanced high-tech manufactures in Latin America, representing 35% of the region’s total trade. In 2019, 81% of Mexico’s total exports were manufactured goods.
Reason 5: Mexico has a Sophisticated Manufacturing Industry
Mexico manufactures and exports a large number of sophisticated goods, ranking among the top 20 of the Harvard Atlas of Economic Sophistication in 2018.
Reason 6: Innovative Industrial Platform in Mexico
Mexico has a diverse and innovative industrial platform with more than two-thirds of its exports coming from highly complex sectors. As noted above, Mexico ranks 19th in the Atlas of Economic Complexity. Indeed, the rank is explained because 23% of its exports are vehicles, 20% machinery, 20% electronics, 8% agriculture, 6% services, and 6% minerals.
Reason 7: Automotive and Aerospace Industry in Mexico
Mexico is the fourth exporter of new light passenger vehicles (2018) and sixth producer worldwide (2019). Furthermore, Mexico is also the sixth largest supplier of aircraft parts to the US (2019).
In addition, Mexico is also the sixth exporter of information technology products and services, and eighth of medical devices (2017).
Reason 8: Foreign Investment in Mexico
Mexico is one of the most attractive emerging countries to invest in, according to the World Investment Report 2020 of the United Nations Conference on Trade and Development (UNCTAD).
Mexico is ranked 14th among the main foreign direct investment (FDI) recipient countries on a global scale. In 2019, the USMCA region received 329 billion dollars, equivalent to 20.2%, of foreign direct investment worldwide. In 2021, economists expect that in 2021 FDI will increase considerably compared to the level registered in 2020, when it amounted to 31 billion dollars.
Reason 9: Modern Infrastructure in Mexico
Mexico is privileged with its geographical location and modern infrastructure. According to the WEF, Mexico is among the 30% of the countries with the best transport infrastructure, with 172,000 km of roads, 27,000 km of railways, 117 ports, and 76 airports (64 international and 12 national).
If you like to know more about Mexico in the international ranking, visit Mexico’s Competitiveness.
Reason 10: Leading Companies in Mexico
Mexico is a recipient of investment from the world’s leading companies in the automotive, electrical-electronics, metalworking, and aerospace industries.
According to figures from the Ministry of Economy, Mexico has an accumulated investment from 1999 to 2020 from Mainland China, Hong Kong SAR., and Taiwan of 3,596.3 million dollars.
For more statistics, visit Doing Business Mexico’s Foreign Investment Guide.
Notes on China, Hong Kong, and Taiwan:
China Investing in Mexico
Accumulated investment from China Mainland from 1999 to 2020 accounted for 1,417.4 million dollars, mainly in manufacturing industries (textile, chemical, pharmaceutical, electrical energy, plastic, metal-mechanics, electrical-electronics, auto parts, and various machinery), mining, telecommunications, energy, construction, and financial services. In 2020, Mexico received 173.4 million dollars of investment.
Hong Kong Investing in Mexico
Investment from Hong Kong, accumulated during the period from 1999 to 2020, accounted for 1,090.7 million dollars, in transport and storage services, mining, and manufacturing industries. In 2020, the country received an investment of 129.9 million dollars.
Taiwan Investing in Mexico
Accumulated investment from Taiwan in the period 1999 to 2020 accounted for 1,088.2 million dollars, mainly in manufacturing industries (computer equipment) and to a much lesser extent, textile manufacturing. In 2020 an investment of 36 million dollars was received in Mexico.