México: Invertir

FDI in Figures

Mexico is one of the emerging countries most open to foreign direct investment. According to the 2011 World Investment Report published by UNCTAD, Mexico occupies the tenth position in the world ranking of most attractive countries for 2011-2013. However, over the last few years, its competitiveness has been slowed down due to the increase of organized crime and a lack of reforms in the energy, professional and financial fields. Corruption and bureaucratic inefficiency also remain an issue.

The areas where foreign investments are concentrated the most are the border towns with the United States (where assembly factories are located), as well as the capital. The Yucatan peninsula continues to receive foreign investments thanks to its tourism appeal. These investments come especially from the United States and Spain (mainly from the banking sector). The sectors receiving significant foreign investments are finance, automobile industry and electronics services.

Except for a marked decrease in 2009, annual flows of FDI are quite stable. In 2011, 60% of FDI was been directed towards the automotive and energy industry. United States and Japan were the two largest investors.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	23,683	15,334	18,679
FDI Stock (million USD)	297,001	279,792	327,249
Performance Index*, Ranking on 141 Economies	101	97	-
Potential Index**, Ranking on 141 Economies	59	-	-
Number of Greenfield Investments***	346	317	-
FDI Inwards (in % of GFCF****)	9.2	-0.6	-
FDI Stock (in % of GDP)	27.3	35.4	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2011, in %
United States	50.6
Spain	14.7
The Netherlands	13.9
Canada	4.1
UK	2.8
Switzerland	2.6
Virgin Islands	1.9
Germany	1.8

Main Invested Sectors	2011, in %
Manufacturing Industry	43.6
Financial and Insurance Services	17.8
Trade	9.4
Construction	6.3
Information	5.6

Source: The Ministry of Economy - Last Available Data.

Form of Company Preferred By Foreign Investors: The most common forms of creating a business company are the Limited Liability Stock Corporation (Sociedad Anonima, S. A.) and the Limited Liability Company (Sociedad de Responsabilidad Limitada S.R.L.).
Form of Establishment Preferred By Foreign Investors: Subsidiaries and assembling plants for the "maquiladora" (assembly plant) industry.
Main Foreign Companies: IBM , Coca-cola, Motorola, Wal-Mart, Inditex Group, BBVA-Bancomer , Santander Group, Procter&Gamble , L'Oreal ; etc. Also, 500 of the most important Latin American enterprises have been installed in Mexico.
Sources of Statistics: General Direction of Foreign Investments

Why You Should Choose to Invest in Mexico

Strong Points: - Mexico forms a bridge between North America and Latin America due to its geographical location;
- Mexico has an extensive variety of natural resources allowing for the development of all types of industries at competitive prices;
- Mexico is very open to direct foreign investments;
- Labor costs are not high and in general, there is a skilled labor force;
- Positive structural reforms have been made during the current presidential term;
- Mexico is the world's 8^th tourist destination.
Weak Points: - The country depends excessively on its partnership with the United States;
- There is a high level of corruption;
- During the last few months, violence has increased especially the drug cartels;
- The country is encountering significant structural problems (economic and social).
Government Measures to Motivate or Restrict FDI: The Mexican Government has created an open and safe environment for foreign investors. The recently undertaken economic policies should allow investors to manage the safety of their operations despite the unfavorable global external environment.

Public tresury funds have been made available to private companies that have been heavily affected by the crisis. Thus in November 2008, the Mexican government saved the Vitro company, one of the world's biggest glass producers, which was having liquidity problems because of its debts. The amount disbursed to save it was evaluated at 100 billion dollars. The cement corporation, Cemex, in turn registerd a 15 billion dollar debt, a debt which is higher than the value of the company, due to the collapse of the world construction sector.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Mexico: Mexico counts with 24 Promotional and Reciprocal Protection Agreements for the Investments with Different States
International Controversies Registered By UNCTAD: Some cases have been registered, mainly on the real estate sector on areas of tourism in the state of Yucatan. Consult the dispute settlement proceeding.
Organizations Offering Their Assistance in Case of Disagreement: ICCMEX , International Chamber of Commerce in Mexico
Member of the Multilateral Investment Guarantee Agency: Mexico is in process of being accepted.

Country Comparison For the Protection of Investors

	Mexico	Latin America & Caribbean	United States	Germany
Index of Transaction Transparency*	8.0	4.1	7.0	5.0
Index of Manager’s Responsibility**	5.0	5.3	9.0	5.0
Index of Shareholders’ Power***	5.0	6.0	9.0	5.0
Index of Investor Protection****	6.0	5.1	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed.
Acquisition of Holdings: Having a majority of capital holdings in a Mexican corporation is legal, except in certain sectors.
Obligation to Declare: To find out the total to be declared consult General Direction of Foreign Investments
Competent Organization For the Declaration: General Direction of Foreign Investment

Office Real Estate and Land Ownership

The Possibility of Buying Land and Industrial and Commercial Buildings: Yes.
Risk of Expropriation: Foreign investors have a right to a compensation if they are victims of expropriation for public means.

Investment Aid

Privileged Geographical Zones: The fiscal incentives have been eliminated in light of fiscal reforms. In spite of this, the Mexican states compete strongly to attract foreign investments by developing programs to draw industries that allow:

- Reduced prices to purchase real estate.
- Training programs for employees.
- Reductions in payment of taxes.
Free Zones: There are two free trade zones in San Luis Potosi. The "maquiladora" (assembly factories) zone as well as the bonded warehouses and bonded zones (in customs) which are free trading posts to perform activities such as manufacturing, repairing, distribution and sales of merchandise.
Organizations Which Finance: Nacional Financiera, Banca de Desarrollo, Bancomext.

Investment Opportunities

The Key Sectors of the National Economy: Auto parts, machinery, equipment, chemicals and financial and insurance services.
High Potential Sectors: Post-sales service for the automotive sector (repairs, maintenance, sales of parts and accessories), electronics, distribution chains, food, beverage and tobacco products, professional technical services specialized and personalized.
Privatization Programs: In the real estate sector (particularly for the construction projects of low-cost housing), airports and some refineries.
Tenders, Projects and Public Procurement: Compranet, Public Procurements
Tenders Info, Tenders in Mexico
Compranet, Tenders
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Distribution and transportation of liquefied petroleum gas. Generation, distribution and commercialization of electricity.
For more information, consult the Laws of Foreign Investing.
Sectors in Decline: Agriculture and fishing, timber industry, mineral products non metallic, leisure, cultural, recreational and athletic services.

Finding Assistance For Further Information

Investment Aid Agency: Fesec
Mexicali Industrial
National Bank of Foreign Trade
Doing Business Guides: Mexico Commercial Guide 2010 - Buy USA

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