Investing in Mexico may not be at the top of your list of things to do, but the reality is that this strong, growing nation offers exceptional opportunities for investors and business professionals like you. This country has unfortunately been plagued by a reputation that is known for its drug lords, crime, monopolies, poor taxation policy and more. However, the reality is that things have changed in Mexico.
There are now many investment opportunities in Mexico that you can pursue, and the country has rapidly changed in recent years to provide you with even more reasons to invest in Mexico. When you spend time learning more about the companies investing in Mexico and the top reasons for investing in Mexico, you will see who now is the ideal time to jump in and take advantage of incredible opportunities available to you in this country.
Investing in Mexico – 10 Reasons to Do It
1. Political Reform Is Improving the Country
Mexico is a country that has been plagued with stifled growth and limited opportunities for years due in large part to structural issues inside the government. However, when President Nieto was elected to office in 2012, he brought a wave of structural change to the country. For example, through his efforts, he has broken up strong telecommunications monopolies, reformed the National Union of Education Workers and improved the oil, gas and electric industries with fabulous results.
Some of the top US companies in Mexico today include Walmart, Citigroup, Apple, General Electric, JP Chase Morgan, Ford, and others. By seeing that other top companies investing in Mexico under the recent reforms, you can see that investing in Mexico makes incredible sense. With President Nieto still in power in Mexico, there is a very good chance that he will continue to reform and improve the country in different ways. Investing in a country with strong political leadership that is focused on improving the lives of its people makes sense.
2. Energy Reform Offers New Opportunities
For more than 75 years, Mexico operated with a monopoly on its hydrocarbon industry, but this has recently changed thanks in large part to the country’s new president. Energy reform legislation has opened this incredible market up to the private sector, and this has created incredible opportunities for investing in Mexico.
An important side benefit that companies can prosper from when operating in Mexico is that the breakup of a huge electrical provider monopoly has resulted in energy costs being slashed by 40 to 60 percent. This means that it is far more affordable to do business in this country. There are also excellent opportunities for those who are in the energy field to take advantage of privatization for profits.
3. Exceptional Labor Costs
One of the top reasons why many companies decide to do business in Mexico relates to the affordable cost of labor. Thanks in large part to how weak the peso is to the U.S. dollar, Mexican workers can complete the same tasks that American workers do for a fraction of the cost.
All companies are looking for exceptional ways to reduce their overhead, and reducing the significant cost of labor by hiring a more affordable yet equally as skilled workforce is beneficial in many cases. Ford is an example of a U.S. company that is taking advantage of cheap labor in Mexico.
Furthermore, because of immigration policies in the United States that are sending undocumented workers in the U.S. back to Mexico, Mexico is now teeming with a hungry labor market that is ready to get right to work.
4. Goods Can Be Exported to the U.S. Duty-Free
You may think that doing business in another country would result in the need to pay expensive export duties that would eat away at your profits, but this is not necessarily the case. More than 80 percent of the products produced in Mexico are exported to the United States and Canada. This is because the NAFTA treaty that is in full effect allows Mexico to trade with these other North American countries without paying a duty.
This means that you can take advantage of the low cost of production in Mexico in a truly effective manner that bolsters your bottom line and that makes your goods a cost-effective option in the marketplace. Apple and General Electric are just a few of the U.S. companies that are taking full advantage of this benefit.
5. Labor Force Has a Strong Work Ethic
The Mexican workforce may work for pennies on the dollar in comparison to the American workforce. However, they are certainly not lazy. In fact, these workers are used to working harder and for longer hours each day than workers in America and other countries.
This means that you may see your overall production level increase substantially when you take advantage of the incredible work ethic of the Mexican labor market.
6. Rebounding U.S. Economy Is Bolstering Mexican Exports
Because so much of Mexico’s exports are sent to the United States, its economy is closely linked to the American economy. In recent years, the American economy has been strongly rebounding from the recession that originally gripped the United States in 2008. This incredible growth is resulting in domestic growth and prosperity in Mexico as well.
Because Mexico is an emerging market with a strong need for consumer products, the demand for many products is significant in this country. You do not need to have a physical location in the United States to take advantage of the benefits of doing business in America.
7. Domestic Consumer Spending Is Increasing
While you may export some of your products to the United States, Canada, and other countries, it makes sense to keep some of your products in Mexico as well. The consumption of consumer goods has dramatically increased in Mexico over the last few decades.
As the quality of life for Mexicans has increased, their demand for everything from appliances and clothes to electronics, vehicles, technical services, foods and more has increased. This means that regardless of the sector that you are involved in, there is a good chance that you can reap incredible profits by tapping into this marketplace.
8. Education Levels of the Labor Market Are Increasing
You may think that the majority of the workforce in Mexico is uneducated and is only therefore beneficial to you if you work in a field that needs unskilled or lightly skilled workers. However, the educational credentials of Mexico’s workforce have evolved over the years. In 1990, only eight percent of the Mexican population had a college degree. In 2000, more than 16 percent of Mexicans had a college degree. This shows the incredible upward trend of the knowledge base of the Mexican workforce.
While you may still want to move your manufacturing or assembly facility to Mexico, you can also take advantage of the educated, skilled workforce here by moving your office or administrative facility to Mexico as well. Keep in mind that most individuals with a college degree work in Mexico City and other developed cities throughout the country. Some of the U.S. companies that are actively taking advantage of the educated labor force in Mexico are Citi and JP Morgan.
9. Strong Infrastructure Already in Place
Before investing in Mexico, you may think that an emerging country such as this one would have a limited infrastructure that can slow down your operations in some way. However, the country has a well-established infrastructure for shipping, technology, labor, taxation and more. You can easily construct or remodel your space to create the ideal work environment for your team, and you will have access to high-speed Internet connectivity as well as shipping by rail, sea, air and land. Your operations will not be impeded in any way by a lack of infrastructure when you do business in Mexico, and you will not need to pay to invest in infrastructure to outfit your facility properly.
10. Economic Opportunities Are Diverse
Mexico is a country that is ripe with opportunity in a wide range of sectors. Its top export is in the automobile industry, and it also exports a tremendous amount of computers, medical equipment, machinery, plastics, furniture, home products and more. There are also many natural resources readily available inside the country for a low rate. This includes oil and gas reserves, a wide range of crops, gems, metals and more.
The country is struggling to keep up with demand for its products both on a domestic level and on an international level. With this in mind, you can see that there are incredible economic activities that you can pursue when you spend time and effort investing in Mexico.
Get Started Investing in Mexico Today
While the thought of pursuing investment opportunities in Mexico may have initially sounded like a bad idea, you can see that there are many incredible reasons why you should start in investing in Mexico soon. This is a country that is strongly poised for economic growth and abundant prosperity.
Now is the time to catch the curve and ride your way to incredible profits. Analyze the benefits that your business could enjoy by doing business in Mexico, and you may see why now is the ideal time to jump into the water.