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The consumer

Consumer Profile
The population of Mexico is relatively young even though it is ageing. The median age is 29.8 years in 2022, whereas it was 26.2 in 2010. The population is growing at a rate of 1% (Data Reportal). According to the latest World Bank figures, 25.5% of the population is under 15 years old, 66.7% are between 15 and 64 years old and 7.8% are over 65 years old. On average there are 3.7 people per household with 10% of households living alone, 52% are couples with or without children, and 25% are stepfamilies (INEGI, latest data available). There is a slight decrease in the size of the household over time. Women represent 51.1% of the total population, with 81.3% of the population living in urban areas in 2022 (Data Reportal). The majority of Mexicans live in the middle of the country between the states of Jalisco and Veracruz. The main cities are Mexico City, Iztapalapa, Ecatepec de Morelos, Guadalajara, Puebla, Juarez and Tijuana. The level of education in Mexico is much lower than the average for OECD countries. Only 42% of adults aged 25 to 64 have completed upper secondary education, the lowest rate amongst OECD countries. Education is slightly more accessible for men than for women, as 42% of men have successfully completed high-school compared with 41% of women. Although, according to UNESCO statistics, tertiary enrollments in Mexico have more than doubled, going from 1.9 million to 4.4 million between 2000 and 2017. The Mexican government in 2012 made upper-secondary education compulsory for all children by 2020. Improving Mexico’s education system is critical for addressing pressing problems like high unemployment rates among Mexican youths, who are unemployed at twice the rate of the overall working age population. Some 67.5% of the active population are employees, 23.1% are self-employed, 4.2% are unpaid workers and 5.2% are employers.
Purchasing Power
The GDP per capita PPP is USD 20,036.46 (World Bank, 2021). People in Mexico earn USD 15 314 per year on average, much less than the OECD average of USD 43 241 and the lowest in the OECD. In Mexico, the average household net-adjusted disposable income per capita is USD 16,269 a year, considerably lower than the OECD average of USD 30,490 a year.

In terms of employment, about 59% of people aged 15 to 64 in Mexico have a paid job, lower than the OECD employment average of 66%. In 2021, some 76% of men are in paid work, compared with 45% of women. More than a quarter of Mexico’s active population is engaged in the informal economy (28.3%), with women (29%) more likely than men (27.8%) to hold informal jobs (INEGI, 2022). After decreasing significantly due to the Covid-19 pandemic, consumption has rebounded, with a growth rate of 8% in April 2022 compared to April 2021 (INEGI). Income inequality is high, and the Gini index is 45.4 but is has been decreasing in recent years (World Bank, latest data available). The share of women in the labour force is among the lowest in OECD countries. In 2021, women were paid 6.7% less than men, based on median, full-time earnings— better than the OECD average of 11.7%.
Consumer Behaviour
Purchasing criteria are usually product quality, practicality (time saving) and price. Customer service is increasingly important. There are many retail outlets in Mexico (kiosks, outdoor markets and covered, places with shops, shopping centres and supermarkets.) Depending on the geographical area, some types of trade will be more present than others. There is a gaping urban-rural income and spending divide. There is also a north-south  divide, as northern states have been the main recipients of foreign direct investment and, in turn, wages tend to be significantly higher there than in the less-developed south.

Following the Covid-19 crisis, consumer confidence reached its lowest point in April 2020 and then gradually began to rise again, with the seasonally-adjusted consumer confidence indicator published by the Statistical Institute (INEGI) standing at 43.6 points in June 2022.

Mexico is a Latin American country with the most e-commerce with 85% of people buying at least one product or service on the internet in the previous year. Amazon is the biggest online retailer, ahead of Mercado Libre and Wal-Mart of Mexico. Mexican consumers, especially in the capital are more  open to international companies.
Mexican consumers are amongst the most brand loyal in the world. Many seek to establish a relationship with the brand or company.

Also, Mexicans are ultra-connected to social networks. According to INEGI, in 2021 the country had 88.56 million Internet users, reflecting a growth rate of 6.7 percent over 2020. It has been estimated that around 68 percent of the Mexican population was on Facebook in 2022 (Data Reportal). More than half of the people who provided personal data on a social or professional network are worried about  possible misuse.

Among consumer trends in Mexico, time-saving products and services are important. The demand for organic products is developing with a desire for a healthier diet. As a reminder, Mexico is considered the second most obese country in the world. Organic products continue to be expensive but the market is growing by 10% a year. The consumption of more natural and artisanal products is increasing. The second-hand market is largely developed in the car, fashion and furniture sectors, whether online or in-store. The collaborative economy is just beginning to grow. Alternative transport companies (Ecobici, Smartbike, Mibici etc.) are being created as in the housing and carpooling sector.
Consumer Recourse to Credit
The most common payment method in Mexico is cash. However, credit and debit card usage is growing in large hotels, restaurants and shops. Household debt is relatively low in Mexico (16.12%) but rising. The Mexican population remains poorly informed about financial and banking products and this is a first obstacle to the development of consumer credit. In 2018, the total of household debt was 900 billion pesos and consumer loans increased by 1.3% between 2017 and 2018 thanks to  better knowledge of banking products. However, as Banxico has raised its key rates, the trend in consumer credit could slow down or decline.
Growing Sectors
Tobacco, beverages (alcoholic and non-alcoholic), food, housing maintenance and repair, holidays, accommodation services, transport services, medicines, dishes and household utensils, household appliances, leisure and garden equipment, cleaning services education, recreation and cultural services.
Consumers Associations
PROFECO , Procurator General for Consumer Protection
Alconsumidor , Association of Civil Assistance for Consumers


Importing & Distributing

Import Procedures
For tax purposes, all Mexican importers must register and be listed with the Official Register of Importers (Padrón de Importadores), maintained by the Secretariat of Finance and Public Credit (SHCP). The basic Mexican import document is the Import Request (Pedimento de Importación).

In order to apply the correct taxes/duties, the importing agent must present the import declaration, a commercial invoice, a bill of lading, a proof of exemption, and a certificate establishing the origin of the goods, documents demonstrating guarantee of payment of additional duties for undervalued goods if applicable (see the Customs Valuation section of this guide), and, if applicable, documents demonstrating compliance with Mexican product safety and performance regulations (see the Standards section).
All commercial imports into Mexico, whether they are temporary or permanent, can be executed by a qualified and authorized Mexican customs broker.

In the case of the textiles, apparel, and footwear sectors, the importer must be registered in the Padrón for textile, apparel, and footwear products. The main goal of the program is to protect local industry against counterfeiting from Asia.

Mexico has developed 'Sectoral Promotion Programmes' (PROSEC) that seek to reduce or eliminate tariffs on several sectors.

In addition to complying with all applicable standards, foreign manufactured medical devices and healthcare products must have a legally appointed representative or distributor in Mexico that is registered with the Secretariat of Health.

Specific Import Procedures
Companies that import goods that appear on the Annex 10 of the Foreign Trade General Rules (FTGR) have to be registered in the Mexican Register of Importers in Specific Sectors. A special tax on production and services (IEPS) is assessed to the importation of alcoholic beverages, cigarettes and cigars, among others (from 25 to 160% depending on the product).
Distribution channels
Mexico has over 129 million consumers, making it the second largest market in Latin America after Brazil. The retail sector recorded current value growth of 7.7% per year and major multinationals and local companies continue to expand throughout Mexico in the different segments, signalling that opportunities will continue (USDA). The retail environment in Mexico is increasingly competitive due to fierce competition, fast expansion plans, challenges such as multichannel strategies and consumers being more demanding regarding their needs, as well as new value added services offering an interactive and unique shopping experience.

According to the Mexican Association of Nationwide Retailers (ANTAD), in 2021 general merchandise stores represented around 51% of total retail sales, followed by supermarkets (mainly groceries) with a sales share of 33%, and shoes and clothing stores representing 16% of sales. Importantly these numbers represent only “formal” retail, informal retail has a large presence in Mexico (more than 56%). Informal establishments include mobile street vendors and open public markets. These points of sale traditionally distribute local, domestic products. In 2021 there were 93 supermarket chains, with 46,643 stores throughout the country (ANTAD).

Lead retailers such as El Puerto de Liverpool SAC de CV, Copper SA de CV and Walmart de Mexico SAB de CV, among others, are expected to continue their growth and success, pushing the retail industry to grow via new outlets and e-commerce around the country. Internet retailing is the most dynamic retail channel in Mexico. New players entered the e-commerce competitive landscape, including City Market and Chedraui as well as some newly apps like "Corner Shop" and “Rappi”.

Leading retailers will need to improve their customer service in order to maintain their competitive edge. A black hole in the Mexican economy is the informal sector and this also includes the retail market. According to data from the National Survey of Occupation and Employment (ENOE) around 56 percent of the country’s workforce is in the informal sector.
Distribution market players
The top national retailers are :

•    Walmart de Mexico y Centroamerica leads the retail market in Mexico. Walmart’s main store formats include Superama (a medium size supermarket), Walmart Supercenters (hypermarkets), and Sam’s Club (warehouse clubs). As of 2022, all three business formats had internet retailing as well. Moreover, there is Bodega Aurrera, the Walmart outlet that targets lower-income consumers, with also recently entered the e-commerce subsector.
•    Oxxo, a Mexican convenience store chain, is the second largest retailer after Wal-Mart.
•    Soriana has several different formats to meet the demands of different population segments. Soriana is the third largest retail company in Mexico after Wal-Mart, with 790 outlets across Mexico. Soriana manages five store-based retailing formats: Hypermarkets (Hipermercado Soriana), supermarkets (Supermercado Soriana), discounters (Mercado Soriana and Soriana Express), convenience stores (Super City) and warehouse stores (City Club). Following the strategy of offering new products and services to its clients, Soriana started to include health centres at its hypermarkets and supermarkets, providing medical services at very low prices.

Retail Sector Organisations
Ministry of the Economy: Ministry of Industry and Commerce
Mexico National Retail Association


Operating a Business

Type of companies

Sociedad de Responsabilidad Limitada: Variable Stock Limited Liability Partnership
Number of partners: Minimum: 2; Maximum: 50
Capital (max/min): Minimum of  MXN 3,000. Each partner must bring in at least 50% at the time of its creation.
Shareholders and liability: Liability is limited to the contributed amount.
Sociedad en Nombre Colectivo: General Partnership
Number of partners: Minimum: 2. On of the partners must be designed as manager.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is unlimited and responsibility is joint.
Sociedad Anonima de Capital Variable (S.A. de C.V.): Variable Capital Limited Liability Company
Number of partners: Minimum: 2, including an administrator.
Capital (max/min): Minimum of  MXN 50,000
Shareholders and liability: Liability is limited to the contributed amount.
Sociedad Anonima (S.A.): Limited Liability Company or Corporation
Number of partners: Minimum: 2, including an administrator.
Capital (max/min): Minimum of  MXN 50,000
Shareholders and liability: Liability is limited to the contributed amount.
Setting Up a Company Mexico Latin America & Caribbean
Procedures (number) 8.0 8.0
Time (days) 8.4 25.2

Source: Doing Business - Latest available data.


Cost of Labour

Minimum Wage
In 2022, the minimum wage was increased by 22%, reaching 172.87 pesos a day.
Average Wage
Annual average gross salary: USD 16,610 in 2021 (OECD)
Social Contributions
Social Security Contributions Paid By Employers: Employers contribute to the social security system (9.934% to 24.434%), the housing fund (5%), and the retirement fund (2%), for a total of about 16.934% to 31.434% of wages. However, these contributions are deducted from the salaries of employees.
Social Security Contributions Paid By Employees: Employees contributes up to 2.727% of their salary for social security system.

Intellectual Property

National Organisations
Mexican Institute of Intellectual Property (in Spanish)
Secretaria de la Educacion Publica (in Spanish)
National Institute of Copyright (in Spanish)
Regional Organisations
World Intellectual Property Organisation
International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)


Tax Rates

Consumption Taxes

Nature of the Tax
VAT, called 'Impuesto al Valor Agregado' or 'IVA'.
Tax Rate
Reduced Tax Rate
The supply of goods and services, as well as the use or enjoyment of goods in locals or establishments located in the cross-border zone (North and South), are subject to a reduced rate of 8%.
The 0% VAT rate is applicable to a substantial number of transactions, including the exportation of goods and certain services, unprocessed food and milk; patented medicines; feminine hygiene products; etc.
Other Consumption Taxes
The Excise Tax Law (Impuesto Especial Sobre Producción y Servicios or IEPS) imposes significant federal excise rates on the importation and/or sale of specific taxable items, including gasoline (variable percentage), beer (26.5%), wine (26.5% to 53%), spirits (53%), and cigarettes and other tobacco products (160% plus an additional quota). Additionally, excise tax applies to certain services related to these activities, such as commission, mediation, and distribution of excise taxable items, as well as services for raffles and gambling (30%). Furthermore, certain telecommunications services are subject to a 3% excise tax. Soft drinks are subject to an excise tax of 1 Mexican peso (MXN) per litre, while 'junk' food incurs an 8% rate. In both cases, the excise tax is payable by the producer or importer.
The acquisition of new vehicles is subject to taxation, while the different states may impose a tax on the ownership of vehicles.

Corporate Taxes

Company Tax
Tax Rate For Foreign Companies
According to the Mexican Federal Tax Code, companies are considered Mexican residents if their principal centre of administration or the effective place of management is located in Mexico.
Capital Gains Taxation

Mexican entities are not subject to special tax treatment on capital gains; however, the use of capital losses is restricted in certain cases.
Gains on securities are included in regular taxable income.
When stocks issued by Mexican companies, securities that exclusively represent these shares, stocks issued by foreign companies listed on the Mexican stock market, and derivative financial operations based on stock indexes or the aforementioned shares are sold in recognized stock or derivative markets according to the Securities Market Law, the resulting capital gains will be subject to a 10% income tax rate.

When determining the taxable gain on real estate, the cost basis of land and buildings can be adjusted for tax purposes based on how long the assets have been held. This adjustment uses inflation factors applied to the net undepreciated balance. Non-residents who choose to pay tax on net income by appointing a legal representative in Mexico follow similar rules. The tax rate on the net gain is 35% or a lower treaty rate if applicable. Otherwise, a 25% final withholding tax on gross income applies to non-residents.

Main Allowable Deductions and Tax Credits
The applicable deduction requirements must be fulfilled by the last day of the tax year to which the deduction applies. However, the invoice supporting the expense may be provided up to the date when the tax return for the relevant period is filed or becomes due. It's essential for an expense invoice to bear a date within the year for which the deduction is being claimed.
In general, all federal, state, and local (including the municipal tax on real estate) taxes levied on a company (not including taxes on acquisitions of fixed assets and real estate and CIT) are tax-deductible expenses.

Start-up expenditure incurred prior to the commencement of business may be amortised at the yearly rate of 10%, after applying the adjustment factors. The deduction of charitable contributions is limited to 7% of the taxable income of the previous year.
Typically, interest expenses are eligible for deduction under certain conditions. These conditions encompass investing the principal in the primary activity of the Mexican taxpayer, fulfilling withholding obligations, submitting informative returns detailing the loan and transactions with related parties, adhering to thin capitalization rules (requiring a 3:1 debt-to-equity ratio), ensuring the transaction's arm's length nature, and confirming the interest payment does not resemble a deemed dividend. Additionally, there's a constraint on net interest (taxable accrued interest minus deductible interest) surpassing 30% of an adjusted taxable profit. Notably, this restriction applies solely to taxpayers whose deductible accrued interest exceeds MXN 20 million, determined on either a Mexican group or related party basis.

R&D expenditure (including investment in R&D) gives rise to a 30% tax credit. The tax credit is equal to current-year R&D expenses in excess of the average R&D expenses incurred in the previous three years.

For payments related to technical assistance, the transfer of technology, or royalties to be considered deductible, they must be made directly to companies that possess the necessary technical expertise to provide the relevant service. If payments are made to foreign affiliates, they will only be considered deductible if they adhere to the arm's-length principle.
Typically, losses can be carried forward for up to 10 years, except for deep-water operations linked to oil extraction activities, where the period extends to 15 years, all subject to relevant inflation adjustments. However, carrying losses back is not allowed.

Non-deductible items include penalties, unauthorised donations, contingencies, indemnities, goodwill, exempt salaries, etc.

Other Corporate Taxes
After their first year of operations, companies may be subject to employee profit-sharing tax (10%), as well as special excise taxes on production and services (tax losses cannot be applied against the profit-sharing base, and no later than May of the year following the year in which the profits were generated).
The transfer of real estate is subject to a tax at rates ranging from 2% to 5% on the highest of the value of the transaction, fair market value, or registered municipality value (some exceptions apply). Real property taxes are levied by the states at different rates.

Companies engaged in oil exploration and production are subject to a special tax regime as set out in the Hydrocarbons Revenue Law.

Social security contributions are based on the daily salary plus any other compensation paid to the employee, with rates varying according to the base salary of their Mexican employees and the type of concepts for which the compensation is given to the employee (ranging from 15% to 25%). For a low-risk company, the employer's maximum annual contribution is MXN 188,657. However, this limit may be higher depending on the employer's occupational risk premium, which is determined by the employer's activity. These maximum contributions apply only to employees who earn more than MXN 989,672 per year (or MXN 78,400 per month).

The acquisition of new vehicles is subject to taxation, while the different states may impose a tax on the ownership of vehicles. Mexico does not levy stamp duties.

Other Domestic Resources
Mexican Federal Tax Administration (SAT)

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
List of double taxation agreements signed by Mexico
Withholding Taxes
  • Dividends: a company distributing dividends, including those sourced from investments in renewable energy and drawn from the CUFIER account, to nonresident entities or individuals or resident individuals must withhold a final tax of 10%. This rate may be reduced for nonresidents under applicable tax treaties. Dividends originating from profits earned before December 31, 2013, and forming part of the entity's CUFIN balance by that date are exempt from withholding tax under a grandfathering provision. The 10% tax can be decreased for dividends paid to Mexican resident individuals if profits from 2014 to 2016 are reinvested and distributed from 2017 onwards. Dividends disbursed to resident companies are not subject to dividend withholding tax.
  • Interest payments to nonresident entities or individuals typically incur withholding tax ranging from 4.9% (for interest paid to foreign banks and on listed debt instruments) to 35%. However, a 40% rate applies when interest payments are made to related parties located in tax havens. Reductions in the rate or relief may be accessible under relevant tax treaties. Resident companies are exempt from withholding tax on interest payments. For resident individuals, withholding tax on interest payments may vary up to 20%, contingent on the type of interest and the beneficiary, such as financial institutions.
  • Royalties disbursed to nonresident entities or individuals are typically subject to a withholding tax of 35% (for patents and trademarks) or 25% (for other types of royalties), unless a lower rate is applicable under a relevant tax treaty. However, a 40% rate is imposed when royalties are paid to related parties situated in tax havens. In contrast, royalties paid to residents are not subject to withholding tax. Payments made for the acquisition of goods intended for commercial or industrial purposes are deemed as royalties.