Foreign Direct Investment

Mexico is one of the emerging countries most open to foreign direct investment, the world's ninth largest FDI recipient. In 2021, Mexico was the second largest recipient of in Central America. According to UNCTAD's 2022 World Investment Report, FDI inflows increase by 13% to USD 31.6 billion, with new equity investments in the mining and extractive industries. Furthermore, Greenfield investments increased from 304 in 2020 to 376 in 2021, with the biggest jump being in information and communication. For example, Huawei announced the opening a cloud data centre in Mexico for USD 4.5 billion. The total stock of FDI is estimated to have reached USD 578 billion in 2021. Overall, FDI inflows were affected by rising uncertainty over the government's economic agenda, its focus on fiscal austerity, and the slump in fixed investment. These factors were compounded by persistent concerns about the current administration's critical stance on public-private partnerships (PPPs) and the role of the private sector in key industries, together with the financial situation of the state-owned oil company Pemex and the massive assistance it receives from the government (valued at USD 3.5 billion). Besides, shifts in the five-year plan and in the policy of CFE, the state electricity supplier, discouraged private investment in public utilities and contributed to a 67% drop in FDI in electricity generation, transmission and distribution.
Investments mostly come from the United States, Canada, Spain, Japan, and Germany. The sectors receiving significant foreign investment are manufacturing (especially the automobile industry), financial and insurance services, transport, retail and wholesale trade, mining and quarrying, and communication. Foreign investments are mostly concentrated in towns neighbouring the U.S border (where many assembly factories are located), as well as in the capital. Thanks to its robust tourism industry, the Yucatan Peninsula also receives substantial foreign investment. FDI flows to the country fluctuate strongly depending on the arrival and departure of large international groups.

As a member of USMCA, OECD, G20, and the Pacific Alliance, Mexico is very well integrated into the world economic order, making it an attractive country for FDI. Additionally, Mexico enjoys a strategic location, a big domestic market, a wide variety of natural resources, a relatively well-qualified workforce and diversified economy. However, in recent years, Mexico's competitiveness has suffered from the rise of organised crime and lack of reforms in the energy sector and in tax regulations. Corruption and administrative inefficiency have also been major issues and the business climate continues to suffer from safety risks in the country. According to the Economist Business Environment, Mexico ranks 42 out of the 82 countries reviewed for their investment climate. Among the biggest investments that occurred in recent years is the purchase of Mexican bank ABC Capital by Argentine fintech Ualá, in 2021. However, the value of the transaction was not disclosed.