General Information

Mexico suffers from the absence of a solid legal structure and situations can change rapidly. It is therefore of the utmost importance that the investor is supported by excellent legal advice. Foreign investment is not subject to any restrictions except in the energy sector, road haulage and passenger transport by land and air forestry and media sectors. The demands of foreign investment agreements in the petroleum and electricity sectors remain complicated.

Thanks to trade agreements concluded with many countries and economic areas, including the EU since the 2000s, Mexico can be an industrial and logistics base of particular interest to all of the American market, particularly the North. After the NAFTA (with the United States and Canada) was called into question, a new free trade agreement to replace the NAFTA was signed by Mexico in November 2018 and ratified in June 2019. The agreement was also signed by the united States in January 2020 and by Canada in March 2020.

In Mexico the personalisation of trade relationships is highly important and establishing personal relationships is indispensable to success in business. During trade meetings it is the custom to solely negotiate at the equivalent hierarchical level. Consequently, to facilitate decision-making, contacts should be made directly with the decision-makers, who are often the directors of the Mexican companies.

The majority of Mexican businesses can use English but speaking Spanish is highly appreciated. It is difficult for a Mexican to say no, and for this reason the business owner must remain clear in his/her expectations and commit to a specific course. It is good to be on time but not necessarily to demand this of your Mexican contact partners.

Means of Payment & Banking Specificities

The Mexican development bank, the Nafin (Nacional Financeira) is only involved in risk-sharing, and not in providing preferred rates as it is in Brazil.

When participating in a call for tenders or signing a contract with a public entity or company linked to the Mexican State, the option of requesting a fianza, which is not a bank guarantee, must be taken into account. This is a type of local guarantee with specific regulations, and can only be issued by an afianzadora (insurance company). These entities are regulated by the CNSF (National Insurance and Surety Commission). To issue a fianza in Mexico, however, a bank counter-guarantee confirmed by a Mexican bank is required. Consult PAI for more information.