Last Update: 05/07/2021
Competitive Business Environment
Important efforts have been made by Mexico to make out of the country a competitive destination for investment, business development and productivity. Even though the international environment has been characterized by an important economic slowdown, the Mexican economy seeks to maintain a stable growth and a positive outlook for the following years. The country benefits from domestic and foreign investors’ confidence for being a safe and attractive place to invest.
Competitiveness Position and Business Environment
Mexico ranked 48th place out of 141 economies in the Global Competitiveness Report 2019 of the World Economic Forum (WEF), and is placed as one of the most competitive economies in Latin America, just behind Chile (33). Mexico shows signs of progress to continue rising in the scale in the following years. According to the WEF, Mexico’s improvement is based on the efficiency of its domestic market, its openness to domestic and foreign competition, the flexibility and incentives provided by the labor market and the easiness to access financial services.
In 2019, Mexico ranked 60th place out of 190 countries in the global classification of the Doing Business 2020 report, prepared by the World Bank Group, that measures the easiness to do business in each country. Mexico is considered to be the most competitive country in Latin America for doing business, and among the most competitive when compared with developing economies. Mexico stands out in different areas, such as: administrative procedures to open a new business, construction permits issuance, investors protection, tax payment, access to credits and simplification of foreign trade activities. This report also highlights the importance of the implementation of specific reforms that have leaned out the process for business development in the country.
Participation with Multilateral Agencies
Historically, Mexico has had an important diplomatic agenda in multilateral forums and organizations, where it participates as a promoter and leader in economic and commercial issues, among other issues.
G20
Mexico is part of the main macroeconomic policy coordination forum, among the 20 largest economies of the world, known as the G20. With this presence, the weight of the Mexican economy within the world’s economic system is recognized and the country has the possibility to participate in the most important decision-making process regarding macroeconomic and monetary policies at an international level. Within the G20 meetings various issues of interest to the country are addressed, including sustainable development, free trade, energy efficiency, food security, fight against corruption and climate change mitigation. Mexico chaired the G20 in 2012; during this period the Leaders’ Summit was held in Los Cabos, Baja California, achieving important agreements. In addition, Mexico participated as co-chair of the G20 investment and infrastructure group from 2013 to 2016.
OECD
Since 1994 Mexico is an active member of the Organisation for Economic Co-Operation and Development (OECD), a forum in which 36 country members discuss and work together, in a coordinated way to promote policies focued on improving the economic welfare of countries and people. In this forum productivity, global trade and investment flows of the country are constantly monitored under the highest international standards. This has allowed Mexico to work directly over the issues that affect competitiveness, based on best practices and international recommendations. In its 25 years of membership, Mexico’s participation in the OECD has been active and the agency has conducted studies and evaluations of the country in different fields.
WTO
Mexico is one of the 153 countries that make up the most important commercial organization at the international level: the World Trade Organization (WTO). Its objective is to administer and monitor the implementation of existing agreements, provide a forum for commercial negotiation, resolve trade disputes, examine national trade policies, cooperate with other international organizations to promote coherence in the creation of economic policies worldwide and provide technical assistance in commercial matters for developing countries. The Ministry of Economy is the one that actively represents the country in the various forums and multilateral organizations of the WTO.
APEC
Mexico is one of the 21 members of the Asia Pacific Economic Cooperation Forum (APEC), whose economies represent 61% of the world’s GDP and 49% of the world trade. The presence of Mexico in this forum promotes the country’s objectives in terms of trade liberalization, promotion of foreign direct investment, facilitation to do business, as well as technical cooperation and best practices. The attention of these subjects offers legal certainty and confidence to the economic operators of the region dedicated to business development.
International Agreements
Foreign Investment Promotion and Protection Agreements (FIPPA)
The Foreign Investment Promotion and Protection Agreements (FIPPA) promote the promotion and protection of the investment of foreigners in our country and that of Mexicans abroad, thereby directly contributing to the establishment of a favorable climate for business development . Mexico has a total of 29 FIPPAs signed.
These agreements contemplate mechanisms to resolve, through international arbitration, the possible controversies that may arise between the two countries participating in a FIPPA, in the interpretation or application of said agreement, or between the investor and the country receiving the investment, regarding the breach by the latter of the obligations contained in the agreement.
This not only provides legal certainty through national laws, but also elevates it to an international level through the Arbitration Rules of the United Nations Commission for International Trade Law, as well as those included in the International Chamber of Commerce of Paris (ICC).
For more information consult the section of Foreign Trade in the Ministry of Economy.
Double Taxation Agreements
Mexico has signed double taxation agreements with more than 40 countries around the world, which strengthens the bilateral relationship and enables offsetting tax paid in any of the signing countries against the tax payable in the other to prevent double taxation.
For more information consult the section on tax treaties and related issues of the Tax Administration Service of the Ministry of Finance.
