In recent years, we have witnessed the construction of countless industrial parks in Mexico. The oversupply of land and government incentives make prices attractive for businesses looking to establish themselves in Central America. Furthermore, free trade agreements result in significant tax and tariff benefits for companies seeking industrial land in this Latin American country.
Mexico is the ideal country for companies looking to reduce costs when selling their products to markets in North America, Latin America, and the Caribbean.
The main reasons that can convince an entrepreneur to establish their industry in the country are: its strategic location - with more than one hundred million potential consumers -; a young and competitive workforce; an economic policy open to foreign investment and finally, attractive tax and tariff benefits, ratified by the Free Trade Agreements with North America and the European Union.
However, it's important to note that in recent years, foreign investment has shifted towards Asia. This has led to an economic downturn, which, in turn, has prompted a response from the Mexican government and its various states, who are offering investors numerous incentives to establish themselves in the country.
The opening of the real estate market
The legal acquisition of real estate in Mexico is regulated by the Foreign Investment Law of 1973. This decree recognized the importance of foreign investment in Mexico's development, a recognition that has grown over the last ten years. Since then, Mexico's industrialization process has benefited from the creation of industrial parks that contribute to the development of the country's infrastructure.
Unlike other countries, in Mexico foreigners have free access to property ownership. In the case of rentals, access is also straightforward. We simply need to contact a real estate agency to rent an office or industrial building in any of its states.
However, the procedures are different when it comes to buying real estate. This is where the so-called "restricted zone" comes into play. The Mexican Constitution establishes that "in the border zone located less than 100 kilometers from the borders, or 50 kilometers from the coasts, foreigners may not, under any circumstances, acquire direct ownership of land and water."
However, the new Mexican Foreign Investment Law of 1993 allowed the acquisition of real estate in this area through a system known as a "trust." In short, this means that a Mexican bank acquires ownership of the land and grants its use and enjoyment to the "trustee," in this case, a foreign company or individual, who can then sell the property. In these cases, all acquisition requests are processed by the Ministry of Foreign Affairs.
Differences between States
In addition to the distinction between "restricted zones" and the interior of the country, foreign companies wishing to establish themselves in Mexico must be aware of the differences that exist between the States, not only of a legal or administrative nature, but also fiscal and in terms of aid.
In several Mexican states, international competitiveness programs are being implemented, jointly promoted by the government, businesses, and private banks. For example, in the state of Guanajuato, a footwear industry cluster has been launched to leverage the advantages of industrial grouping within the same sector.
Furthermore, the so-called "March to the South Program" is currently being implemented in the country, which is causing the diversion of foreign investment to this less developed Mexican region.
Furthermore, Mexico has what is called "property tax," a tax on property that varies from state to state. Therefore, it's important to know the best location for our needs.
where to go
To delve into the business opportunities that exist in Mexico and its real estate market, we have various sources of information.
One of these companies is Entre Strategas, which provides strategic consulting services. Its mission is to help any individual or legal entity implement its expansion strategy or business project in Mexico, the country in which it specializes.
For real estate matters specifically, the best-established consulting firm in the country is Cushman & Wakefield. Its industrial division specializes in representing multinational companies that want to establish themselves in Mexico.
Another option is to contact the Mexican Association of Industrial Parks (AMPIP), an entity made up of the developers of the 150 most important industrial parks in the country.
Regarding financing, we can consult all the aid programs offered by the Mexican government through its Ministry of Economy. This ministry provides various specific funds for each type of company, depending on its size.
Also from Spain there are different plans to help internationalize businesses: the Investment Project Support Plan (PAPI); the ICO Plan; FONPYME (Fund for small and medium-sized enterprises); the PROINVEX program, for large investments; or the aid from COFIDES, the Spanish Development Finance Company, not forgetting the subsidies of the Autonomous Communities.
Finally, several international institutions, such as the Inter-American Development Bank (IDB), the Multilateral Investment Fund (MIF), and the Inter-American Investment Corporation (IIC), have funds available to help Spanish businesses establish themselves in Latin America.
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