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International Business Guides Mexico International Business Guides Mexico Together we thrive HSBC International Business Guides | Mexico 2 01 Welcome 02 Mexico: A growing Welcome to Mexico international hub 03 Country profile Located between the USA and South America, Mexico is rich in history and tradition. 04 Society & culture The largest Spanish-speaking country in the world and the second most populated in 05 Working practices & values Latin America, it brings significant opportunities for multinational businesses. 06 Business etiquette 07 Economy Mexico’s considerable growth potential, and large population with a high proportion of young workers, also help 08 Labour & business position the country as an ideal international business hub. 09 Taxes & wages Often ranked as one of the world’s top emerging markets, the country’s enviable climate, picturesque coastlines, 10 Investment & trade world-renowned cuisine, deep cultural roots and relatively low cost of living all add to its appeal. 11 Infrastructure 12 Cost of living Grupo Financiero HSBC is one of the leading financial and banking groups in Mexico. Our 16,000 employees operate from over 980 branches, offering banking services to more than 8.5 million customers throughout the country. 13 HSBC in Mexico Local knowledge is vital to help tap into the vast potential that Mexico has to offer. HSBC’s strong on-the-ground presence in the country, alongside 150 years’ experience and a wealth of global capabilities, make it the perfect partner to enable international businesses to thrive. We look forward to welcoming and doing business with you! Nuno A Matos Chief Executive Officer, HSBC Mexico Contact: Head office address: Ave. Paseo de la Reforma 347, Col. Cuauhtémoc, 06500 Mexico DF, Mexico HSBC International Business Guides | Mexico 3 Essentials Mexico: A growing international hub Monterrey City GDP Currency Consistent growth Manufacturing leader Guadalajara USD9,707 per capita2 Mexican Peso Mexico has been a stable Mexico continues to grow its global Puebla City economy for a number of years. manufacturing base in a wide range Mexico City It has maintained consistent slow of industries including automotive, Main languages Time zone growth with a variety of reforms flat-screen TVs, computers and Spanish is the official UTC -6 to manage debt and invite foreign telephones due to its relatively low Capital city language, though English investors for an increasingly open cost of labour, plentiful industrial Mexico City is widely spoken economy. space in the North and attractive Typical office hours government incentives. 8.00am – 6.00pm, Well connected Other major cities Top exports Monday to Friday Mexico is connected to 60% of the Ideal trading partner Guadalajara, Puebla, Monterrey, Tijuana, Manufactured goods, world’s GDP with overland access Trade agreements and partnerships Querétaro, Juarez vehicles, automobile to the US and Central America that extend around the world, and Unemployment rate parts, oil and oil as well as to the East and West ongoing conversations with more 3.4%2 products, silver, fruits, with ports in both the Pacific and countries, makes Mexico an open Population vegetable, coffee, and Atlantic oceans. and ideal trading partner. 124 million1 cotton3 Corporation tax Focus on innovation 30%4 Mexico has increased its research Size Top imports and development (R&D) budgets 1,964,375 sq km Metalworking machines, Dialling code by 42% in less than a decade steel mill products, +52 and offers tax incentives for R&D agricultural machinery, spending and investment. electrical equipment, Sources: 1World Bank Group, 2018 automobile parts for 2 Emergency numbers Trading Economics, 2018 assembly and repair, 3Central Intelligence Agency (CIA), 2017 911 (police, fire and 4PwC, 2018 aircraft, and aircraft * ambulance services) Map shows cities of economic significance according 3 to the CIA, 2017 parts HSBC International Business Guides | Mexico 4 Country profile Mexico is known for its rich history, strong The country still has internal and external challenges. At home, there is cultural blend and distinct cuisine. But it’s a high rate of poverty, a low percentage of women participating in the workforce and some ongoing corruption and crime. Externally, there is also a significant international trade hub and uncertainty about future trade policies with the US. manufacturing powerhouse. All of that aside, the government has been successful at containing inflation and has put reforms in place to attract foreign investors, Mexico has signed 12 Free Trade Agreements (FTAs) with 45 which has led to steady growth and a positive outlook. countries around the world which are members of the Trans-Pacific Partnership (TPP). The country also has 32 Reciprocal Investment Mexico’s economy is divided into four geographic regions – the North, Promotion and Protection Agreements (RIPPAs) with another 33 North-Central, Central and South regions. countries and an additional nine agreements within the scope of the Latin American Integration Association. Read on to discover more about the dos and don’ts of doing business in Mexico. Also find out how trading in or with the country could help Mexico can provide a connection to over boost the future growth of your business. one billion consumers and 60% of the world’s GDP. HSBC International Business Guides | Mexico 5 5 reasons to do business in Mexico1 5 key challenges2 01 Well-educated workforce 01 Reliance on the US economy Mexico has a young and well-educated workforce, with a The US is Mexico’s main trade partner, its biggest market for exports and its key median age of 27.5 years. supplier. As a result, Mexico’s economic stability and growth depends a good deal on the state of the US economy. 02 Low labour costs The low cost of labour in Mexico, combined with higher 02 Crime rate productivity, is attractive to many manufacturers. While violence and organised crime has been on the decline in recent years, there are still concerns. This includes a rise in the theft of gas and oil from 03 Gateway to consumers Mexican pipelines and a 37% increase in highway freight robberies. Mexico has the Freest Trade Agreements of any country, providing a gateway to one billion consumers. 03 Gaining permits There are 10 procedures involved in getting a construction permit, which takes 04 Ripe for foreign investment around 69 days. Connecting to the water and sewerage systems alone is a Government reforms focused on encouraging foreign month-long process, and obtaining land-use and feasibility certificates can be investment have been introduced in Mexico. complicated. 05 Encouraging growth 04 Electricity access Mexico has the greatest estimated economic growth rate in Mexico is ranked 130th by the World Bank and the International Finance Latin America, projected at 2.4% for 2018. Corporation (IFC) for ease of getting electricity. The process requires a number of steps, including submitting applications for certificates and inspections from the Comisión Federal de Electricidad. 05 Paying taxes Although there are only six payments, it takes an average of 337 business hours each year for businesses to pay their taxes. The corporate tax, which is 30%, takes 155 hours alone. Sources: 1UK Government, 2017 2TMF Group, 2017 HSBC International Business Guides | Mexico 6 Society & culture In this section Language Food Religion Customs & celebrations Useful phrases HSBC International Business Guides | Mexico Society & culture 7 Language Religion Today, Spanish remains the country’s dominant language. Mexico is a secular state and an open and tolerant society that welcomes people of all faiths. While Interestingly, however, the Mexican government doesn’t recognise churches of most major religions can be found in cities, those in the provinces are typically Catholic Spanish as its official language. Instead, it has named 68 reflecting the fact that around 89% of the population is Roman Catholic. indigenous Native American languages as the country’s official ones in an effort to preserve the customs and cultures connected to them. The most common of these is Nahuatl, spoken in various dialects by 1.5 million people – primarily in Central Mexico. Other Customs & celebrations important languages are Maya, Mixteco and Zapoteco spoken by 14%, 7% and 7% of Native Americans respectively. Mexico’s Independence Day is 16th September and commemorates the “cry of independence”, which 80% of people who speak an indigenous language in Mexico also launched a revolt against Spanish rule in 1810. speak Spanish. The Day of the Dead, on 2nd November, is when Mexicans celebrate loved ones who have passed away. Also known as All Souls’ Day, people plan throughout the year for the annual fiesta by creating altars as Food well as gathering gifts and preparing food to offer up to the dead. Our Lady of Guadalupe is the country’s patron saint, and the Feast of Our Lady of Guadalupe on 12th December is Mexico’s most important religious holiday. It is believed that this was the day in 1531 that a Mexican food is so much more than tacos accompanied by a shot peasant named Juan Diego first encountered the Virgin Mary on the Hill of Tepeyac. of tequila. The country’s cuisine is steeped in tradition. Techniques for farming and preparation as well as ancient customs and manners surrounding dishes and meals have been passed down from generation to generation. As a result, Mexican cuisine was Useful phrases added to UNESCO’s Representative List of the Intangible Cultural Heritage of Humanity in 2010. English Good morning Good afternoon Good evening Goodbye How are you? Mexico is responsible for introducing chocolate, corn, tequila, and Spanish Buenos días Buenos tardes Buenos noches Adiós ¿Cómo estás? chillies to the world. HSBC International Business Guides | Mexico 8 Working practices & values Family is an important part of Mexican society and the traditional hierarchal familial structure also carries over to business. Seniority and authority are respected and Mexicans pay close attention as to how each person fits into the hierarchy – whether family, friends or business.
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