How to do business in Mexico – Part 1
June 6th, 2006
Introduction – In this series “ How to do business in Mexico”, I plan to provide tips, advice, things to watch out for, things to accept, and other related matters about how to do business with Mexico. I cannot tell you if working in or doing with Mexico is good or bad. There are benefits, disadvantages and risks. I know success stories and failures, but I strongly believe that if you have this information, doing business will be easier, with less problems, and will be more efficient.
Mexico is an immense country, with enormous economic and social contrasts, thousands of cultural and regional differences, and a complex history that probably can never be understood completely by the foreign business person.
How to do business in Mexico, Part 2
June 6th, 2006
Regional Generalizations – Huge Broad Sweeping Statements about Mexico
Mexico can be roughly divided into four major and distinct economic and cultural area, the North, Central, South and Border-towns and Tourist areas.
North – The Northern region has assimilated many habits and customs of the USA, many of the maquiladoras (toll manufacturing factories) are located here, business has a “familiar” feel to it, good infrastructure, there is a sense of urgency and competitiveness when doing business. Many of the most important companies in Mexico were founded in the Northern States. Generally conservative in their choice of government.
Central – The Central region is more “provincial”. Business moves slower than in the North. This region is growing by leaps and bounds as state and local governments are promoting foreign investment and investing in infrastructure. Traditionally conservative and stable in politics (actually the Mexican revolution began here) and business. Values are similar or comparable to the Mid-west in the US.
South – The Southern region is the most underdeveloped region in Mexico, and the lowest level of infrastructure, this include the tropical forests, many indigenous groups, and the highest level of extreme poverty. Not surprisingly the politics are more socialistic or liberal than the rest of Mexico.
Border-towns and Tourist Towns – This is the Mexico many people know, and they unfortunately use these towns to make judgements about the rest of the country, people, work-habits, etc.. This would be equivalent to saying that Las Vegas, Nevada provides a complete and excellent representation of any town, state or region in the USA.
How to do business in Mexico, Part 3
June 6th, 2006
It’s all about people and relationships
Business in Mexico is all about relationships and people. It is important to attend lunches or dinners with your potential customers, major suppliers, distributors and agents. If invited to weddings, or family events, it is important to attend.
These social occasions help to deepen relationships, and promote understanding, an integral part of doing long term business in Mexico.
The Mexicans use family and personal networks for business. The contacts generated through these networks are considered “trust-worthy”. The faster you establish genuine personal and social relationships in Mexico, the more you will recommended, and it will become easier to do business.
Business trips to meet and discuss issues and problems with suppliers, customers and partners, should be programmed at least twice a year, and I would recommend much more frequently when starting up a new operation or business.
How to do Business in Mexico, Part 4
June 6th, 2006
Do you speak Spanish?
If the answer is no, and you want to really be successful in your Mexican endeavors, please learn to speak Spanish. It doesn’t have to be business oriented language training, but you should be able to hold a conversation over lunch or in a relaxed environment.
Sure you can get by with English, and many people will be happy to practice with you once you arrive in Mexico.
But to really understand the Mexican business and social culture, I highly recommend you learn how to carry on a conversation in Spanish. It shows your intention to learn and understand the Mexican culture…and Mexican business people see this as a big effort on your part, and it will be appreciated.
If you cannot speak the language, and are serious about working in Mexico, hire one or bring someone from your company who can speak Spanish. Ask your Mexican counterparts if they would be more comfortable with a translator present, and if they could arrange for one.
Language is nothing more than another barrier to doing international business, but add this hurdle to the “other” barriers (cultural, economic, social, educational) and suddenly doing business internationally seems like a difficult proposition.
How to do Business in Mexico, Part 5
June 7th, 2006
Lunches and Dinners
The “normal” time to eat lunch (comida) in Mexico is between 2:00 and 4:00 PM, this is the major meal of the day. In most small to medium sized cities, people go home and eat with their families, and return to work from 5:00 until 8:00 PM.
A business lunch (comida) can last 1.5 – 6+ hours, depending upon your group. Business conversation will likely occur before and during the meal, but usually the conversation will turn to other themes after dinner.
Dinners (cena) begin after 8:30 PM, and usually not a heavy meal. During the week may last an hour or 1.5 hours. If on the weekend can last 3-5 hours.
How to do Business in Mexico, Part 6
June 7th, 2006
Things NOT to talk about
I would recommend listening and watching others before making any comments or bringing up potentially “difficult” themes (religion, politics, abortion, immigration). Get a feel for your group and their interests (and opinions) before blundering in your comments, criticisms and “great ideas”. Be very careful NOT to bluster, rant and rave or carry on about how magnificent and wonderful the US is compared to Mexico.
If asked your personal opinion about a “difficult” theme, be honest, but remember to keep it light and brief. Many Mexicans want you to explain US government policies and culture, immigration decisions, economic policies…. if this is not possible, be honest and don’t enter areas of conflict or spread misinformation.
How to do Business in Mexico, Part 7
June 7th, 2006
Business Management Mentality & Business Consultants
The majority of businesses in Mexico are family owned, and the focus of many current managers and business owners is geared toward running a family business or maximizing profit in a short defined period, as opposed to long-term growth and investment. This affects, and can undermine, many business decisions and relationships.
Important decisions related to; investments, planning and strategy, risk evaluation, and day-to-day operations may be stalled or create significant problems unless everyone is in agreement on the goals and objectives, investment and planning required.
There is a current boom for business management consultants, management courses and management seminars throughout Mexico, as the lack of “corporate “managerial skills are being identified and addressed by business owners and shareholders.
In general, the culture of hiring and using business consultants in Mexico is limited to the industry leaders, “forward thinking” pioneers, trans-national companies or existing Mexican companies currently involved in some sort of crisis.
How to do Business in Mexico, Part 8
June 8th, 2006
Family Life
Mexicans consider family life and family events to be incredibly important, taking priority over work in almost all situations.
They expect their employers to understand the importance of these relationships and make any necessary accommodations for major events.
How to do Business in Mexico, Part 9
June 8th, 2006
Individuals, not natural team players
Mexicans are independent, and more comfortable doing it alone and doing it their way. Everyone wants to call their own shots, run their own business, make their own agenda. It can be very frustrating if you are used to strict discipline and adherence to a rule book.
This natural independence is great if you are seeking alternative methods, creative solutions, flexibility, and quick responses from your people.
Mexicans do not discourage teamwork, on the contrary, there are great opportunities to teach, support and reward group activity. Many of the most successful companies in Mexico have been able to implement teamwork and productive interactive systems. If you can harness and incorporate this individuality WITHIN your business structure, you will have a very successful adventure.
Take a look at the results of Mexicans in individual vs. team sports on an international level.
Mexicans excel at boxing, speed walking, cycling, long distance running, diving…individual sports.
Team sports, football, soccer, baseball, volleyball, rugby, and basketball are dominated by other countries and cultures.
How to do Business in Mexico, Part 10
June 8th, 2006
Criticism
Be very careful of how, and how aggressively, you criticize anyone, their way of life, religion, government or methods of doing business, especially in a social environment. You may believe it is constructive, but until you create a relationship based on mutual respect, this will be seen as very negative (and ethnocentric). If you absolutely have to comment, better to ask why something is done in a certain way, let your hosts explain it, don’t pass judgment.
Form is important. How you are doing it counts, as well as the message. This is quite different from the US, failure to pay attention to the “delivery” may cause more problems than you expect.
If the criticism is specifically related to business processes or results, explain what you wish to achieve, how you want them to modify their actions or processes and why.
Focus on the expected results and ask for feedback and their observations on how to achieve the objective in Mexico.
How to do Business in Mexico, Part 11
June 9th, 2006
Politics and Political Parties
There are 3 main political parties in Mexico, the Institutional Revolutionary Party (PRI), the National Action Party (PAN) and the Party of the Democratic Revolution (PRD).
The PRI was the ruling party in Mexico for 70 years until their recent defeat in 2000 to the PAN. Similar to the Democrats in the USA, with a platform that believes that big government is good government. Infrastructure development and social programs are viewed as job creation in and of itself. Currently in the process of breakup and re-organization, with long time members leaving for the other 2 parties. Viewed as liberal in their philosophy and orientation.
The PAN party is similar to the Republicans in the USA. Won a historic and overwhelming victory against the PRI in 2000. They believe government’s role is to help increase private industry growth and create conditions and infrastructure to support continued growth. Infrastructure projects are viewed as necessary in order to increase competitiveness. Viewed as conservative or right wing in their philosophy and orientation.
The PRD is party formed during the time of the PRI rule in Mexico, by more liberal members of the PRI. Known as the most socialistic of the parties. Seeking entirely new economic models that focus upon redistribution of wealth. Viewed as extreme liberals or socialists.
How to do Business in Mexico, Part 12
June 12th, 2006
Working Hours
A normal work week for a most Mexicans consists of 44 to 48 hours. Eight hours a day Monday-Friday and 6 hours on Saturday.
Office jobs in Mexico City, Monterrey and Guadalajara have business hours from 8:30 AM – 5:30 PM, or 9:00 AM – 6:00 PM, similar to the US. Generally they work Monday – Friday.
In the medium and small cities in Mexico, all businesses open at 9:00 or 10:00, close from 2:30 to 4:30, and re-open from 4:30 until 8:00 PM.
Most retail stores, malls and supermarkets, are open from 8:00 AM – 9:00 AM and close around 9:00 or 10:00 PM, 7 days a week.
Restaurants will open for; breakfast between 7:00 AM – 11:30 AM, comida 2:00 PM – 5:30 PM, and cena 8:00 PM – 11:00 PM.
How to do Business in Mexico, Part 13
June 13th, 2006
Taxes
The national tax authority in Mexico is called the “Hacienda”. This is similar in function to the Internal Revenue Service in the US. The tax system in Mexico is complicated, with strict controls on transfer pricing for transnational companies, and limited tax advantages for companies seeking to avoid taxes by re-investing in their existing businesses.
Claudia Avila Connelly of AMPIP provided the following information about taxation in Mexico:
The taxation system in Mexico is primarily concentrated in the federal system. The three primary taxes are the I.S.R. (Impuesto Sobre la Renta) which is a proportion of salary, IMPAC (Impuesto al Activo) tax on assets, and I.V.A. (Impuesto a Valor Aggregado) a value added sales tax of 15%.
At the state level the only tax is the I.S.N. (Impuesto sobre Nomina), tax based upon payroll, this rate varies between states. For example in Queretaro there is no I.S.N, while in other Mexican states might vary between 0% – 2%. This may be waived depending upon the social impact and generation of employment by the investment project Other costs at the state level that may be negotiated would be the public property registration, which represents a percentage of 2% to 5% of the value of the building.
At the municipal level the only tax that exists is the Predial (property tax). There are other costs related to the construction license and title change. All of these can be negotiated as incentives but any concession granted to the investor, must be previously approved by the local town administration, with evidence of the session minutes where it is clearly stated that the concession has been granted by the administration, and signed by all members.
It is the employer’s responsibility to retain, pay, and report the taxes and income for workers (unless they are private contractors).The average Mexican worker will not ever have to fill out an income tax form.
The difference in tax law between the US and Mexico is enormous. One of the most frightening aspects for US trained accounts is that there are modifications to the Mexican tax code every month. This means that your accountants must update their knowledge of the tax code and the changes on a monthly basis.
As with all tax laws, there are “grey areas” that will be interpreted differently by the tax authority and the entrepreneurs and corporations.
Mexico has a huge underground economy, with estimates that up to 60% of the commerce and services are not registered with “Hacienda”, and do not pay taxes. This puts pressure on the legally registered businesses, and Hacienda seeks to audit and verify that those registered business are conforming. This has caused a great deal of controversy, and the term “fiscal or tax terrorism” has been used by angry businessmen who want “Hacienda” to focus their efforts incorporating those businesses outside of the system, instead of re-auditing those who are captive in the system.
Tax reform is a big issue currently in Mexico, and I believe that in the near future steps and legislation will be introduced and approved to simplify the tax code and streamline the system.
I strongly recommend a good accountant, a good internal auditor and a good external auditor for any business dealings in Mexico.
Leon, Guanajuato – Footware and Shoe Industry contacts
June 21st, 2006
I live in Leon, Guanajuato, Mexico….which might mean nothing to you unless you are involved in the leather industry or shoe business. Leon is home to for the majority of the leather tanneries and shoe factories in Mexico.
For those of you seeking industry contacts, here is a brief list of links to the major shoe related organizations in Mexico.
The biggest and most important international shoe fair in Mexico. Held two times per year. Spring/Summer and Fall/Winter.
The Mexican Shoe Association in the State of Guanajuato.
- The National Association of Suppliers for the Footware Industry.
If you want to find reliable exporters of shoes, leather, and leather goods contact COFOCE. Highly recommended.
State Government of Guanajuato
Good overview of the State of Guanajuato, business opportunities and contact information for government and industry.
For more information or consulting assistance, do not hesitate to contact me.
Related Link: Mexican Shoe Manufacturing on Squidoo
How to do business in Mexico, Part 14
June 22nd, 2006
General reference links for doing business in Mexico
Mexican state governments are actively seeking investors and FDI (Foreign Direct Investment).
The Economic Development Secretary in every state is willing to offer land, infrastructure, tax benefits and assistance with Federal and State bureaucracy in order to get your company to settle in their state.
This is a great way to get “free” advice regarding the requirements for business set-up and an honest overview of costs and time required to get your business up and running.
They will also assist in the search for Mexican partners or investors if required.
More links to help you with your Mexican business adventure.
BANCOMEXT Official Mexican government link offering statistics and “how to” advice regarding business investment in Mexico.
U.S. Commercial Service Mexico: How to do business in Mexico The U.S. Commercial Service in Mexico offers market research, consulting, trade events, and matchmaking services to help U.S. companies do business in Mexico, export goods and services to Mexico, and find Mexican business partners and distributors.
Doing Business in Mexico Good overview regarding legal structure for doing business in Mexico
Competitiveness World Bank Analysis by the World Bank on Mexico’s competitiveness against other countries
CIA – The World Factbook — Mexico Good overview of Mexico, politics, geography, strengths and weaknesses.
How to do business in Mexico, Part 14
June 22nd, 2006
General reference links for doing business in Mexico
Mexican state governments are actively seeking investors and FDI (Foreign Direct Investment).
The Economic Development Secretary in every state is willing to offer land, infrastructure, tax benefits and assistance with Federal and State bureaucracy in order to get your company to settle in their state.
This is a great way to get “free” advice regarding the requirements for business set-up and an honest overview of costs and time required to get your business up and running.
They will also assist in the search for Mexican partners or investors if required.
More links to help you with your Mexican business adventure.
BANCOMEXT Official Mexican government link offering statistics and “how to” advice regarding business investment in Mexico.
U.S. Commercial Service Mexico: How to do business in Mexico The U.S. Commercial Service in Mexico offers market research, consulting, trade events, and matchmaking services to help U.S. companies do business in Mexico, export goods and services to Mexico, and find Mexican business partners and distributors.
Doing Business in Mexico Good overview regarding legal structure for doing business in Mexico
Competitiveness World BankAnalysis by the World Bank on Mexico’s competitiveness against other countries.
CIA – The World Factbook — Mexico Good overview of Mexico, politics, geography, strengths and weaknesses.
Reference: How to do business in Mexico: Lee Iwan
How to do business in Mexico, Part 15
June 22nd, 2006
Mexican law and legal overview
Legal advice is necessary and extremely important when doing business anywhere. Get a good lawyer and use them to help in setting up your business. The Mexican law is different from US law, not better or worse, just different. Hire good counsel and use them in setting up or modifying your business.
Legal links for doing business in Mexico
- Mexican Law with Professor Jorge A. Vargas
- The most authoritative, current and comprehensive book on Mexican law regarding business, investment and international trade in that country.
- GUIDE TO LAW ONLINE: Mexico
- The Guide to Law Online is an annotated compendium of sources accessible through the Internet. Links provide access to primary documents, legal commentary, and general government information about specific jurisdictions and topics.
- GlobaLex – Electronic Guide to Mexican Law
- Good resource
Reference: Doing Business in Mexico: Lee Iwan
How to do Business in Mexico, Part 16
June 26th, 2006
Payments, Invoices and Banking
There is a huge underground economy in Mexico, no invoices, no taxes, no paperwork. Estimates of the size of the underground economy run as high as 60% of the GNP of Mexico. At some time you will be confronted with a person or business who provides services or products and will ask if you want an invoice or not…..with a difference of 15% in the final cost if you chose to avoid the invoice (no invoice = not tax deductible). This 15% is the I.V.A. (national value added tax). Avoiding the I.V.A. is illegal. Estimates of the size of the underground economy run as high as 60% of the GNP of Mexico.
Sending checks as payments through the mail is virtually unknown in Mexico. Due to the problems with mail theft and fraudulent checks, the majority of business checks are hand delivered. There are an army of men and women, who physically go to customer’s offices, drop off the invoices, and come back for the payment check at a later date. Totally inefficient in terms of costs and time, however that’s the way the system works in Mexico.
Electronic payments and funds transfers have begun to appear in the last 5 years, and the larger companies are now using this system for payments and receivables. There is a very large percentage of Mexican businessmen who are not confident of the security and password controls (there have been numerous cases of e-bank fraud).
It is necessary to physically appear in your bank to make routine deposits, withdrawals, changes or modifications to your accounts. This seems odd to U.S. citizens. The banking system in Mexico depends heavily upon providing personal identification for each transaction, and it is highly recommended to establish a relationship with your bank officials and tellers in order to facilitate business. The ATM banking machines are becoming part of everyday life for all Mexicans, and direct payroll deposits to employees accounts are now very common among medium and large companies.
How to do business in Mexico, Part 17
June 28th, 2006
The Mexican Institute for Competitiveness (IMCO) is a private think-tank and great source for macro-economic information about how Mexico ranks in competitiveness with countries globally.
IMCO, The Mexican Institute for Competitiveness
“The Mexican Institute for Competitiveness (IMCO) is a private applied research center devoted to studying issues that affect the country’s enterprises competitiveness in a context of open market economy. IMCO is a non-profitable, independent, non-partisan institution which operates thanks to private sponsors grants.”
IMCO is actively working with and educating Mexican government officials and private industry leaders as to Mexico’s advantages and disadvantages as it concerns global competitiveness.
Most of the site is available in English.
For more information:
Instituto Mexicano para la Competividad, A.C.
Leibnitz 11 – 602
Colonia Anzures, CP 11590, Mexico D.F., MEXICO
Tel. +52 (55) 5985-1017 to 19 and 5985-0249 to 50
Fax +52 (55) 5985-0251
Email Contacto@imco.org.mx
How to do Business in Mexico, Part 18
June 28th, 2006
US Commercial Service Reference
The US Commercial Service has a nice introductory reference on how to do business in Mexico. It is directed at US exporters wishing to sell their products in Mexico. There are some links to on-line Mexican Industry reports.
BUYUSA.GOV US Commercial Service Doing Business in Mexico
How to do business in Mexico, Part 19
June 29th, 2006
American Chamber / Mexico
“AMERICAN CHAMBER OF COMMERCE OF MEXICO, A.C.
is an independent non-profit organization dedicated to the representation, promotion, and development of business interests between Mexico and the United States. Founded in 1917, American Chamber/Mexico is the largest and oldest American Chamber of Commerce outside of the United States, serving the business community in the promotion of trade and commerce. Our main office is located in Mexico City with offices in Guadalajara and Monterrey.”Mexico City: Lucerna 78, Colonia Juarez, C.P 06600, Mexico D.F. Tel. +52 (55) 5141-3800, Fax +52 (55) 5703-2911
Guadalajara: Av. Moctezuma 442, Colonia Jardines del Sol, CP 45050, Zapopan, Jalisco Tel. +52 (33) 3634-6606, Fax +52 (33) 3634-7374
Monterrey: Rio Manzanares 434 Oriente, Colonia Del Valle, C.P 66220, Garza Garcia, N.L Tel. +52 (81) 8114-2000, Fax +52-(81) 8114-2100
Link:
American Chamber in Mexico
How to do business in Mexico, Part 20
June 29th, 2006
Doingbusiness, Benchmarking business regulations
This link explores Mexico and provides business regulation benchmarks as compared to other countries. Provides profiles and comparisons of 155 countries, including Mexico. Topics include;
Starting a business
Dealing with Licenses
Employing Workers
Registering Property
Getting Credit
Protecting Investors
Paying Taxes
Trading across Borders
Enforcing Contracts
Closing a Business
Economy Characteristics
For a Mexican business economy snapshot: Doingbusiness Mexico snapshot
Link:
Doingbusiness.org
How to do business in Mexico, Part 21
June 29th, 2006
BANCOMEXT, Invest in Mexico
BANCOMEXT has a terrific site in English, that provides information about investing in Mexico. BANCOMEXT is a government agency dedicated to the growth of Mexican business, especially small and medium businesses. They seek to increase their participation in global markets by offering integral solutions to increase their competitiveness and create investment, through access to financing and other financial and promotional services.
Topics include:
Why Mexico Link
State Information Link
Sectors Link
Legal Link
Opportunities Link
Business Center Link
Cost Simulator Link
Projects, international investment interests concerning Mexico Link
Link:
Invest in Mexico, BANCOMEXT
How to do business in Mexico, Part 22
June 29th, 2006
Text of all existing Mexican Laws, in Spanish
This link will take you to the website of the Camara de Diputados in Mexico (similar to the House of Representatives in the US).
This is a complete list of all Mexican Federal Laws currently active. Archives are available in PDF, Word and Zip formats for download.
How to do business in Mexico, Part 23
June 29th, 2006
An Electronic Guide to Mexican Law
The Hauser Global Law School Program has provided An Electronic Guide to Mexican Law, written by Francisco A. Avalos and Elisa Donnadieu, published in November, 2005 Link
Topics include:
A Brief History of the Mexican Legal System Link
Federal Government Link
Major Primary Federal Legislation Link
Legislation Sources Link
Official Mexican Government Websites Link
Political Parties Link
State Governments Link
NAFTA Link
Overall Coverage of Mexico Link
Free Translation Sites Link
Related Links:
An Electronic Guide to Mexican Law
How to do business in Mexico, Part 24
June 29th, 2006
Mexican Tax Law
A brief overview of Mexican Tax Law is available at Solutionsabroad Link.
Be aware the Mexican tax law is somewhat liquid and subject to monthy changes by Congress. This information should serve as a general guide to Mexican tax law, be sure to check with Mexican legal and financial experts before signing the deal.
Related Links:
Mexican Tax Law – Solutionsabroad
Solutionsabroad.com
How to do business in Mexico, Part 25
June 29th, 2006
Basic Guide for Foreign Investors – Mexico
The Trade Commission of Mexico in Los Angeles, Mexico Information Center for North America, has a great legal guide for businesses or investors thinking about doing business in Mexico.
Basic Guide for Foreign Investors Link
Lots of good information here, and with an office in Los Angeles, easy to contact for more information.
Trade Commission of Mexico in Los Angeles
50 South Figueroa Street, Suite 296
Los Angeles, CA 90071
Tel (213) 628-1220
Fax (213) 628-8466
Email tcom@mexico-trade.com
Related Links:
Basic Guide for Foreign Investors, Mexico
Mexico Information Center for North America
Goodrich, Riquelme y Asociados
Mexico Business Opportunities and Legal Framework
How to do business in Mexico, Part 26
June 29th, 2006
Mexico Business Framework, Immigration Law, Corporate Practices, Incorporation Checklist
David Spencer has an excellent site outlining Mexican law, forms of doing business, corporate practices, working with Mexican legal counsel, immigration law and basic taxation rules and regulations.
Really great information here:
Mexico Business Framework Link
Incorporation Checklist for Mexico Link
The Immigration Law of Mexico Link
Mexico’s Code of Best Corporate Practices Link
Working with Local Counsel in Mexico Link
Related Links:
DavidSpencerLaw.com Link
How to do business in Mexico, Part 27
June 30th, 2006
Visas for Mexico, FM-T, FM-2, FM-3, Immigration information
All countries require some sort of immigration process, and Mexico is no different. In fact, Mexico has a strict immigration policy, but it is not impossible, and for the most part can be handled without lawyers or specialists.
Basically there are 3 major types of Visas, and various other subsets and variations available:
FM-T – Tourist visa.
FM-2 – Visa for those who wish to reside permanently in Mexico.
FM-3 – Visa for those who wish to work or reside in Mexico, this is an annually renewed document.
I strongly suggest you contact the nearest Mexican embassy or consulate to get the most up-to-date information and forms.
Get an official idea of what is necessary for immigration from the Counsel General of Mexico office in New York. Counsel General of Mexico in New York Link
Other good references can be found here:
How to do business in Mexico, Part 28
June 30th, 2006
Mexican Embassies and Mexican Consulates Worldwide
The Mexican embassy or consulate near you will be able to provide advice about immigration visas or other official rules, regulations and requirements in Mexico. The are NOT there to promote commercial interests of Mexico, but can put you in touch with other agencies or companies that will be able to help.
This information comes directly from the SRE (Secretaria de Relaciones Exteriores), which is responsible for the Mexican embassies and consulates worldwide. In English, this office is known as the Mexican Ministry of Foreign Affairs.
Related Links:
Mexican Ministry of Foreign Affairs
June 2007
How to do business in Mexico, Part 28
Remember the 3 martini lunch from the 1960’s?
According to this article from Reuters, Power Omeletes kill Mexico’s boozy business lunch. Mexico’s mid-day business dinner with cocktails is evolving into a more efficient, non-alcoholic breakfast.
I’ve seen a move to more breakfast meetings in Mexico.
They are more efficient and focused, much shorter,less expensive, no alcohol is involved and it’s a great way to start the business day..
Related Links
Power Omeletes kill Mexico’s boozy business lunch
Lunches and Dinners
Lee Iwan Accumulated Experience 
There are two additional topics that novices should be made aware of. First is the “bite” or mordida (read bribe) often required to facilitate your business. The second is outright fraud on the part of unscrupulous Mexican partners, buyers, sellers, etc. Please understand, I love Mexico and my wife and daughter are Mexican. Having been in the land development business in Mexico for 20 years; having paid a few hundred thousand to government officials; and finally, having being swindled out of $10,000,00 in real estate by a “reputable” Mexican developer has taught me to be extremely careful in all negotiations. Merely start with the premise that everyone has a price: attorneys, judges, and public officials. Should anyone care for particulars, or the name of the Guadalajara developer to be aware of, I will be pleased to provide additional information. It is a wonderful country with a wealth of dedicated, loyal workers. However, a move up to politicians and greedy business entreprenuers is a totally different environment – Caveat Emptor. LJM
Dear Lee,
First of all, thank you for an informative web blog. I learnt a lot just from your experiences. Although, I have not fully read everything I will go back now and again to get more info on other related subjects on Mexico. I also need to ask a question about manufacturing companies from Mexico. My question is whether there is manufacturers of cribs and babies accessories in Mexico or can these only be found mostly in China. If there are manufacturers available in Mexico, how do I further get info on their whereabouts. I would only be more interested in Manufacturers closer to the U.S. as you have mentioned on your site that they run their business at a more competitive and faster rate than any other states of Mexico.
Regards,
ML
Thank you for this information, I’ve found it most useful and insightful.
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Great website with a lot of information , still have a question .
Im taking over a interior design business, and the owner , estate agent , attorny , accountant all tell me its no problem to just buy the business get my papers and run it .
Now i read on many different sites that: “the Mexican government prohibits foreigners from doing work that Mexicans are capable of and available to do ” so i guess i cant run my business myself.
i’m not intend to have a mexican partner so i must be able to work myself
Hopefully you have any advice on this matter
Regards victor
Victor,
First step is to contact the city or state (or both) Economic Development Secretary (Secretaria de Desarrollo Economico) or Investment Attraction Secretary. They will help with the rules and regulations, they like foreign investment at any level. They are searching for foreigners who will invest in their state or city…they can provide basic information, legal contacts, help with red-tape…this depends greatly on the state you are in, but give it a try.
Ask all your questions here, and see what answers you get, and what still needs to be answered.
Immigration. This is also helpful if you have some references from the State and Local Economic Development people. Immigration is a Federal matter, and the current rules in Mexico allow 100% ownership of a Mexican business. There is paperwork involved, fairly simple, and annual renewal and declarations. But the law allows foreign ownership of companies as long as they are not related to national defense or the land in in the frontier areas (beaches and US border).
You need to work in Mexico with a FM-2 o FM-3 visa. To get this you must apply to the Immigration officials in Mexico, it is a lengthy process, but not difficult, it pays to hire an specialized immigration attorney, but the fees should not be expensive. Failure to get the correct visa is disaster, when you come to Mexico you should have the process working or underway. Go to your nearest Mexican embassy to where you live, they will help here. Get started on this today.
Get an attorney for the sale and purchase for the business, they will also (or should) provide the necessary information required for your work status and documentation required.
That should get you started,
Lee
Hello Lee,
I have a couple of questions regarding negotiating in South America, especially Mexico. I am doing a paper for my degree at New York University. All other sites I have seen point to generalizations in the way people in South America negotiate. I would like to get your ideas on what the differences are in negotiating styles between the South American countries, or even between the four different regions you mention in Mexico. Any insight would be greatly appreciated.
Thank you
Richard
Dear Sir/madam
I am doing business in Nepal and i am thinking to expand my business in Mexico, For your kind Information this is the first name of country which i have heard when i was kids. Now i have got more information abuot Mexico from your site but i want to know the climate cause i am thinking to start clothing business & i want to know the relationship between nepal and mexico.
Hopefully you have any advice on this matter.
Good Day Sarad,
Thank you for reading my blog and writing for more information.
To my knowledge there are no formal treaties or trade agreements between Nepal and Mexico. This means that merchandise is subject to higher import duties (in some cases equal to countries with free trade agreements). View this link http://www.mofa.gov.np/bilateral/nepal-mexico.php
It is very important to determine the correct H.S. code for your products, (Harmonized System Code) to determine if there are restrictions or quotas on the import of materials to Mexico. In the case of clothing, shoes, automobiles and energy products, there are specific country cuotas which apply to specific H.S. codes..
It would be of great help if you could provide the correct H.S. code number of the clothing items.
Mexico is a varied climate, considered primarily sub-tropical to tropical, but the bulk of the population lives in a climate very similar to temperate-sub-tropical. This means winters that might near 0 C in the evening and 15 C during the day.
In the north and mountainous regions it will get colder, and there is some snow…but never bitter cold for extended periods.
Summers range between 25-35 C, and extreme heat in the North can reach in the 40’s C.
Normally the people in Mexico City, 30 million people, use a light jacket or sweater year round.
Hope this helps!. More information can be found on weather sites such as the weather channel and weatherunderground.
Also contact the Mexican embassy and consulate in India/Nepal for more information:
Mexico Embassy , Nepal
D-26, Sardar Patel Marg
Postal Code:
110 021
Chanakyapuri
New Delhi
India
Phone:
+91-11-4107182
+91-11-84
Fax:
+91-11-4107185
Email:
embamexindia@touchtelindia.net
Mexico Consulate , Nepal
Himalayan Journey
PO Box 989 Kathmandu
Kathmandu
Nepal
Phone:
(977-1) 412 971
Fax:
(977-1) 418 182
Thank you once again…please let me know if you need assistance in making contacts in Mexico for your business.
Best Regards,
Lee
We are looking for information on how to incorporate a foreign business enterprise in Mexico. For example steps such as registering with Mexican authority, obtaining licenses, Tax issues, Environmental matters and so on.
We are one of the largest lead recycling companies in the world. Since our finished product (which is lead) falls under hazardous material category, so we will highly appreciate if someone with prior experience in obtaining licenses for hazardous material in Mexico may provide us with detailed information as to how to obtain environmental permits in Mexico.
Please include name of the law firms actively involved in acquiring environmental permits.
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[…] How to do business in Mexico […]
I’m using this website as research for a paper I’m writing and was wondering if there was a paticular person who wrote the information on this page so I could use it for citing purposes.
I wrote all the information on the website (Lee Iwan Accumulated Experience and Business South of the Border) regarding doing business in Mexico, and all material generated by others is clearly mentioned and hyperlinked in each article.
Thank you for providing the practical guide to doing business in Mexico.
I am interested in conducting English business correspondence training in Mexico. Is there a particular site to visit to determine training needs and determine qualifications? What is the best way to get in the “front” door with only conversational Spanish?
lee, great info. i need your opinion concerning moving to leon probably Jan. 2010. my wife is a orthodontist from Colombia and she is considering attending the La Salle univ. dental program so ahe can practice in the US. my questions are what could i do for employment? i am a bond broker at present but have a degree in Idustrial Engineering and worked as a consultant for about 8 years in a variety of industries. would finding a position in Leon be very difficult?
‘Thanks for any help or guidance you can provide, Charles
Lee, Thanks for all your assistance regading doing business in Mexico. I’m from Australia and doing some research regarding bring to Mexico agriculture and green energy products. I beleive politics influence how market operates. Where can I able to find information about current Mexico politics related to my business?
Thanks for your assistance
Lee, first of all thank you for the helpful resources. I have a few questions for you. I am opening a small company in Colima mexico. I am having a very hard time finding an economical way to export my product. Even in the yellowpages here there are ZERO trucking, or customs companies, with guadalajara so close, where can i find a list of trucking or freight companies?
also ive tried online too, cant find anything!
My partner is a citizen and graphic designer in Mexico and I a US citizen and designer. We want to join forces and start a spin off of the two businesses. All of our service is electronic delivery. We’re looking for any and all advice.
Thanks
I live in Leon Gto. Mexico
And as you can see its the best place where you can find all types of shoes…etc. And i want to start to export to the USA ; Can you give me any advice. How can a start? I read your experience and i really think you know how…. Thank You ….and i hope you do responde
Thank you for all the information. Do you have the names of any attorneys in Dallas, Tx that you would consider to set up a corporation in Mexico?
[…] in Mexico at any rate, the economies in these nations have been abysmal. The recent entry of many US businesses in Mexico, because of NAFTA, has recently seen the rise of numerous Labor Unions in Mexico and […]
Hola!!!…quiero hacer una consulta…existen señales que tienen los Mexicanos y que otros no entienden a primera vista en los negocios?
Ejemplo…los japoneses cuando mueven la cabeza de izquierda a derecha en el momento que uno le presenta alguna propuesta de negocios significa que tienen “0” interés”
Muchas gracias
Lee thank you so much, as this article has helped me more than you will ever know. I work for a specialized school in the U. S. We are planning a trip in early 2016, to recruit Mexican students to our school. I emailed the Mexican Chamber of Commerce, from the information you provided. I have not hear back. I am needing to know what are the requirements for us to hold seminars in Mexico City and Monterrey to recruit for our school? Would this be actually considered doing business since the actual business takes place in the U. S. ? I am assuming there are some sort of documents that we will need to apply for and pay for in order to do this. Any direction you can send me in would be a great help.
There are NO reporting requirements or permissions required for you to give promotional seminars or sell your services in the USA or Canada. As the actual payment is received in your country of origin, there in nothing you need to do with the Mexican government.
You may want to apply for a business visa to enter Mexico to avoid any conflicts, but even this is discretionary in my opinion.
Good luck!
Lee
Thank you so much!