How to Start a Business in Mexico: Legal Tips, Market Insights & Growth Opportunities | Nearshore Cafe

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Alono: Hey, I’m Alono Gimenez, and welcome to the New Shore Cafe podcast, where we explore nearshore business opportunities. Today, we’re going to discuss a topic that I really love to share with you: how to do business in Mexico. This is very important because Mexico is a trendy country, and I believe that a few years ago, it was not like this. But now, it’s a very huge opportunity to come and make business in Mexico. We are going to talk about some pros, cons, and practical steps that maybe you can use to navigate these vibrant markets. So, let’s dive into it.

This is really good. I really… this is the first time that I’ve made a podcast in English. I never do it in English; I always do it in Spanish. So, I hope that my English will be nice, and let’s do it.

First of all, I want to talk a little bit about some important points about Mexico as a business hub. Mexico City is the capital of Mexico and one of the largest and most dynamic urban centers in Latin America. Mexico City is huge, believe me. If you come, you will see that the population of Mexico is more than 100 million people, and we have a very nice cultural, political, and economic powerhouse. So, this is a really big, big, amazing country. I believe it’s one of those countries that, for example, it happened to me when I was traveling and living in Madrid, Spain. I used to travel, and every time I shared with people and talked with people that I am Mexican, they were really like, “Fantastic! Hey, you’re Mexican! Welcome!” They remembered me for example, Chicharito, some characters from Mexico. This is really good. I never saw this with other countries, but when you say, “I am Mexican,” believe me, that’s a really good thing that I always noticed every time I’ve been abroad and every time I’ve been traveling. So, Mexico is a great opportunity, and we are going to see why.

Okay, so another additional data point I want to share with you about investing in Mexico is that we have economic growth. Mexico is the second largest economy in Latin America. I believe the first one is Brazil, with a GDP growth around 4.8% in 2021. This is the data from 2021, but I believe that every single year, the percentage is growing. So, this is very good. Another huge opportunity and huge big point that we have is the trade agreements. Mexico right now has 12 free trade agreements with 46 countries, sorry. So, this is a great opportunity so that you can open businesses with a lot of countries, a lot of countries around the world. So, this is very good. Mexico is also ranked 48th in the Global Competitiveness Index by the World Economic Forum. So, this is another huge data point, another good data point that I found. For example, one other opportunity and another thing that I notice about Mexico is the talent. Every year, 110,000 engineers and technicians graduate annually. So, this is also more than Brazil and Germany, for example, in Europe, and in Latin America, Brazil is, as I told you, the biggest economy. Mexico is one of the best providers, and the talent here is very good. Okay, so these are key points that you have to consider to make business in Mexico if you are looking to make business in Mexico.

Okay, so let’s talk about the pros of doing business in Mexico. Okay, this is… I will just let you know the bullet points and a little thought about it. First of all, the strategic location. We are in the center of the continent, America, so it provides access to North and South American markets. This is very good. For me, Mexico is like the door for all of America, the continent, sorry. Another point that I see is the large market: a substantial local market with high demand for various goods and services. Here, you can make business in every single niche or sector, believe me. Another point that we have is a skilled workforce: numerous universities and technical schools producing a large pool of professionals every year, every year. This is really good. Another point that we have is the cost-effective operations: lower operating costs compared to the U.S. and Europe. Mexico is very, very cheap compared to these countries, and this includes labor and real estate. So, this is also a good point that you have to consider if you are trying to look and make business in Mexico. Another point that we have is that we have favorable trade agreements with multiple countries. For example, with Canada and the United States, we have the Free Trade Agreement. So, this is a really great opportunity because you have an open door to make business with another countries. In Latin America, Mexico is a country that I believe has good relationships, good relationships with a lot of countries. So, this is a thing that you can benefit from.

And the most important, I believe for me, this is one of the most important things I see in Mexico, is the cultural openness. We are friendly people. You will see that we have an open culture. We really love foreign people to come to Mexico and live with and live here and see and talk and show the country. So, this is a thing that maybe I’ve never seen in other countries. There’s a phrase about Mexico that says, “Mexico, no hay dos” – like, “Mexico, there’s no other country.” And this is true, believe me. You will notice. I noticed, I think I had the opportunity to notice this when I went out of Mexico, when I lived in another country, that we are a very particular people. We love to party, we love to… we always have a smile, even though sometimes the difficulties for families or workers are not the best, or they don’t have good salaries, we are always happy. This is a great opportunity that you can get the benefit of: you will be in a country that is very open, that has a lot of culture, a lot of history, and a lot of opportunities. I really like Mexico to open businesses here.

So, as we’ve started to talk about the benefits and the pros that we have to make business in Mexico, maybe you also have to take care about three considerations that you should take a look at before thinking about coming to Mexico and opening a business. First of all, the bureaucracy. I believe that this happens all over the world, but in Mexico, it’s really complex sometimes to make some processes, to get some permits and licenses that you may be required. Mexico… this is really bad because, for example, in other countries, in Estonia, I believe that you can see all the requirements very well structured on landing pages, on the website of the Estonian government. But in Mexico, it’s a little bit tricky. Sometimes the communication is not the best. And then you go to the office to make the process, the permit, the license that you require. It could be a little bit slow, it could be a little bit like, “You have to go here,” and “No, no, no, it’s not this place, but now you have to go here.” And this could happen. This is maybe a bad thing that Mexico has: bureaucracy, and that you won’t find all the information on the internet, like, for example, other countries in Europe or the United States.

Another point that maybe you should take a look at is the security concerns. I mean, Mexico is known worldwide for having a “narco culture” that is perceived as very insecure. I have a lot of friends all over the world, and believe me, the first questions that they asked me about Mexico were, “Oh, isn’t it insecure to live there? How do you deal with the narcos? Are you a narco?” And I was like, “Oh my God, take it easy, bro,” because Mexico, believe me, if you do things right, you won’t be able to see these kinds of things. For example, for me, I’ve been living here more than half of my life, and nothing bad ever happened. I was never involved with narcos. Of course, that exists, but it depends on you, the precautions that you make. It depends on you how you live. If I am with, I don’t know, with a Rolex in the center of Mexico, where I know that there are a lot of people but it’s not a good area to deal with a Rolex, of course, that this will happen. But if you take care about some security things that you can do, believe me, Mexico is a really safe country.

Another point that we can take a look at is about the infrastructure issues and also the economic volatility. So, the infrastructure is about the congestions and pollution affecting daily operations. That can happen to you sometimes here in Mexico. We need to reduce the use of the car because there’s so much pollution here, and it’s dangerous for you. So, if you are planning to make business in Mexico City, you have to take care of this because some days you can’t use cars, and maybe this can affect your operations. In terms of the economy, you know that we have, I don’t know if you know, but in Mexico right now, we have Andrés Manuel López Obrador. Some people support him, some people don’t support him. I believe that if I am doing business, it’s not an excuse that you should take a look about the political situations, because there are some other countries that have worse political situations than Mexico. So, for me, this is like, you should consider it, because of course, you should investigate and you should see how Mexico is from this perspective. But for me, it’s not the point that may affect you if you have a good business, if you have good market research, you have a good product to offer to the Mexican market. So, this is a point that maybe doesn’t have to be a bad, bad, bad point for you.

Okay, so let’s go to part number three of the podcast, and we are going to talk about how to make business, what’s the process that I recommend you to do. First of all, as with every business, it’s market research. This is very important because you have to know about the demand for the product or the service that you are going to offer here in Mexico. Then, please, I always recommend this: try to set up all the legal structure correctly from the beginning, because this will help you in the future to avoid any kind of problems with the government, with taxes. So, please try to do all the things correctly from the beginning. I appreciate that in the United States, for example, they always do things right from the first time. So, this is a good way to work, a good way to make a business that you should consider.

Another thing that you should investigate and search before opening a business in Mexico is to see all the local partnerships that you can make, because, of course, you will have to find some providers. You will have to make some calls to take a look at, for example, I remember when I started with Mexico, a company that I made, like, a master thesis, I made this kind of presentation of this business model about Mexico. So, I started to look for a lot of partnerships, a lot of providers: car transport providers, hotel providers. So, this is a really good opportunity that you have to take a look at, because if you want to optimize all the operations in your business, you should take a look and work with good providers for your company.

And another thing that may help you a lot is to hire local talent. This is the best way. If you’re American, for example, and if you want to open a business here, imagine an advertisement agency. Try to hire local talent, because this will help you a lot to have the perspective that maybe you don’t have of the advertising market in Mexico. For example, if I go to Germany to live and trying to work as an advertiser, I have to know about the environment, about the trends, about the situation of the advertisement, the regulations too. So, this will help you a lot if you are planning to make business here in Mexico.

Okay, so let’s go to the other part of the podcast that is about interesting businesses to invest in Mexico. First of all, technology and software. This is a growing startup ecosystem and high demand for tech services like SaaS here in Mexico. I believe that there’s a lot of opportunity for this, and you can get the benefit of it. Another point, another business that you could open here in Mexico, is renewable energy: increasing investment in clean energy resources like solar or wind. This is not like the best business that you can enter and you can invest in. Another opportunity that I consider is financial services, FinTech, and financial innovations. It will be very good because here, for example, people are not used to everything on the phone, everything digital. Here, you can have this opportunity to bring a niche that is totally online. Like, in Mexico, there are a lot of new digital banks that don’t have offices. Everything is digital; you get a credit card with your phone. So, this is really good, a really good opportunity too. Another point maybe could be healthcare and biotechnology, because the population is growing, and the demand for advanced healthcare services could be a good option for you.

And the last one, and I can talk a little more about this because I opened a business about this, is tourism and hospitality, because Mexico is one of the most touristic places in Latin America and in America, I believe. We have a rich history and culture, making it a popular touristic destination. So, this is a great opportunity, believe me. When I started in Mexico in 2015, sorry, it was very good because I didn’t have any competition. I didn’t have a business making the same as we were trying to make with Mexico. So, this is a great opportunity that I benefited from that year. So, I believe that there are still a lot of opportunities in tourism because we have a lot of foreign people here in Mexico. So, get the benefit of it. This is really good, and of course, you will be able to travel a lot in Mexico, so this is good. I love to travel, so I really enjoyed all the years that I started with Mexico because I used to travel, I used to try all the circuits and all the trips that we made. So, it was good. It was good, I really loved it.

And let’s talk towards the end about the opinion on the future in Mexico. I believe that Mexico, even with the political situation, is a great country to live in, a great country to make a business, because you have a lot of opportunities. You have a good market here in Mexico. If you make business with innovation and economic development in Latin America, I think that you will have a great opportunity. Strategic trade agreements, growing focus on technology and sustainability mean that Mexico will be a great option for you. So, this is another reason that maybe right now a lot of big companies like Tesla have made a huge investment in Nuevo León, in Monterrey. There’s a reason about it. So, I believe that right now Mexico will grow. I trust in Mexico. As I told you, I don’t believe that we have to put the guilt on the government because it depends on society, on the people of the country. So, I believe that Mexico could be a great economy in the future, and now. I know that it will be, maybe in 2030, we will have a very huge increase in economy. So, take a look at Mexico because I believe that this is a really great opportunity for you if you are planning to make business.

So, thank you so much for listening to this podcast. If you are interested in these topics, because we are going to talk more about nearshoring, why American companies are focusing on Latin American talent, the benefits… I believe that Brian and Ruben could give you a huge perspective about it because they have a lot of experience in this topic. So, I invite you to follow us, to give us a like, to share if you have any friend, any work colleague that may be interested in these kinds of topics about Mexico. Send this video, and that’s all.