The Telegraph’s Money column reports that Mexico’s emerging market is one of the hottest places to invest in 2014,predicting that,“the next decade or two could prove extremely profitable for investors.” Respected economist Jim O’Neill has grouped Mexico with Indonesia,Nigeria and Turkey,using the acronym “MINT” to describe these growing powerhouses.
“The geographical location of Mexico is one reason why economists are excited about its long term growth potential,” writes The Telegraph. “Mexico has close links with the US and fast growing Latin American countries.”
In addition,Mexico’s exports have risen dramatically over the last five years,spurring its annual economic growth rate to reach upwards of 3.5 percent. Mexico also has a rapidly maturing young workforce with an average age of 27,which provides support for its growing industrial and business sectors,while also providing the ideal foundation for a significant rise in domestic consumption.
Mexico’s recent slew of historic energy and economic reforms are also causing many investors to pump more money into the region. For example,the government has lowered the cost of gas and electricity,and has also opened state-run oil giant PEMEX to foreign investment.
“The energy sector in Mexico has huge potential but is being strangled by underinvestment,” Tom Smith,who runs the Neptune Latin American Fund,told The Telegraph. “This should change as the government opens the sector to private investment for the first time in seventy-five years.”
Other strong sectors of Mexico’s economy that are positively affected by the recent reforms include the real estate,automotive,aerospace,business process outsourcing (BPO),IT and telecom industries. The state of Querétaro,for example,has one of the nation’s strongest industrial state economies,with Swedish telecom giant Ericsson operating a Global Service Center here,and French manufacturer Safran announcing the construction of its fifth plant in the region. Japanese auto part manufacturer Hitachi Automotive Systems is also working on a new project in Querétaro.
“Setting up a company in Mexico is very simple,” stated Jose Miguel Zozayacorrea,managing partner of multinational law firm Baker & McKenzie’s Guadalajara office told Nearshore Americas. “From a corporate perspective,there is almost no difference in setting up operations in Guadalajara or any other part of Mexico – except for minor tax differences at the state and municipal level.”