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DOING BUSINESS IN MEXICO

DOING BUSINESS IN MEXICO. GEOGRAPHICAL INFORMATION. Is bordered by the United States to the north and Belize and Guatemala to the southeast. Mexico's total area is 1,972,550 km². Mexico shares a 3,141 km border with the United States Covering almost 2 million square kilometers

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DOING BUSINESS IN MEXICO

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  1. DOING BUSINESS IN MEXICO

  2. GEOGRAPHICAL INFORMATION • Is bordered by the United States to the north and Belize and Guatemala to the southeast. • Mexico's total area is 1,972,550 km². • Mexico shares a 3,141 km border with the United States • Covering almost 2 million square kilometers • Mexico is the fifth-largest country in the Americas by total area and the 14th largest in the world. • Mexico is one of the 17 megadiverse countries of the world. With over 200,000 different species. • Mexico is home of 10–12% of the world's biodiversity.

  3. Mexico

  4. Mexico • Fear of the unknown • Language, culture • Export paperwork • International Insurance • Business Loans • Budget • Market entry

  5. Mexico • 106 million people • 1.7% population growth per year • 62% pop between 15-64 years • 33% pop between 0-14 years

  6. The Mexican Market • Why is it important? • Two defined economic groups: rich & poor • Poor majority does not equal insignificant market • 30 million consumers w/discretionary income • Concentrated in major cities • Sophisticated shoppers • Rich = really rich = 24 out of 500 richest men are Mexican.

  7. The Mexican Market • Largest number of FTAs • Trade US & CAN tripled since NAFTA 1994 • Lots of $ in Mexico - Income distribution: top 20% earn 55% of total & private consumption lead growth in past 2 years • Actively seeking foreign participation in its economy: no. state owned enterprises fell 1982 >1000, 2000 <200

  8. The Mexican Market • Exports: $168 billion - 2000 • Imports: $176 billion - 2000 • Infrastructure • Airports: 238 (paved), 1610 (unpaved) • Seaports:15 (major) • Expressways: 3960 miles • Highways: 56,178 miles

  9. Expressways

  10. Mode of Entry • Exporting • Direct & Indirect • Joint Venture • Licensing & Franchising • Management Contracts • Turn-key projects • Ownership arrangements • Foreign Direct Investment

  11. Foreigner Language Barrier Work approach Relationships Perception Skills: blending in Few words Access to high levels & business etiquette Networking Challenges/Success Factors

  12. Mexican Flag

  13. Doing Business in Mexico • Conscious of history and tradition - proud and patriotic • Patience is advised - skeptical of foreigners in their country and business • “Despacio que tengo prisa” • Establish reputation by keeping every commitment

  14. Business Savvy • Initial contact with key decision maker • Networking: opens doors • Chambers • Government contacts • Before: Research & Recommendations

  15. Business Savvy • Telephone or verbal? In writing, email or fax & follow up • Need signature for agreements • Translations & translators - avoid mistakes • Do you really speak Spanish? • Advertising - hire a professional

  16. Business Savvy • Direct selling • Control over product • Expenses: staff & inventory • Branch office • US trained personnel in control of ops • 183 days over 12 month-period

  17. Business Savvy • Broker/Representative • Familiar with your market • Not exclusive • Master distributor • One client, large shipments • One more on his list?

  18. Business Savvy • Joint venture • Ownership position in your business • Finding Mr. Right

  19. Business Protocol • Non-smoking areas - unknown • Who pays? Whoever extended invitation • A woman NEVER pays. • Refer to people by their prefix • Prefix, First Name, (Middle name), Paternal Last Name, Maternal Last name

  20. Business Protocol NAME • Maiden • María (Elena) Gómez Ramírez • Address • Lic. Gómez / Srita. Gómez • Married • María Elena Gómez de Rodríguez

  21. Business Protocol ETIQUETTE • Woman enters room - stand up • Carry plenty of business cards • Don’t be hyperactive • Don’t look at the watch constantly • allow at least 2 hours per meeting (+ traffic) • Be on time, expect others to be late

  22. Business Protocol ETIQUETTE • Personal space closer • Touching, hugging, kissing • Louder • Hand gestures

  23. Business Protocol ENTERTAINMENT • May or may not discuss business • Avoid talking about income, status, investment & historically sensitive topics • Watch out for altitude & alcohol! • Dining takes long, no rush • Different hours - snacks

  24. Business Protocol Weekly Schedule • 8:00-9:00/10:00 Breakfast • 10:00-2:00 - Office hours • 2:00-4:00/5:00 - Lunch • 4:30-6:00/7:00 - Office hours • 7:00-9:00 - Cocktails, happy hour • 9:00-Midnight/beyond - Dinner

  25. POLITICAL INFORMATION • Capital: Mexico City • Official languages: Spanish • Government Presidential Federal republic • President Felipe Calderón(PAN) • Population:  2007 estimate108,700,891 (11th) •   2005 census 103,263,388  • Mexico is the most populous Spanish-speaking country in the world • The United Mexican States are a federated union of 31 free and sovereign states.

  26. ECONOMICAL INFORMATION • GDP (PPP) 2006 estimate • Total $1.149 trillion (12th) • Per capita $11,249 (63rd) • GDP (nominal) 2005 estimate • Total $840.012 billion (short scale) (13th) • Per capita $8,066 (55th) • Currency: Peso (MXN) • Mexico has a free market economy. • Approximately 90% of Mexican trade has been put under free trade agreements with over 40 countries, of which the North American Free Trade Agreement remains the most influential.

  27. CULTURAL INFORMATION • Mexico is influence by USA. • Mexico is 87 percent Christian of whom 80 percent are Catholic. • Mexico is known worldwide for its folk art traditions • Mexico City hosted the XIX Olympic Games in 1968, making it the only Latin American city to do so. • Football (soccer) is often considered to be the favorite • The vast array of popular music genre in Mexico shows the diversity of its culture.

  28. MEXICAN ATHLETES Lorena Ochoa, world's number 1 golfer according to the LPGA Ana Guevara, is a Mexican track and field athlete, specializing in the 400 meters. Fernando Platas, is a Mexican diver

  29. FOREIGN RELATIONS • the Government of Mexico has sought to maintain its interests abroad and project its influence largely through moral persuasion. • In particular, Mexico champions the principles of nonintervention and self-determination. • In its efforts to revitalize its economy and open up to international competition, Mexico has sought closer relations with the U.S., western Europe, and the Pacific Basin. • Mexico is currently the country with most free-trade agreements in the world.

  30. DOING BUSINESS IN MEXICO Note: Doing Business 2007 rankings are being recalculated to reflect changes to the methodology and the addition of three new countries.

  31. STARTING A BUSINESS The challenges of launching a business are shown below. Included are: the number of steps entrepreneurs can expect to go through to launch, the time it takes on average, and the cost and minimum capital required as a percentage of gross national income (GNI) per capita. DEALING WITH LICENSES Shown below are the procedures, time, and costs to build a warehouse, including obtaining necessary licenses and permits, completing required notifications and inspections, and obtaining utility connections.

  32. PROTECTING INVESTORS The indicators below describe three dimensions of investor protection: transparency of transactions , liability for self-dealing, shareholders’ ability to sue officers and directors for misconduct and Strength of Investor Protection Index. The indexes vary between 0 and 10, with higher values indicating greater disclosure, greater liability of directors, greater powers of shareholders to challenge the transaction, and better investor protection. PAYING TAXES The data below shows the tax that a medium-size company must pay or withhold in a given year, as well as measures of the administrative burden in paying taxes. These measures include the number of payments an entrepreneur must make; the number of hours spent preparing, filing, and paying; and the percentage of their profits they must pay in taxes.

  33. CLOSING A BUSINESS The time and cost required to resolve bankruptcies is shown below. The data identifies weaknesses in existing bankruptcy law and the main procedural and administrative bottlenecks in the bankruptcy process. The recovery rate, expressed in terms of how many cents on the dollar claimants recover from the insolvent firm, is also shown.

  34. TOTAL IMPORTS OF MEXICO • Total Imports (billons dlls)

  35. IMPORTS OF MEXICO • Since the implementation of NAFTA, Mexican imports from the U.S. have increased exponentially, from US$41.6 billion in 1993 to over US$ 120 billion in 2005. • Through November 2006, U.S. exports to Mexico were US$124.1 billion, up over 12.7 percent over the same period in 2005. 2006 is expected to set new records for U.S.-Mexican trade. • Although China just surpassed Mexico as the second largest trading partner of the U.S., U.S.-Mexico bilateral trade has more than tripled since the implementation of NAFTA: from US$81.5 billion in 1993 to US$290.5 billion in 2005 (which represents an increase of 256%). • 69% of Mexico’s bilateral trade is with the United States.

  36. IMPORTS OF MEXICO

  37. Doing Business in Mexico • The conclusions are that Mexico has been importing a lot of products lately, mostly are in the agriculture industry, because the great impact that the United States has been doing in this sector in the past few years. • Mexico is in the second place of the world oil imports, although Mexico still has a lot of this product we cant process it because the lack of machinery this country has. So our neighbor country (U.S.) imports us all the oil we export to them. • Mexico has a lot of restrictions policies that slows the process to make business here, so the foreign industries search for another nations. Although we have a very cheap labor, that’s why the Maquiladoras has have a lot of success here.

  38. BIBLIOGRAPHY • http://es.wikipedia.org/wiki/M%C3%A9xico • http://en.wikipedia.org/wiki/Foreign_relations_of_Mexico • http://www.doingbusiness.org/ExploreEconomies/?economyid=127 • http://translate.google.com/translate?hl=es&sl=en&u=http://www.doingbusiness.org/Main/Mexico.aspx&sa=X&oi=translate&resnum=1&ct=result&prev=/search%3Fq%3Dwhen%2Bdoing%2Bbusiness%2Bmexico%26hl%3Des • http://www.mexico-trade.com/DOINGMX.htm • http://www.dfat.gov.au/publications/business_mexico/ • http://www.importexporthelp.com/doing-business-in-mexico.htm

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