Gerardo González
General Manager
American Industries
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Mexico’s Advantages Spur Foreign Investment Allure

By Alejandro Enríquez | Mon, 10/11/2021 - 09:00

Q: What makes Mexico an attractive market for foreign industrial companies?

A: Mexico is a highly competitive country. Despite some regulations that may deter foreign investment, the country still has many advantages, such as sharing a border with the US, the USMCA and a privileged geography with important ports that connect Mexico to the world. The country also has a competitive workforce that remains affordable even after recent salary increases. The Mexican workforce is highly skilled, available, highly productive and competitive.

Q: Why do companies reach out to American Industries?

A: American Industries’ mission is to help foreign companies establish operations in Mexico. If a company enters the country on its own, it will have to perform research from day one, making the learning curve longer and painful. It takes time to become familiar with different legal requirements, customs and reforms, such as the new Labor Law Reform that bans outsourcing.

Working with us, companies can shorten that long learning curve because American Industries has their back. We help our clients do what they do best while we take care of the paperwork, operations and consolidation of the business in Mexico. Companies reach out to us to make their landing easier and more successful.

A: What makes American Industries the best alternative over its competitors?

A: There are several key factors that put us above our competitors. The first is our experience. We have 46 years of experience working in this specific market niche, having assisted over 250 foreign companies from all over the world and from many industries. American Industries offer an all-inclusive package, unlike other suppliers that offer services exclusively for customs, human resources or finance. We are a one-stop shop, offering our clients an integral solution.

Other important differentiators are the certifications and licenses we hold. For instance, we hold the IVA-IEPS certification, which is rare among Mexican companies. Through this certification, we get a tax credit from local authorities that allows our clients to avoid paying the 16 percent VAT for every piece of machinery, equipment and raw material they import. Our value offer is the result of our technical, tax and commercial expertise plus the networking we do with industrial chambers, associations and local and federal governments.

Q: Have you detected more Asian companies looking to establish operations in Mexico?

A: There has been greater interest from Asian companies since the USMCA came into force. We have been able to attract some Chinese and Asian clients, some in the Bajio region and others in the north, especially in Monterrey. This is thanks to the representation office we opened in Shanghai early in 2020.

This phenomenon was boosted by the new USMCA’s rules, which establish that foreign companies aiming to have a strong presence in the North American market have to be located on the continent. Before this new regulation, Asian companies were able to produce in other zones and export to North America.

Q: How did the pandemic hit the industry and how is the recovery going?

A: The industry has suffered in different ways. Fortunately, there is still a high volume of automotive production in the Bajio region, and specifically in Guanajuato, that was not directly affected by the pandemic. There were temporary stoppages at first but our clients in this area have been fully operating since May 2020, when the federal government labeled the automotive sector as essential. There have not been mass layoffs in the industry but the shortages of semiconductors and other supplies continue to be a problem.

American Industries remains optimistic. We have gradually seen more movement in operations related to industrial real estate and administrative and shelter services. We have not returned to pre-pandemic levels but a full recovery looks closer every month.

 

American Industries has over 40 years of experience helping companies transfer their manufacturing operations to Mexico. It offers site selection, shelter services and real estate in Mexico’s top manufacturing destinations.

Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst