Beware of false prophets, its what I tell those who ask for my opinion on Consultants that they are working with. When planning on doing business in Mexico.
Mexico 2018 will be a real challenge. If you really want to do business in Mexico, I welcome you, as well as millions of professionals and great companies. Yet, I would advise you to beware of the hurdles ahead:
- Federal Elections- Mexico will vote for a new President, a new Senate, and a new Congress. Right now the Presidential candidates are: Jose Antonio Meade (PRI-PVEM-PANAL), Ricardo Anaya (PAN-MC-PRD), Andres Manuel Lopez Obrador (MORENA-PT), Jaime Rodriguez -(Independent — Governor of Nuevo Leon State)and Margarita Zavala (Independent — Wife of Former President Felipe Calderon)
- CdMx Elections -Mexico City will vote for a “Government Chief” and 16 Mayors and new Local Congress.
- State and Local Elections — 8 states will elect a new Governor, 26 states will elect a new Local Congress, and 24 states will elect new mayors.
- CNTE -Teacher’s Union is famous for highway and city blockades within central and south mexico. The coming elections will no doubt make them more active.
- Law Reforms — I) Labor Justice will pass from the Executive Branch to the Judicial Branch in both Federal and Local Levels, II)Union Contracts will be Centralized, III)Digital Invoice 3.3 format is now required, IV)
- NAFTA renegotiations — I)The outcome will definitely affect the Federal Elections, II)could affect the value of the MXN, and III)will define Mexico’s relationship with the US and Canada.
- Personnel Management: I)Outsourcing vs Insourcing vs InHouse, II)Federal and State Revenue Services are becoming stricter, III)Social Security Authorities are becoming more aggressive, IV) Labor Unions will change the way they work and do business, this do to: a)Centralization of Labor Union Contract, & b)The very real possibility that the Legal Reform proposed by three senators (two of which are Union Leaders) at the end of last year will pass. They seek to legalize and generalize Outsourcing in Mexico for every position in a company, V)Some states plan on increasing the Payroll Tax, and VI) The increase of non professional and no serious companies that offer Outsourcing, Hiring and Payroll services, put businesses in legal risk.
- Security and Safety- Both Mexico’s New Interior Security Law and the US’s TAX Reform, Interior Security plan and Immigrations
These are just some of the challenges ahead. Which I believe aren’t terrifying, but are important to take into account. Mexico has proved itself as a great country to do business with, open business branches in, that has a very qualified workforce and a very active economy, as well as a privilged geographic position.
Just remember to do a very detailed Due Diligence.