Many multinational companies are setting up their manufacturing unit in Mexico, TACNA. There are many reasons behind this. The Mexican economy presents various economic policies from time to time, which ensure the comfort of doing business in this country. It also presents a very favorable environment for exporters of various goods. It is easy to get the required permits and it does not take much time to get the production unit up and running.
The main reason behind the increasing popularity of Mexico as a manufacturing base is that it presents a lot of benefits to the foreign companies. The country offers favorable tax, legal and regulatory environment. It offers secure land borders and the necessary infrastructure required for international companies to function smoothly. It also has a very efficient system of internal trade and commercial exchange. The duty free and the subsidized import and export duties are another great attraction for foreign manufacturing companies.
The Mexican economy is highly diversified and offers all types of services to its international customers. These include electrical, transport, water and communication. Almost all these services are provided at competitive prices making Mexico one of the best suppliers for the international companies. Another reason for the companies succeeding in Mexico is that it has got a free trade zone with all the South American countries including US. The duty free facility along with the subsidized import and export duties reduces the cost of goods to almost 30%.
The other main reason for US companies working in Mexico is the lower cost of living in this particular country. The other main reason for international manufacturing to come to Mexico is the relatively low cost of living here compared to the other countries. In fact the taxes and other administrative charges here are less than most other developed countries in the world. The other major benefit of manufacturing in Mexico is that it has a very supportive domestic economy. The Mexican government considers all aspects of economic development in this country and ensures that the interest of their nation is fully taken care of. The federal income taxes are quite low here and this further encourages the investment in the domestic market.
Another reason for US companies working in Mexico is that the Mexican government is highly progressive and promotes business. The first phase of the economic reforms of this country saw the introduction of the financial Transparency bill, which has reduced the influence of financial frauds and corruption. The Mexican government also sees to it that all the laws of the country are complied with and abides by and so it scores over all the positive points mentioned above. One of the major positives for the foreign manufacturing companies operating here is that the intellectual property rights are quite strong in this country and so they can protect their products and inventions effectively from being copied and patented by other foreign firms. Also, the environmental and other regulations are strictly observed by the Mexican government, which makes it easier for foreign corporations to operate here in the legal way.
These are only a few reasons why many businesses are now choosing to establish operations in Mexico. There is no doubt that Mexico offers a lot of promise and opportunities to many businesses of all kinds. The Mexican economy will most probably continue to grow at a steady rate for the next few years because of the overall stability it enjoys thanks to the Mexican government. These are just some of the main reasons why many businesses are already starting to make plans of establishing their operations in Mexico and why they feel that free trade and economic liberalization policies are the main factors responsible for these moves.