Top 5 Tips for Successfully Doing Business in Mexico 

• In the present scenario, Mexico has become one of the most powerful countries in Latin America which has driven the trend of doing business in Mexico for companies. Recently, this country has started to attract more investments at an international level due to multiple factors such as the size and strength of the consumer market, low labour costs, a comprehensive network of free trade relationships with several countries, easily predictable inflation patterns, and strategic geographic location. However, to successfully do business in Mexico one should have a deep understanding of the cultural, economic, and legal aspects of the country. For companies wanting to establish their business in this region Mexico company registration is necessary. In this blog, we will study the top five successful tips for doing business in Mexico.  

Understanding the Local Culture  

Foster strong business relationships 

• In Mexico, success in business is mainly due to interpersonal relationships. It has been observed that building personal relationships is very significant in Mexican business culture. Building relationships plays an important role in the creation of strategic partnerships. Locals often prefer to conduct business with those individuals who they know and trust, this implies taking time off work to establish rapport. This will elevate your chances of success for doing business in Mexico. Start the business conversations with small talk about culture, weather, food, and the city you are in. Consistent face-to-face meetings will also help you in solidifying your business relationships.  

Communication skills 

• Effective communication is the key to achieving any of your goals. In Mexican culture politeness and respect are highly valued, what you give comes back around. While Mexicans can speak English learning a little Spanish will take you a long way. You can use formal titles such as “Liceciado” (use this with individuals with degrees) or “Señor/Señora” when addressing colleagues or peers. Also, remember that close proximity during conversation is common in Mexico, so be ready for a more personal space dynamic while having a conversation.  

Select the Right Location  

• Mexico is a huge country and has diverse economic regions. Each region has its own individual characteristics, so selecting the right location for your business is necessary.  

• Southern Mexico– This area has fewer industries but has plenty of natural resources. Hence, providing wonderful opportunities for agriculture and tourism.  

• Northern Mexico– This is known for its closeness to the US border which makes it ideal for production and trade. Cities such as Monterrey and Tijuana have become major manufacturing hubs/  

• Central Mexico- This part provides a wide talent pool and infrastructure. Cuties such as Querétaro and Mexico City provide financial and cultural centres.  

Infrastructure 

• While selecting the location of your business carefully evaluate the logical factors. Opt for a location that is close to your target market, this will reduce the costs of transportation and delivery times. Carefully assess the local labour market regarding the availability of the skilled workforce related to your industry. While selecting a workforce consider labour costs, employment rules, as well as the presence of educational institutions that will enhance the development of the workforce. 

Building a Strong Team 

Fair hiring practices 

It is significant to hire the right talent for your company to successfully navigate the cultural, legal, and operational considerations of Mexico. The Mexican government has implemented strict labour laws that govern the fair hiring practices. Business owners should provide a written employment contract in Spanish including information about compensation, conditions of termination, and employee benefits. It is necessary to adhere to the regulations about the minimum wage, overtime pay, as well as employee benefits. During the interview process engage in a little personal conversation before discussing about professional topics. This approach will build trust and rapport which are necessary for successful business interactions.  

Culture integration 

Mexican culture is all about building strong relationships, supporting community efforts, and have mutual respect. It is significant to incorporate these values into your business practices to build a supportive business atmosphere. Mexican employees place special emphasis on work-life balance and consider spending time with family is important. Employers should provide flexible working hours and support employees in balancing their personal and professional responsibilities. This will reduce burnout and will lead to better job satisfaction. Provide leave on local holidays and traditions, one such holiday is the Day of the Dead also known as Dia de los Muertos which is celebrated widely in Mexico. Embracing the local cultures will foster trust between employees and employers which will create a better organizational culture.  

Navigate the Legal Framework  

Study about business structure  

Prior to starting a business in Mexico, understand the legal and regulatory framework of the country. Decide the appropriate business structure for your company. Some of the common options for business structures are: 

Sociedad Anónima de Capital Variable (S.A. de C.V.) – This entity is similar to a corporation in US and usually has unlimited number of shareholders with no personal liability.  

Sociedad por Acciones Simplificada (SAS)- This entity is a simplified corporate structure for small or micro-sized companies.  

Trade agreements 

Trade agreements and incentives play an important role in developing the economic landscape of a country and also facilitate trade. The strategic position of Mexico as a signatory to the United States-Mexico-Canada Agreement (USMCA) has promoted fair trade and deepened the economic ties between the three countries. It also includes provisions for the rights of employees, environmental standards, and online trade. The country has also created a European-Union-Mexico-Free trade agreement that facilitates easy trade among the states of Mexico and European union and covers a wide range of products and services while also promoting investment.  

Market Trends  

Stay up to date on consumer preferences  

Mexican culture has created a major impact on its consumer behaviour. Family plays a centric role in Mexican society and influences various purchasing decisions, products that cater to the needs of a family work well in the Mexican market. Consumers also prefer brands that respect and implement Mexican traditions and cultural components into their products or services. Furthermore, while Mexico has a growing middle class, customers are still price sensitive. Provide better discounts and value-for-money propositions for attracting Mexican buyers.  

Industrial trends 

• Mexico’s industrial landscape is rapidly evolving and keeping up with trends of the global economy. Nearshoring which is relocating manufacturing closer to the end customer is slowly gaining momentum in the country. Organizations are moving their supply chains from Asia to Mexico this has reduced delivery time and costs and led to better flexibility.  

Conclusion  

• Mexico provides companies with a lot of potential for expansion due to its trade agreements, labour, and diversified economy. It is crucial for companies to know the local culture, business ethics, and legal frameworks in order to successfully operate in the country. For starting your business in Mexico, contact Tetra Consultants and their team of experts will help you to successfully navigate the legal landscape of the country.  

• Contact us for Mexico company registration and our team of experts will get back to you in 24 hours.