Mexico is open to foreign direct investment (FDI) in most economic sectors and has consistently been one of the largest recipients of FDI among emerging markets.

      However, in recent years Mexico has become less competitive relative to other emerging economies, particularly China, but also India and countries in Eastern Europe, as it has failed to address serious crime and safety issues or pass much needed fiscal, labor and energy sector reforms. Recent reports from AT Kearney, Transparency International, the World Economic Forum and the Organization for Economic Cooperation and Development (OECD) have detailed the perceived decline in Mexico’s attractiveness as an investment destination.

      Foreign investment in Mexico is largely concentrated in the northern states close to the U.S. border where most maquiladoras are located, and in Mexico City. Financial services, automotive and electronic sectors have received the largest amounts of FDI. Historically, the United States has been the largest source of FDI in Mexico by far, though its percent of annual FDI flow has declined for three straight years and now represents less than 50 percent.

      The government of Mexico has had some success in simplifying the process of investing in Mexico. The Secretariat of Economy (SECON) maintains a Spanish-language website (www.economia.gob.mx) offering an array of information, forms, links and transactions. Among other options, interested parties can download import/export permits, make on-line tax payments, and chat with on-line advisors who can answer specific investment and trade related questions.

            Despite progress however, according to a World Bank study, it takes on average 58 days to complete all paperwork required to start a business in Mexico; compared to an average OECD figure of 25 days...

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