Incentives For Manufacturing In Mexico
Mexico’s Federal Government and many Mexican State governments offer incentives to many types of inbound manufacturers. The newly expanded incentive landscape (as of 2016) covers many industrial sectors and most geographic areas including (but not limited to):
- San Luis Potosi
Historical Granting of Incentives
In the 1970's an 1980's Mexico granted large incentive packages to entice foreign manufacturing investment to address a very high underemployment rate throughout the country. Incentive policies were driven by a desire to create manufacturing centers off the border and in the country's interior where few jobs were available and quality jobs were scarce. Significant packages were provided to the largest automotive, electronics, consumer goods and other manufacturers that would ultimately create hundreds of thousands of jobs. To assure that these companies were successful incentive packages were also offered to suppliers of these mega-companies that created jobs.
In the 1990's as Mexico focused on bringing higher wage jobs to many parts of the country, the best incentive packages were offered to incoming manufacturing companies that fit into certain geographic clusters and industry profiles. The electronics industry in Guadalajara, Tijuana, and Juarez was driven initially by government incentives as was the automotive industry as it migrated from the United States and Europe to Saltillo, Leon, Toluca, Puebla and other automotive clusters. For true manufacturers, with processes well past the simple assembly operations of Mexico's past, substantial incentives were offered. Training programs to increase the skill level of workers, capital equipment grants and even real estate was subsidized in many cases.
The Next Incentive Landscape
Due to the success of Mexican government programs that incented inbound manufacturers, many incentive opportunities were withdrawn. Mexico had reached its goal of becoming a true full-process fully integrated North American manufacturing platform. By 2006 - 2008, few incentives were available to manufacturing firms with the exception of the Aerospace Industry. State and Federal governments alike wanted to attract North American and European aerospace manufacturers and their supply chains to capture the very high skill-level jobs that would come with aerospace manufacturing clusters. Queretaro, Chihuahua, Mexicali, and to a small extent the Monterrey area blossomed as Mexico's aerospace industry took off.
Amazing incentive packages delivered this result as the Aerospace Industry in Mexico came into its own in a matter of two or three years. Capital equipment grants, assistance with infrastructure, real estate grants, and even an Aerospace Training Center in Queretaro were all part of the incentive environment in Mexico until the end of 2008. In 2011 and 2012 an expanded incentive environment launched for companies in the auto sector with new OEMs and Tier auto suppliers winning incentive packages in some locations.
In 2016 and 2017
Mexico's government understands it must be competitive in the newly difficult economic landscape to entice foreign manufacturers to make relocation decisions in these uncertain times. Once again, valuable incentive packages are on the table from several sources. Each package is different as they vary by location, sector, level of financial investment, type/number of jobs created and strategic benefits to Mexico's long term goals. In essence if your company will be creating quality jobs while making a substantial and long term investment in Mexico; the government wants to help you make that happen.
Confidential Estimate of Incentives
If you would like to discuss what incentives, and their values, that your company might anticipate with a Mexico manufacturing location decision we would be pleased to have a confidential conversation regarding your project. You might be surprised by the results as both Federal and State governments are taking a very proactive stance in inviting quality foreign investment into the country.
For your Confidential Estimate of Incentives please connect with us at: [hidden email] and we'll have someone get in touch with you quickly to assist in your planning process.