Mexico is borders the United States in the north, the Pacific Ocean in the south, and the Gulf of Mexico in the east. With an area of 1964,375 square kilometers, it is the 14th largest country in the world. With a population of 123 million, it is the 11th most populous country in the world. Mexico has lower latitudes. The middle part is in the tropics. The climate is not hot and is a good place for human survival. The Mexican Plateau has a mild climate throughout the year. The mountain basin is 24 degrees and the high terrain is about 17 degrees. It is not cold in winter and not hot in summer. The sediment is 750-1000 mm. Most parts of Mexico have a savanna climate, there are no four seasons, only the dry season and the rainy season, and the rainy season concentrates 75% of the annual precipitation.
Mexico has abundant mineral resources, mainly oil, natural gas, gold, silver, copper, lead, graphite and so on. The main crops in Mexico are corn, wheat, sorghum, rice, soybeans, cotton and cocoa. The automotive industry has always been a pillar industry in Mexico. Mexico has now become the fifth largest car producer in the world. Manufacturing has also contributed significantly to Mexico’s economic and social development. In addition, a long cultural history, unique plateau customs and cultural landscapes, and long coastlines provide unique advantages for Mexico’s tourism development. Mexico’s main exports are crude oil, automobiles, auto parts, coffee beans, vegetables, rolled steel and machinery products. In addition, aquatic products mainly include prawns, tuna, sardines, abalone and so on. Prawns and abalones are traditional exports. Imported goods are automotive materials, electrical appliances, chemical products, beverages, pulp and textiles. The Mexican currency is the Mexican Peso, that is 1 Mexican Peso ≈ US $ 0.052. Currency number MXN. The auxiliary currency is cents. There are 5,10,20,50 cents and 1,2,5 and 10 pesos coins; 20,50,100,200,500,1000 pesos
As widely expected, the Central Bank of Mexico cut its overnight interbank interest rate by 25 basis points for the third consecutive time on November 14, 2019, to 7.50%. Policymakers have said that the current uncertain environment continues to pose a significant risk that could affect the country’s macroeconomic conditions, adding that all factors affecting inflation and its prospects will continue to be closely monitored and action will be taken when necessary. The Committee noted that the annual inflation rate for October was 3.02%, as non-core inflation and core inflation rates had fallen in the past month, and although core inflation rates have remained constant, they are likely to be lower than previously Prediction. Decision makers added that if there are factors that coexist and may continue to affect inflation and its expected risks, monetary policy will be adjusted in a timely and firm manner to bring the inflation rate to the target range. From 2005 to 2019, the average interest rate in Mexico was 5.73%, reaching an all-time high of 9.25% in October 2005 and reaching an all-time low of 3% in June 2014. ‘
In Mexico, trains connect to the national network via national and private railways. It is free for children under 5 years old, half price for 5 to 11 years old, and is known by the Chihuahua Pacific Railway and Aztec nicknames. Mexico’s public transport system is well developed and cheap. Before taking the bus, please note whether the bus is Lokal or De Paso. Lokal means that the bus departs from your station; De Paso is a bus that departs from another station and you cannot purchase it in advance. In Mexico, the subway is also the main mode of transportation. Also, if you have an international driver’s license, you can rent a car to any destination you want to go to.
Statistics describe the literacy rate in Mexico from 2006 to 2016. Literacy rate measures the percentage of people who can read and write at the age of 15 and over. H Plecher, the last editor, said on June 25, 2019, In 2016, Mexico’s literacy rate was approximately 94.86%.
The National Autonomous University of Mexico (UNAM) ranks 113th in the world ranking and the first in the ranking of Mexican universities. Tec de Monterrey is a private institution that currently ranks 178 in the world and second in Mexico.
In 2018, the average wage in Mexico reached the highest level during the period, reaching $ 16,298 per year. In contrast, the value was equal to $ 15,905 in 2000, which was the lowest average wage in the year.
According to history, the family is one of the most important elements of Mexican society. Communication Especially outside the city, families are often large, and Mexicans are very aware of their responsibilities to immediate family members and extended families, such as cousins and even close friends. Holding parties in their homes plays a big role in Mexican life, and making visitors feel comfortable is a big part of the country’s values and customs.
Mexico’s economic freedom score is 64.7, ranking 66th in the 2019 index. Its overall score fell by 0.1 point, and the decline in judicial efficiency, trade freedom, currency freedom, and labor freedom greatly overwhelmed fiscal health scores. Mexico ranks 12th out of 32 countries in the Americas region, with an overall score higher than regional and world averages.
Opening hours, lunch meetings, proper dress. All of these are important issues to consider before heading to Mexico to begin operations or even a business trip. Understanding the ins and outs of Mexican culture can go a long way. Most companies open their doors between 9 AM and 7 PM. However, it depends on the industry and location. Lunch is the biggest meal of the day in Mexico, and many employees spend a lot of time on it. Meals between 2pm and 4pm are standard in most cities. If you are invited to a business lunch, it is expected to last at least two to three hours. Ready to talk about many topics other than business. Mexicans often discuss conceptual ideas at luncheons and may even reach an agreement, but in general time is used to understand each other. Most meetings in Mexico do not follow the bulleted list (even if distributed). In general, Mexicans tend to be creative and do not want to be tied to a strict agenda. Don’t be surprised if the meeting is long or if you feel that the group members are going astray. Meetings may take longer than expected, but meetings often end with making and implementing important decisions.
Mexico’s tax system has been affected by comprehensive tax reform legislation promulgated mainly in 1986 and 1988. The major change is to try to make foreign investment compatible with the tax system of Mexico’s most important trading and investment partners and countries that compete with Mexico. Individuals and companies operating in Mexico, and in some cases the main taxes payable by foreign companies, are levied by the federal government. State and municipal governments have more limited taxation powers and are not entitled to general corporate income tax; some states levy taxes on wages and professional fees paid by employers. The principal includes federal and local taxes. The taxpayer must use the calendar year for income tax purposes.
From the date of establishment of the company to December 31 of the year, the tax year for newly established companies is shorter. Similarly, existing companies have a shorter taxable year in the year in which the liquidation process begins. Mexican residents, regardless of nationality, are subject to Mexican tax on all types of income worldwide, which must be included in the annual personal income tax return. Special treatment is given to capital gains, domestic interest and dividend income, and the tax rate ranges from 35%. Non-residents only tax their Mexican-source income, which usually applies to different types of total income at a fixed rate, without deduction. However, according to special regulations, they can choose to tax the taxable net profit of real estate or stock sales or higher rates for short-term construction, installation, erection and similar jobs. No overall annual return for non-residents is required. After the company pays income tax, it can distribute the after-tax income to shareholders without paying any other taxes.
However, if a corporation does not accept corporate income tax for distribution for any reason, such as a book gain that has not been recognized for tax purposes, the company will have to pay 35% of the corporate tax return on those gains. The income tax system only taxes corporate income once. However, the distribution of income that is not paid for corporate income tax for any reason shall be subject to a 35% tax on the enterprise. It is important to note that not taxing the distribution of dividends would eliminate double taxation at the shareholder level, thereby greatly reducing the overall tax burden on investment returns for domestic and foreign investors.
In Mexico, paying income taxes is simple. Taxes are automatically deducted from your salary. Unless your annual income exceeds 400,000 pesos ($ 21,500), you don’t have to file any tax declarations or do any paperwork. In fact, in most companies, you will not even receive an annual tax form unless you specifically request it.
Mexican resident taxpayers are required to pay corporate income taxes worldwide, while foreign residents are taxed on income generated from their permanent operations in Mexico. Foreign companies established in Mexico are eligible for certain exemptions, but they are subject to the same tax system as domestic companies. Although states have begun offering competitive tax benefits to attract foreign investors, most of Mexico’s taxes are collected at the federal level.
If I were the CEO of the company, I would not consider opening an office in Mexico. First, in each country, you need to pay attention to who you work with to avoid being cheated. But in Mexico, there are further reasons to be careful. Pulido said it is important for your company’s legal representative to maintain a good record with the government, and a poor relationship can damage that record. Second, many people believe that crime is one of the greatest risks of doing business in Mexico. Drug dealers and smugglers commit crimes in the city. Third, Payan said that in the case of government departments, it may take a long time to obtain permits and carry out official duties. There may be delays when applying for a permit. Not only are some policies detrimental to companies, but the fact that the overall regulatory environment is different from the United States can also be a major challenge.