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Financing a Business in Mexico

When seeking business finance research is fundamental. Credit for investments in Mexico may be found directly in UK or asking locally for public aid (mainly in support of large investments).

Bank financing. International banks hold over 80% of total deposits of Mexican savers and over 65% of total financial assets. The main institutes are Citicorp, Scotiabank, Santander Investment, BBVA and HSBC. Micro-credit may be possible. Credit options should be obtainable from the international departments directly in UK.

Public aid. Federal and state governments offer a number of incentives for companies looking to invest in Mexico, including preferential property positions, tax exemptions and training.

State governments offer these and other incentives on a case-by-case basis and offers are kept private between the investor and the state. Private negotiations may lead to other incentives dependent upon the amount of the investment; the amount of employment created by the new investment; and the economic growth of the region given such investment. For further information

please visit: www.investinmexico.com or contact the UK Trade and Investment offices in Mexico. Expect your application to take a considerable amount of time to be processed.

Tax Relief and special settlement:

Maquiladoras, Shelter operation and Soft landing zones.

Maquiladora is a factory or assembly plant operated in Mexico under preferential tariff programmes. These allow materials to be used in maquiladoras to enter duty-free, provided the finished product is then immediately exported out of Mexico. Maquiladoras are also allowed to sell to the domestic market but the products sold are subject to any relevant duties and taxes. Maquiladoras can now be established anywhere in the country.

Shelter operation. A shelter operation allows foreign companies to conduct labor-intensive production in Mexico on an outsourcing basis. The shelter operators have the legal exposure to employment law rather than the foreign investor. This can therefore be a particularly attractive option for small- to medium-size companies for which the risks involved in foreign investments are particularly important.

Soft landing zones. A soft landing zone is a pre-prepared work environment located in a foreign country, tailored to the needs of companies with Coventry Enterprise to provide soft landing zones in various locations in Mexico to help small and medium enterprises through the initial start-up process. For more information please contact ProMexico or UK Trade & Investment in Mexico.

Other sectoral incentives

Incentives for the automotive sector. From 2010, the NAFTA trade agreement will allow the importation of used cars of newer models with no restrictions. This will provide a wide range of opportunities for repair equipment and replacement parts.

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