Mexico has one of the largest economies in the world, with a population considered as the hardest working in the world in terms of annual hours worked.
It comes to no surprise that many businesses choose to set up a wholesale business in Mexico. Mexico has a welcoming business environment, and the government provides numerous benefits to lure business investors.
Why Start a Business in Mexico
Reduced Costs
The main benefit of doing business in Mexico is the reduced costs. The cost of labor is reduced dramatically that other adjacent countries. This creates the biggest disparity in the cost of doing business when compared with the US.
Reduced operations costs
Staring and doing business in Mexico is cheaper as compared to states. Economies of scale reduced the cost when it comes to the location of the business, hiring labor and managerial staff, and any resource used in business.
Emerging markets
Although the Mexican economy is experiencing a boom and an influx of foreign investment, it remains an emerging market.
Consequently, by getting in business early and beating the rush, you can take advantage of unique opportunities or have a chance to corner your share of the market before other competitors can establish a foothold.
Increased capital
Countries such as Mexico that have emerging markets normally provide different businesses with access to the new capital.
The increase in present capital makes it easier to expand into the country and enhance product potential. Starting a business in Mexico will not only boost growth but income as well.
Economic stability
An economy that is volatile and unstable makes it hard for businesses to make profits, mainly in foreign nations. After the 2008 recession, The Mexican economy has remained stable and resilient, especially in comparison to the rest of the world.
The banking system has remained stable, with projections indicating that the economy will progress to be a good environment for business. The financial sector is well developed. The funding scene is mature.
Free Trade Agreements
Mexico has the biggest number of free-trade agreements in the world with 49 countries. The liberalization of trade has impacted the county is one of the most welcoming and competitive trade economies worldwide. All of the trade policies are focused on reducing the cost of doing business.
Tips on Starting a Business in Mexico
Decide what business model you want
The first step to starting a business is considering the business mode you want to go with. Essentially, most businesses can either make, market, deliver or count. However, you can choose either franchise, retailer, distributor, manufacturer, or service provider.
The most important thing to consider is to seek the most qualified professional to assist in the city where you want to locate your business. It may be hard to navigate government processes without the help of professional advice.
Make a business plan
It doesn’t have to be fancy or even complete, but you want to have this foundation to refer to as you set up and run your business, and there are lots of free templates online.
Add some specifics relevant to this business—and the fact that you’re in Mexico. Thoughtful Vision and Mission Statements will also give you direction and keep you on track.
No matter how much you plan and prepare, there will always be unexpected situations, decisions, and opportunities that come your way, and having a solid, detailed business plan will help you meet these challenges with confidence.
- Registering your company
- If you already have a business idea and a business plan, you need to move on to register your company. First, you need to be authorized by Secretaria de Relaciones Exteriores to use your desired company name. This can take a couple of days.
- You will then need to submit an incorporation deed.
- Apply to Secretaria de Hacienda y Credito Publico to get a tax identification number.
- In case you want to get employees; you will register to Instituto Mexicano del Seguro Social to create pension accounts.
Obtaining permits
After incorporation, you will need some municipal permits before you are required to start a business. No matter the location of the business, you will need to advise your local authority of when the business is scheduled to commence.
In most of the cities, you are required to apply for different zoning permits before you conduct any business.
If you are planning on manufacturing any product, you are required to submit to Secretaría de Medio Ambiente y Recursos Naturales an environmental impact statement to ascertain that your business complies with the laws of air, noise and waste materials.
Find your distributor
You need to find a distributor. It is important to know that wholesalers are not distributors. So make sure you have a distributor that will help you in distributing the goods.
The man function of the distributors is to ensure that the products get to customers. There are different dropshippers and distributors you can get online who are into distribution.
The man function of the distributors is to ensure that the products get to customers. There are different dropshippers and distributors you can get online who are into distribution.
There are lots of reliable distributors for you to choose from, like Nihaojewelry, Chinabrands, Alibaba and so on.
Find your retailers or buyers
While searching for a wholesale market for your products, also equally think that the retail market is huge to make your products get huge attention. Do not neglect the retail marketers who eventually could turn out to be the largest buyers of your products.
Leading sectors for doing business in Mexico
Tourism, retail commerce, communications, financial services, automotive, gas, and oil are some of the biggest industries in Mexico. They play a big role in the economy. Mexico has the world’s eleventh greatest GDP by purchasing power parity and sixteenth largest in nominal terms.
Conclusion
If you are looking to expand your business to Latin America, then Mexico should be the place to start with. The country has numerous benefits that you should take advantage of.
It is open to potential investors and traders. However, you need to understand the legal side before designing your business plan, which will create a base for smoother market entry.
