Foreign Direct Investment (FDI) in Mexico is a key driver of the country’s economic development, as it promotes job creation, increases savings and foreign exchange earnings, stimulates competition, encourages the transfer of new technologies, and boosts exports.
According to data from the Ministry of Economy, between January 1 and September 30, 2024, Mexico registered 35,735 million dollars in FDI, representing an increase of 8% compared to the same period in 2023. Of the total, 86.0% corresponded to reinvestment of profits, 8.2% to intercompany accounts, and 5.8% to new investments. This growth reflects the confidence of foreign investors in the economic environment and the country’s competitive advantages.
FDI Composition
The manufacturing sector is the primary recipient of FDI, concentrating more than half of the investments, emphasizing industries such as transportation equipment, beverages and tobacco, chemicals, computer equipment, food, metals, plastics, and rubber. By the economic sector, 54.3% was allocated to manufacturing, 15.4% to financial services, and 9.3% to mining, which accounted for 78.9% of investment. To a lesser extent, it was followed by transportation (6.8%) and commerce (6.7%).
Meanwhile, FDI in reinvestment of profits registered a significant growth of 23.4%, going from 24,905.2 million dollars in 2023 to 30,744.8 million dollars in 2024. Intercompany accounts reached US$2,932.3 million, and new investments experienced a 26.6% contraction, decreasing from US$2,806.2 million in 2023 to US$2,060.4 million in 2024.
Geographic distribution of EID
Geographically, Mexico City is the primary recipient entity, concentrating 44.2% of the FDI received. By state, it is followed by the State of Mexico (7.3%), Baja California (5.6%), Guanajuato (4.7%) and Nuevo León (4.4%).
Origin of DIENTs
Regarding the origin of investments, the United States remains the leading investment partner, contributing 40.5% of total FDI flows for 14,473.9 million dollars as of September 2024. In addition, countries such as Japan and Germany occupy prominent positions as long-standing commercial partners in Mexico, with 12.5% and 10.9% of the total. In addition to these nations, Canada, Belgium, Argentina, South Korea, the Netherlands, Switzerland, and the United Kingdom are essential origins.
Mexico has a National Foreign Investment Registry (RNIE by its acronym in Spanish) to facilitate and regulate the entry of foreign investment. This registry gathers information and prepares reliable statistics on the behavior of FDI flows in the country. This registry is fundamental to maintaining a productive and competitive environment aligned with international best practices.
Challenges and opportunities
The manufacturing, automotive, and technology sectors continue to attract foreign investors to Mexico. The government has implemented strategies to encourage investment in renewable energy and infrastructure. However, the country faces challenges such as insecurity, corruption, and a lack of infrastructure in some regions. Despite this, Mexico has opportunities such as its strategic geographic location, access to important markets, and skilled labor force.
To take advantage of these opportunities, the government must continue to implement policies that promote investment, innovation, and economic growth, strengthen the rule of law, and combat corruption. Foreign direct investment remains key to Mexico’s economic development, which has great potential to attract more investment flows in the future.
If you are considering investing in Mexico, Englobally has the experience and the necessary team to advise you on incorporating the type of company that best suits your needs. In addition, we accompany you in key areas such as tax compliance, payroll management, and accounting, ensuring comprehensive support for your business.