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International Management and Business Administration THEARTOFBEINGALOCLWORLDWIDE.

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Presentation on theme: "International Management and Business Administration THEARTOFBEINGALOCLWORLDWIDE."— Presentation transcript:

1 International Management and Business Administration THEARTOFBEINGALOCLWORLDWIDE

2 International Management and Business Administration InterGest THE ART OF BEING LOCAL WORLDWIDE Doing Business in Mexico

3 International Management and Business Administration Thomas Wagner Fact Sheet: Capital: Mexico City Official language: Spanish Population: 112 Mio. Area: 2 Mio. km 2 Currency: Mexican Peso (MXN) President: Enrique Peña Nieto ( ) GDP: trillion USD in 2011* Agriculture (3.8 %) Industry (34.2 %) Services (62 %) GDP per capita: 14,800 USD in 2011* MEXICO

4 International Management and Business Administration Thomas Wagner In recent years Mexico has become increasingly attractive as a location for doing successful business. This fact has also been recognized by the German car manufacturer Audi which therefore decided to open a new plant in Mexico. By the year 2015, the company will then start its production of the Q5 SUV. Audi wants to expand its presence in the North American market while leveraging the purchasing power of Mexican consumers to increase their business success. The company follows in the footsteps of many other international corporations and SMEs, which are already successfully operating in Mexico. And this for good reason! The Mexican market is not only characterized by extensive resources of skilled labor, but also benefits from a well- developed infrastructure and proximity to the U.S. dollar area. What Audi is able to do, you can do too! So what are you waiting for?

5 International Management and Business Administration Thomas Wagner Don´t underestimate the potential of the Mexican market! The most important trading partners for the Mexican export are: The United States, Canada and Germany. The most important trading partners for the Mexican import are: The United States, China, Japan and Germany. Mexico ranks No. 12 among the largest economies and trading nations worldwide A bilateral preferential agreement facilitates trade with the European Union. Over 1,000 German companies are already established in Mexico, primarily active in the automotive, pharmaceutical, chemical and electrical industry. The Mexican government has steadily improved and simplified the legal framework for foreign investments over the last years. Mexico offers significant savings in labor force costs compared to other potential investment locations in America, Europe or Asia.

6 International Management and Business Administration Thomas Wagner Foreign Direct Investments (FDI) The amount of FDI increased up to 4,372.4 million USD by March 2012, reported by 1,820 Mexican companies with foreign capital participation. The FDI figure is comprised of 1,207.5 million USD (27.6%) of new investments; 2,230 million dollars (51.0%) of reinvestment of profits; and million dollars (21.4%) between carriers. Source: Secretaría de Economía. Dirección General de Inversión Extranjera

7 International Management and Business Administration Thomas Wagner The International Monetary Fund (IMF) prognosed a significant growth for Mexico in 2012 and 2013, compared to the USA and Canada. The outlook for Mexico, is closely tied to developments in the United States. Source: IMF World Economic Outlook, April 2012 Growth Forecast Overview of the World Economic Outlook Projections (%)

8 International Management and Business Administration Thomas Wagner Your entrance possibilities into the Mexican market: Franchise partners Own distribution office Own Company Subsidiary Joint Ventures Distribution partners

9 International Management and Business Administration Thomas Wagner Legal Forms The most commonly used legal forms by foreign investors are: Stock corporation with variable capital (Sociedad Anónima de Capital Variable) Limited liability company with variable capital (Sociedad de Responsabilidad Limitada de Capital Variable) Minimum capital required: $0.00 MXN (before 2012: $3,000 MXN S. de R.L. de C.V. $50,000 MXN S.A. de C.V.) In addition to the minimum amount of capital it is possible to determine additional, variable amounts of capital by contract or corporate statutes. Thus, in the event of a capital increase or reduction only a single shareholder resolution is necessary, but not a statutory amendment. Companies can be founded for an unlimited period. At least two shareholders are required to found the company.

10 International Management and Business Administration Thomas Wagner Taxation Federal taxes Income Tax (Impuesto Sobre la Renta, ISR) 30% Increased for 2010 to 2012 to 30% with a planned reduction to 29% in 2013 and to 28% in Flat Tax/ Cash-Flow-Tax (Impuesto Empresarial a Tasa Única, IETU) 17.5% Value Added Tax (Impuesto sobre el Valor Agregado, IVA) 16% Income Tax and Single Rate Business Tax can be offset! State taxes Payroll Tax (Impuesto sobre nominas) Vehicle Tax (Impuesto sobre tenencia vehicular) Municipal Taxes Real Estate Transfer Tax (Impuesto sobre transmisiones patrimoniales)

11 International Management and Business Administration Thomas Wagner Free Trade Agreements (FTA) Mexico holds 12 Free Trade Agreements and one Economic Partnership Agreement (EPA), ranking the second position worldwide. These free trade agreements allow Mexico to access the markets of 44 countries, including the United States, Canada, the 27 members of the European Union and Japan. Mexico also has 5 Economic Complementation Agreements (ECA), as well as three Partial Scope Agreements (PSA). FTA ECAPSAEPA North America FTA ECA ArgentinaPSA Panama EPA Japan FTA G3 Colombia ECA BoliviaPSA Ecuador FTA Costa Rica ECA CubaPSA Paraguay FTA Nicaragua ECA Brazil FTA Chile ECA Mercosur European Union FTA FTA Israel European Free Trade Association FTA FTA Northern Triangle FTA Uruguay FTA Peru

12 International Management and Business Administration Thomas Wagner PROSEC & IMMEX The Mexican government implemented the Sector Promotion Program (PROSEC) and the Industrial, Maquiladora, Manufacturing and Export Program (IMMEX), to encourage and support national exports and to promote foreign investment in Mexico. PROSEC aims at improving competitiveness in the manufacturing process. Several industrial sectors are favored by the Mexican government by allowing the importation of specific goods (components, parts, raw materials, capital assets, etc.) with a preferential customs tariff. IMMEX aims at granting tax and customs benefits to authorized companies. Under certain conditions, raw materials and capital assets can be imported VAT free and also sales between IMMEX entities are not subject to VAT.

13 International Management and Business Administration Thomas Wagner Mexico City Montecito 38 Piso 21, oficinas 1 y 2 Col. Nápoles Del. Benito Juárez México, D.F. Querétaro Ecuador No. 4 Lomas de Querétaro Querétaro, Querétaro Tel.: +52 (442) Fax: + 52 (442)

14 International Management and Business Administration Thomas Wagner Thank you… … for your attention!


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