In the case of Mexico, it is explained by the existence of regulations that greatly contribute to its complexity, for example, the time it takes for a person to open a bank account and the different requirements to obtain a work visa.
But the report indicates that, on the other hand, Mexico has made progress in digitalization with systems such as electronic invoicing and electronic signatures, which simplify accounting.
In addition, work is being done to improve money laundering prevention requirements to increase investor confidence, although this at the same time means greater audits for companies.
The Index includes 79 jurisdictions representing 93% of world GDP and 88% of net global flows of foreign direct investment (FDI), and analyzes 292 annual indicators.
It focuses on essential data on key aspects of doing business, such as the times for establishing entities to become operational, payroll and benefits management, regulations, taxes and other compliance factors.
The report also points out that, since 2020, Mexico has benefited from the United States’ adoption of nearshoring for the supply of manufactured products.
Before the pandemic, the United States relied on trade in goods from mainland China, Vietnam and Thailand, among other countries. When this stopped and relations with mainland China worsened, the United States was forced to reconsider its trade routes, as a result of which it has moved much of its business to closer jurisdictions, such as Mexico.
“Mexico was a perfect place for the United States to establish business. Covid-19 brought big changes to US supply chains and we were a good option because we are cheap and have space and infrastructure. But we do need to work on certain aspects of business, such as digitizing taxation. “This will help even more people want to set up businesses here.”
This opportunity also presents challenges, as companies operating in Mexico face difficulties in finding qualified labor, long procedures to establish a company, with many elements to comply with, and unclear tax requirements.
But to combat these difficulties, the country is working to improve tax incentives and tax treaties with the United States.
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