Five metropolitan cities of Mexico including Mexico City, Monterrey, Toluca de Lerdo, Puebla-Tlaxcala, Guadalajara and Tijuana house almost 30 percent of the national population. This has occurred due to rapid urbanisation and heavy movement of people towards opportunity and progress. The Central Business District (CBD) located in Mexico City is a bustling zone of Commerce, Finance and Communications. Mexico’s elite are strategically positioned close to this hub.
What do we know about Mexican customers?
The total number of people in Mexico is 122 million (July 2015 est) with the poorest 10% sharing 2% of the national household income and the highest earning 10% sharing 37.5% of it (2010). 52.3 % of these citizens live below the national poverty line. In fact, uneven wealth distribution has been plaguing the country for years.
What does Mexico import?
- Metalworking machines
- Steel mill products
- Agricultural machinery
- Electrical Equipment
- Car Parts (for assembly)
Major import partners (of total exports):
- US (48%)
- Canada (3.6%)
- Germany (1.4%)
What are the major ports of Mexico?
Mexico’s 4 prime airports:
- Benito Juarez International Airport, Mexico City
- Cancun airport
- Guadalajara Airport
- Monterrey Airport
- Tijuana Airport
Mexico’s top ports:
What are the customs and tariffs regulations in Mexico?
The application required for the purpose of importing any goods into Mexico is known as a Pedimento. As an importer, you must also be registered as one with their government customs authority. The process of securing an import registration can be a bit tough. You should engage the services of a Custom Broker, licensed by the customs authority of Mexico to assist you with the entire process.
Mexico’s free trade agreements
The North American Free Trade Agreement (NAFTA) provides for the free flow of merchandise of various kinds from Canada and US.
Mexico has 10 free trade agreements with 45 different countries, some of which are Reciprocal Investment Promotion and Protection Agreements, and others are Economic Complementation and Partial Scope Agreements.
Import tax, tariffs and duty
Import tax and duty depends on the cost, insurance and freight value of the imported product. Added to which sales tax, customs processing fee and maybe excise can be included.
For your product to be considered under any free trade agreement, it is vital to disclose an authentic certificate of product origin. VAT is standardised at 16% of the CIF value, duty, DTA and applicable excise.
What is the distribution structure in Mexico?
Mexico’s wholesale market was responsible for 41% of the country’s annual turnover in 2012 and is expected to grow. These comprise primarily of food, beverage and tobacco players. The retail market, on the other hand, has been suffering due to specific economic reforms. But this hasn’t stopped multinationals from setting up camp in Mexico in the last four years. Slow and steady growth is the predicted mode for Mexico’s retail sector as it evolves to adopt modern techniques and Mexico’s middle class begins to flourish.
It’s vital to know about your customer base, legal matters, gateways and distribution structure for your expansion.
Having a local partner is beneficial if you’re planning on doing a joint venture in Mexico’s dynamic market to ensure the best result.