With the rapidly evolving challenges in global business today, such as changing trade relations, the impacts of the pandemic, travel restrictions, labor shortages, and rising costs, many companies are seeking long-term solutions to ensure business continuity, reduce costs, and enhance supply chain resilience—and Mexico presents a great option. Mexico is the 15th largest economy globally, with 17% of its GDP coming from the manufacturing industry, and 90% of manufactured goods being exported. It is also the 9th largest recipient of FDI worldwide, receiving $29 billion in 2020 and over $12 billion in the first half of 2021. Here are five main factors contributing to Mexico's exceptional stability and growth, making it ideal for companies considering nearshore or offshore manufacturing: Location: Mexico’s proximity to the US allows for logistics and transportation efficiency. Compared to China, shipping goods is 80% faster and 75% cheaper. This proximity also enables same-day delivery in some cases and allows for better quality control and efficient employee training due to the same time zone. Market Access and Integration: Mexico’s 14 free trade agreements with over 50 countries cover 60% of the world’s GDP, reducing trade restrictions. It is a significant trade partner with the US, with over 18,000 US-invested companies operating there. Moreover, 70% of all FDI from the US is in Mexico, and 45% of raw materials used in Mexican manufacturing come from the US. Manufacturing and Supply Base: With over 50 years of experience, Mexico has developed a mature base of OEMs, suppliers, facilities, and an efficient, integrated supply chain, allowing the export of high value-added products. Skilled and Affordable Labor: Mexico's population of over 126 million, with an average age of 29 years, includes 75 million economically active individuals, expected to grow to over 80 million by 2040. The country has a significant number of English-speaking managers and employees, with 5 million students in higher education, 1.5 million of whom are in engineering and technology-related programs. The labor environment is stable and productive, with five decades of experience in manufacturing. Savings Programs and Tax Advantages: International companies in Mexico can benefit from various programs and tax savings under trade agreements such as the USMCA and CPTPP. Programs like IMMEX and PROSEC offer tax deferrals or exemptions, promoting sectors such as automotive, textiles, and electronics. With Connecta Consulting we can help you create the best strategy for starting your operations in Mexico, including establishing a stand-alone operation, forming a joint venture, acquiring an existing operation, outsourcing, or working with a shelter service provider like us. Each option has different levels of risk, liability, cost, and timelines, with shelter programs often being the most advantageous for international companies.