Business Opportunities in Mexico - Baja California
Mexican economy has proved a better performer above what experts had expected and the productive sector has allmost recovered its dynamic force. Business is improving in the region while tourism is still considered a high priority activity for the economic, social and cultural development of México.
Baja California’s international presence has been growing for years, mainly because of its geographical position, its natural resources, infrastructure, and most of all, its residents - who always show a positive attitude towards work-. The state is known for the diversity of its productive sectors. Agriculture, livestock, fishing and aquaculture reach high levels of quality. The valleys and coastal areas of the State are highly productive. Baja has been nationally and internationally acclaimed for its wine industry, which offers the opportunity to develop specialized tourism products related to the exploration and tasting of wine.
Mining has a great potential to grow because of its abundant mineral reserves that include precious, industrial and iron and steel metals to stone material for construction purposes. As for industry, there is an important production of glass, paper, furniture and wood products, automobile industry, cement and maquiladoras (manufacturers, factories). During the last few years the maquiladora industry has been a very important economic booster for a state that has become the main host for maquiladoras in the country. It has more then 700 factories, most of them from the United States and Asia. The electrical, electronic, metal-mechanic, wood products, plastic, glass and clothing maquiladoras are the ones that have excelled the most. Also, Baja California is a cluster in communications, providing most businesses with LAN, WAN, broad-band and other features needed for today’s ways of doing business.
From 1994, with the signing of the Free Trade Agreement (NAFTA), companies have the possibility of supplying themselves with foreign merchandise with preferential customs terms. This offers advantages that have allowed the increase in commerce and services available in the state. Baja California has a traditional vocation towards foreign commerce, the fact of its proximity to the California market and the freedom that consumers have to move in both countries have made the commerce of Baja California very competitive on an international level.
Title II of the ISR Law, which regulates how legal entities should calculate their taxes, is complex and in many cases there are specific rules for particular situations. Despite this, in this section we briefly describe the procedure. Income tax is calculated by fiscal years which, as a general rule, coincide with the calendar year. The income tax rate is 28 percent. There is also a requirement to make provisional monthly tax payments for the annual tax incurred during the fiscal year.
{mosimage} Mexico has a federal system, copied from that of the United States of America and, just as in all federal systems, there are powers reserved for the Federal Government, powers reserved for the States, and concurrent powers.
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This federal system is also reflected in the ability to impose taxes in Mexico, since in accordance with our Constitution, certain taxes can only be imposed by the Federal Government, others can only be imposed by the States, and others can be imposed by either the Federal Government or the States.
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As a result of the above, tax matters in Mexico can be analyzed from three angles: (a) federal taxes, (b) local taxes, and (c) the international aspect.
Currently, recycling is part of the city's informal economy, carried out by a combination of garbage collectors who separate and sell the goods for their own profit, scavengers who sell materials they find in landfills, nonprofit organizations and companies in the recycling business.
{mosimage}San Luis Potosi has been one of Mexico’s bright spots over the past three years. Although it is a small market, it is home to some of the largest and fastest growing manufacturing companies in the country. San Luis Potosi is centrally located along the NAFTA Highway mid-way between Mexico City and the border and has good access to the major ocean ports on both coasts. The city has abundant industrial land and a dedicated, although slightly under skilled, labor pool. Recent growth has made San Luis an institutional real estate market and its small size does not prohibit it from being considered a tier 1 market in Mexico.
{mosimage}Aguascalientes is a second tier manufacturing market in Mexico. Its location off of the NAFTA Highway makes transportation somewhat difficult both for northbound products and those heading into central Mexico. However, there are some major operations located in the city and the skilled labor force and lower production costs will continue to attract new companies. Nissan is the biggest story in town and has recently attracted some new mid-sized suppliers to the area. We expect this city to grow, but not at a pace comparable to the El Bajio region or cities with better transportation access.
The state of Puebla is known for its natural resources, archeological sites, historical buildings, its gastronomy, and above all, it’s industrial leadership, qualified labor, the innovation of its companies and the State’s commitment to the integral development of all its region.
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