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In Mexico, well-defined laws ease growth


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Mexico flag

Flag Facts

The green, white and red vertical bands signify (in order) hope, joy and love; peace and honesty; and hardiness, bravery, strength and valor. Mexico’s coat of arms is derived from a legend that the wandering Aztec people were to settle where they would see an eagle on a cactus eating a snake; the city they founded, Tenochtitlan, is now Mexico City.

Location: With the United States to the north and Belize and Guatemala to the south, Mexico also borders the Caribbean Sea and Gulf of Mexico. It’s about three times the size of Texas.

Language: Spanish

Total Population: 124.5 million

Capital: Mexico City

Government: Federal republic

Religion: Roman Catholic (82.7%)

Economy: Mexico is the 15th largest economy in the world and second largest in Latin America. After Canada and China, Mexico is the United States’ third largest trading partner and second largest export market; 2016 saw $262 billion in U.S. sales to the country. Mexico’s government, led by President Enrique Peña Nieto, has emphasized economic reforms and since 2013 the country’s economic growth has averaged 2 percent annually. The economy is vulnerable to global pressures, such as lower demand, rising interest rates and low oil prices. Income distribution remains highly unequal, and while unemployment was 3.6 percent in 2017,  underemployment may be as high as 25 percent.

News note: Mexican views of the U.S. took a negative turn in 2017 according to multiple reports, including a Pew Research Center survey that found nearly two-thirds of Mexicans express a negative opinion of the U.S. That’s a dramatic shift from 2015, when Pew found that 66 percent of Mexicans held favorable views of the U.S. and one that coincides with the start of President Trump’s term. Trump continues to be a frequent and vocal critic of Mexico, consistently renewing his promise to build a border wall.

GDP (official exchange rate): $1.14 trillion

Currency: Peso (conversion rate at press time: 1 MXN equals $.054 USD).

Franchising in Mexico: The Mexican Franchise Association notes that of the country’s more than 13,000 franchise concepts, about 85 percent of them are Mexican brands. U.S. concepts account for about 6 percent of franchises, with food and restaurant brands being the most popular, in addition to a growing services segment.

Franchise laws and regulations are well defined, and the requirements to grant franchises are the same for local and foreign brands. Government corruption, however, is still considered the most problematic factor for doing business in Mexico, and low intellectual property rights protections are a concern.

Ease of doing business ranking by World Bank: 49, unchanged from 2017.

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