Which are the best states in Mexico for doing business?

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Jul 172014

According to “Doing Business en México 2014: Entendiendo las regulaciones para las pequeñas y medianas empresas“, a study issued by the World Bank and the International Finance Corporation, Colima is the most favorable state in Mexico for doing business, followed by Aguascalientes, Guanajuato, San Luis Potosí and (perhaps somewhat surprisingly) the southern state of Chiapas.

  • Doing Business en México 2014 [pdf file]

doing-business-2014While the full report is in Spanish, an English language webpage offers easy access to the data for each individual city.

The rankings take into account the paperwork, time and costs associated with opening a new business, obtaining construction permits, registering industrial property rights and the resolution of commercial disputes.

The three states that improved most rapidly during the past two years were the State of México, Puebla and Quintana Roo. Guerrero was the state that most improved in business start-up, and the State of Mexico was the most improved city for construction permitting, while Guanajuato improved the most in contract enforcement.

Overall, the report concluded that the regulatory business environment in Mexico is converging towards the average performance of high income OECD economies.

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Three Mexican cities among the 100 most competitive cities in the world

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May 072014

Three cities in Mexico – Mexico City Metropolitan Area, Monterrey Metropolitan Area and Querétaro – are included on the 2013 list of “The World’s Most Competitive Cities. A Global Investor’s Perspective on True City Competitiveness”, a report issued by Site Selection magazine in cooperation with IBM Global Business Services.

It is the first time the city of Querétaro (2010 population: 805,000) has been included on the list; Mexico City and Monterrey are old-timers on the list.

The 100 cities studied all have a minimum population of 1 million inhabitants in the local labor catchment area and attracted at least 25 foreign investment projects in 2009-2011. The study aims to rank the competitiveness of cities “to attract investment and international projects in various sectors”, and to identify those locations with the best combined “cost-quality” for particular types of investment project.

The report presents rankings and findings for five different types of operations:

  • International headquarters, coordinating corporate operations in a global region
  • Financial services center of competence
  • Software development center
  • R&D center for life sciences, combined with pilot production
  • Shared services center, providing support for corporate operations in finance, customer support, human resources or IT
Criteria used to rank world's 100 most competitive cities

Criteria used to rank world’s 100 most competitive cities

Rankings are based on 30 factors or parameters (see chart above).

The most competitive cities in the world were London, U.K. (score of 78.0), Singapore (78.5), New York City (77.4), Amsterdam (76.3) and Hong Kong (75.9).

Mexico City Metropolitan Area was ranked as number 57, with a score of 55.8. Monterrey Metropolitan Area ranked number 72 (48.2) and Querétaro city ranked number 90 (43.6).

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The least cost business location

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Apr 152010

This table shows the cost of doing business in 10 countries, according to the latest (2010) KPMG guide “Competitive Alternatives” which compares business costs for more than 100 cities. The study uses a compound index of business costs, which includes 26 significant cost components, as well as a variety of non-cost factors such as labor availability and skills, economic conditions and markets, innovation, infrastructure and regulatory environment. It also incorporates personal cost of living and quality of life. The baseline for the scores is the USA which is given an arbitrary score of 100.0.

CountryCost of doing business
(USA = 100)

Mexico clearly offers the lowest cost for business of the 10 countries studied by KMPG with a business cost advantage over the USA of 18.2%.

In fact, in terms of the individual cities studied, Monterrey placed 1st as the most cost-efficient business location (18.5% less expensive than the average of the four largest USA cities—New York, Los Angeles, Chicago and Dallas-Fort Worth), while Mexico City placed 2nd (17.9% less expensive). 3rd place on the list was taken by the Canadian city of Montreal, 4th by Manchester (UK). Vancouver and Toronto occupied 5th and 6th, followed by the least expensive US location for business, Tampa.

Click here for the full report