Doing Business with Mexico
|Population||126 million (2020)|
|State system||Federative presidential republic|
|Head of State||Andrés Manuel López Obrador|
|Head of government||Andrés Manuel López Obrador|
|Currency name||Mexican peso (MXN)|
|Time shift||-7 o’clock|
|Nominal GDP (billion USD)||2,689.90|
|Economic growth (%)||4.8|
Mexico is the 16th largest economy and could become the world’s fifth largest economy by 2050, according to World Bank estimates. The Mexican market with more than 126 million inhabitants, roughly half of whom belong to the middle class, offers interesting applications for Czech products and services. Trade with Mexico is also facilitated by the fact that it has an extensive free trade agreement with the EU and an agreement on mutual investment protection with the Czech Republic. Mexico is also an interesting option for access to the US market thanks to the US-Mexico-Canada Free Trade Agreement (USMCA, formerly NAFTA).
Due to its strategic location, where it is the gateway to the North American continent as well as to Latin America, Mexico has historically strived for a balanced foreign policy and friendly relations across regions. Mexico is a democratic, politically stable country with an open liberal economy. It is a member of most international organizations, including the G20, WTO, OECD, CELAC and the Pacific Alliance, and is based on their standards. In the World Economic Forum’s competitiveness ranking, Mexico is ranked 48th out of 141 countries (2019), and according to the OECD, the degree of export risk is 3/7.
The head of state and at the same time the prime minister is the president, who is elected by direct election for a six-year term of office, without the possibility of re-election. Legislative power is exercised by a bicameral parliament consisting of the Chamber of Deputies and the Senate.
Mexico is a country rich in mineral resources (14th world producer of oil, 1st in silver production), but at the same time, in recent times it has become a manufacturing power with at least regional importance. GDP is made up of almost two-thirds of the service sector (trade, real estate, tourism), and one-third of industry. The most important industrial sectors are the automotive industry (the 6th largest vehicle manufacturer in the world), engineering, electronics, energy, food, aerospace and mining.
Mutual trade between the Czech Republic and Mexico has a long tradition, and thanks to the liberalization of trade, its volume grows every year. Czech manufacturers export a whole range of products and technologies to Mexico, an important part of exports are parts and electrical equipment of the automotive industry.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
Single emergency number (ambulance, police, fire): 911
Traffic accidents on the highway – green angels: 078
Police (resident protection): 5570 3503 and 5570 1910
Police for the district of Polanco: 5580 1922 and 5580 1713
Fire department (headquarters): 5768 3477
Information on telephone numbers: 040
Taxi service: 5280 2181, 5203 9113
Information line COVID19: 55 8633 8589 (Whats App)
Important web links and contacts
Office of the President: http://www.gob.mx/presidencia
Ministry of the Interior: http://www.gob.mx/segob
Ministry of Foreign Affairs: http://www.gob.mx/sre
Ministry of National Defense: https://www.gob.mx/sedena
Ministry of the Navy: http://www.gob.mx/semar
Ministry of Public Security: https://www.gob.mx/sspc
Ministry of Finance: http://www.gob.mx/hacienda
Ministry of Social Development: https://www.gob.mx/bienestar
Ministry of Environment and Natural Resources: http://www.gob.mx/semarnat
Ministry of Agriculture, Livestock, Rural Development, Fisheries and Nutrition: http://www.gob.mx/sagarpa
Ministry of Energy: http://www.gob.mx/sener
Ministry of Economy: http://www.gob.mx /se
Ministry of Education: http://www.gob.mx/sep
Ministry of Agriculture and Rural Development: https://www.gob.mx/sader
Ministry of Communications and Transport: http://www.gob.mx/sct
Ministry for the Functioning of Public Power: https://www.gob.mx/sfp
Ministry of Health: http://www.gob.mx/salud
Ministry of Labor and Social Affairs: http://www.gob.mx/stps/
Ministry for agricultural, territorial and municipal development:http://www.gob.mx/sedatu
Ministry of Tourism: http://www.gob.mx/sectur/
Ministry of Culture: https://www.gob.mx/cultura
General Prosecutor’s Office: https://www. gob.mx/pgr
Wide range of information about Mexico: http://www.visitmexico.com/es
State contracts in Mexico: https://compranet.hacienda.gob.mx/web/login.html
Information regarding COVID19: https: //coronavirus.gob.mx/
The Ten Commandments for Doing Business with Mexico
The PaulSourcing agency has prepared ten recommendations for doing business with Mexico for Czech entrepreneurs interested in business relations with Mexico. In 2020, it was supplemented with 4 current tips.
4 recommendations for entering the Mexican market during the coronavirus pandemic:
- Market analysis The current time is ideal for collecting and processing information: map the market competition, pricing policy, your potential clients, and whether the product is present on the market. Choose a trading tactic to enter the market. Study the basics of Mexico – identify the federal states where your potential distributor presence would be most appropriate: business in Mexico is built on personal relationships, so you need to look for your distributor where your clients are located. Czech automotive parts have a hard time competing with a business partner from the agricultural state of Guerrero.Save time with analysis and entrust the work to experts – not all information that you can freely find on the Internet is credible and true. When analyzing the market, the foreign office of PaulSourcing Mexico City (ZK Mexico) works with its internal contacts from associations and various organizations, consults the results with people directly from the “field” (e.g. distributors), and thus provides you with truly relevant information.
- Searching for business partners In Mexico, you will not find a comprehensive or regularly updated database of companies in your field. Interesting sources of information are associations, local industry organizations or Google, in which you can search for the given company with the help of key terms. Many distributors have no or very poorly maintained websites. In some cases (mainly for consumer goods) specific distributors can only be found in stores – in Mexico it is mandatory to list the distributors on the packaging. If you are already rooting the website, you will hardly find a contact person on it – in Mexico, due to the security situation, they are very careful about their personal data, so the only option is to contact the company by phone. Never write to a general email, because you will not get a reply – you need to call the company first.At this stage, ZK Mexico can help you prepare a list of potential business partners, complete with publicly accessible contact information. If the situation allows it and your product allows it, he will also do field research for you for retail and other similar facilities. It has its own personal database of contacts and distributors who might be interested in your product.
- Approaching a partner and offering cooperation Before taking this step, ZK Mexico recommends that you contact its office – each field currently operates in a different mode, and in some companies whose industry is going through a difficult period at the moment, you could meet a quick rejection. Communication with Mexican companies has generally slowed down – most of them are at home offices, so the only way to reach them is by email or through social networks (LinkedIn, Facebook, etc.). If you call the company, you will usually be answered by an operator whose line has been forwarded home. If he is lucky, he will forward you the relevant email to the contact person.Contact ZK Mexico and consult the most suitable date for approaching your potential partners. If you were to act hastily, contacting could have a counterproductive effect.
- Don’t rely on English Did Mexico appear to you as a promising country? Devote yourself to the preparation of marketing materials in the Spanish language and also consider expanding the sales department to include Spanish-speaking employees. The Spanish language opens doors, breaks down boundaries and builds friendships that the distributor will surely expect from you.
The Ten Commandments for Trading with Mexico
- Expect a looser concept of time It is necessary to expect in advance that the establishment of a business relationship will take longer than we are used to from Europe. But the reward for persistence is a quality business partner.
- Spanish guarantees success Although in many companies meetings can be conducted in English and an interpreter is sufficient in the beginning, it is advisable to count on Spanish for long-term cooperation.
- Gain personal trust Your business partner, your friend. You have to reckon with this rule in Mexico. If you want to start a long-term cooperation with your Mexican partner, you need to develop your relationship not only in the business sphere, but also in the personal sphere. Don’t be afraid to start each meeting with a topic related to your Mexican companion’s family or free time.
- Communication is the key to success A personal relationship can also be strengthened by regular trips to see a Mexican partner; in this regard, don’t be afraid to invite your partner to visit you in the Czech Republic. At the same time, always prefer a phone call to an e-mail. However, please respect the lunch break (approximately 13-16 Mexico time) and national holidays when communicating by phone.
- Tolerate lateness It is likely that your partner will not always be punctual, the concept of time is different in Mexico than in Europe. However, punctuality will always be expected from the Czech counterpart.
- Don’t forget a good presentation In Mexico, great emphasis is placed on the presentation of you personally and your company, so pay attention not only to quality promotional materials (they must be clear, concise and clear), but also to your appearance. In Mexico, as everywhere else, the clothes make the man.
- Do n’t criticize Be careful of criticism, even constructive criticism is perceived very negatively here.
- Interest in Mexican culture opens doors Prepare well for negotiations: prepare convincing arguments for your product and constantly emphasize it. At the same time, it is advisable to show an interest in Mexican culture, the partner will appreciate it. Avoid any criticism or topics related to politics.
- Make sure the arrangements are in place Be careful with promises and agreed upon practices, a Mexican will rarely say no to you, but that doesn’t mean you can count on the opposite. Constantly check in on the progress and make sure you both really understand where the negotiations are going so far.
- Small attention always pleases Anything that is connected with the Czech Republic, with your company or with the interests of a business partner, will certainly be positively received and will ensure the deepening of mutual cooperation. Gifts are welcome at any of your meetings.