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from being one of the largest economies of the world to being a member of free trade agreements Mexico presents lots of exciting business opportunities for new market entrants however with benefits there comes some drawbacks as well from insecurity issues to cultural differences to assume is 'no sperm its there are also some disadvantages and ethical implications of doing business in mexico therefore investors must learn the ins and outs of mexico's business infrastructure customs and laws and the potential risks associated with starting and managing a business in mexico this video sheds light on the pros and cons of doing business in Mexico a proper understanding of the pros and cons of doing business in Mexico not only helps limit the risks involved but at the same time guarantees an ideal business start with the pros of doing business in Mexico Mexico is a country with the largest number of free trade agreements in place the country maintains free trade agreements with almost 50 different nations most importantly it is also a member of the north american free trade agreement with various free trade agreements in place business owners in Mexico can enjoy global market access and carry out import/export activities without the cost of tariffs or at extremely low rates Mexico is an emerging market economy with great business opportunities its high value market with low competition makes it easy for new businesses to scale and succeed the high potential and low competition market makes it possible to easily dominate your niche by providing good quality services or products because what you provide is not readily available welcome welcome welcome to Mexico's first $1.00 shop quality products for dollar one only hurry up and get your favorite products oh wow that's amazing let's go everything for dollar one really Yahoo this way you have got definite chances to becoming an industry expert and easily establishing your brand without facing fierce competition Mexico's economy has remained pretty stable over the years this makes Mexico an ideal place to start a business or invest in a business without worries of economic disaster the exchange rate between the US dollar and the Mexican peso is very much stable the exchange rate has been pretty stable at about 18 pesos to the dollar the stable exchange rates mean your purchasing power stays constant especially if you keep the money obtained in Mexico for reinvestment and then there is always the opportunity to channel more capital to expand business operations the labor force in Mexico is highly skilled the country has hard-working smart and intelligent labor that originates from science technology engineering and mathematics fields therefore made in Mexico products are of the best quality standards Mexico offers skilled labor force in cheap rates the average wage is only 20% more what Chinese firms offer Plus businesses enjoy the perks of being present in the North American economy Mexico is in close proximity to the United States of America both countries share a border which means people of USA doing their business in Mexico can enjoy several key advantages like managing business operations without much of a stress and getting on site within a few years in the case of border cities like El Paso and Juarez workers can even do a daily commute furthermore the Mexican time zones correlate with central mountain and Pacific time zones of the USA the corresponding time zones make it easy for the USA business owners to communicate with their Mexican business partners and workers during normal business hours this is very much beneficial in contrast to managing business operations in third-world countries as us say managers with businesses in Mexico don't have to face time zone delays schedule late-night meetings or meet the huge expenses of visiting far-flung nations the Mexican market of hundred and twenty million consumers readily accepts American manufacturing and prefers it more over any other country made product this is another big advantage for American business owners looking to launch or expand their business operations in Mexico as the Mexican consumers would readily purchase their products there is robust word-of-mouth marketing in Mexico this is because most Mexicans have large extended families they love spending time with their families they love visiting each other they love partying with their friends and family the center of Mexican social activity is family as everything revolves around the family therefore if you offer quality product or service to the Mexicans you are guaranteed to experience robust word-of-mouth marketing by the consumers who will share positive experiences with your company at family gatherings and parties and that's better than a paid billboard or social media advertisement so make sure you offer best quality products or service to the Mexican consumers as each happy customer can steer dozens of new customers your way Mexico has well-established business laws and special tax policies the country has strong financial laws in place getting the work permit is quick and easy and there is 100% business ownership for both locals and internationals there's no shortage of business consulting agencies in Mexico for foreigners trying to establish business operations might take a lot of time this is because the paperwork laws taxes and policies might be quite different from that of their native country but worry not as you will easily find business consulting agencies in Mexico which will efficiently handle all your stress manage the paperwork process and help enable business operations in the shortest time possible Mexico offers strong legal protection for intellectual property rights the fully secured protection helps protect your company's patents as well as eliminates risks like copyright issues Mexico has lower personal living expenses the cost of living is almost half of what the living expenses in the USA and Canada with lower living expenses business owners are at a great advantage because this way they can enjoy luxury lifestyle in a small budget they can save money for business investments they are less likely to deal with financial crisis avoid being going broke at the end of the month and remain away from financial stress Mexico is in a great position geography wise it is the connection between North Central and South America which stand to benefit the export sector there is political stability in Mexico the country's political stability is a significant plus for businesses as it ensures a well-equipped ecosystem for business development also the government offers several key benefits to Lear investors now let's go through the cons of doing business in Mexico getting your business started in Mexico takes around two months the biggest one-time cons of doing business in Mexico is that it takes around two months for your business to become fully operational this includes getting a construction permit registering your company getting water and sewage connection and getting an electricity connection furthermore to get each of the permits and utilities every business owner has to go through several procedures such as dealing with Public Registry of property obtaining Certificate of Good Standing obtaining zoning certificate stating specific land use registering with Mexican social security Institute getting inspections and going through lots of bureaucratic processes so you see that getting your business started in Mexico is a long and tedious task which means a business owner has to compromise so much time for this one time process and you know what a single mistake in any of the processes can reverse the complete process and take you back to the initial stage so if you are new to Mexico and aren't familiar with the business laws and regulations it's recommended that you take the services of a reputed business consulting agency to help you get started in a minimal timeframe taxes in Mexico requires considerable time and effort of more than 240 hours businesses in Mexico have to pay tax six times a year spending more than 240 hours in total Mexico ranks ninth in the list of top 10 most complex jurisdictions for financial compliance in terms of bookkeeping Mexico tops the list with the worst ever complexity rating of 78 percent before a business owner needs a proper Accounts Department to handle all the stuff but don't worry the tax procedure gets easier once businesses get used to the process it takes around four hundred days to enforce a business contract when you start doing business in Mexico starting a business in Mexico get ready to wait for up to a year and go through 38 different procedures to successfully enforce a business contract the relationship oriented culture of Mexico may annoy you if you are not used to it task oriented societies like the USA get down to business very quickly on the other hand relationship oriented societies like Mexico tend to focus on building trust and good relations before getting down to business here's an example which will clear your understanding regarding the differences between task oriented society and relationship oriented society an example of boss complaining about company's sales dropped with his employee in task oriented society hey Sam can I get to know why our product sales have dropped this quarter respected sir as per my research there's a new competitor in the town who has stepped in with an innovative new marketing campaign and this is the reason why our sales are currently suffering you are a senior member of our company's marketing department so I want you to get to the bottom of the issue and fix it as soon as possible I want good results this new quarter you may leave now thanks for your time okay boss you will not be disappointed this time an example of what's complaining about companies sales drop with his employee in relationship oriented society hey Ben how are you fine thanks how are you doing sir I am good how were your Christmas vacations with your family I enjoyed a lot sir I had a way all the time with my family oh that's great may you always be happy thanks sir for your blessings actually Ben I called you here because I am pretty much worried regarding my company's sales you see how our sales have drastically declined this quarter you are this company's senior and most efficient marketing employee I want to know why has this happened and how can we combat this decline yeah boss you're right it was a disappointing quarter for the company however you please don't worry sir because I have figured out why has this happened and how to overcome this sales slump so what's the issue and how to fix it actually sir there are some new competitors in the town who have come out with innovative new marketing campaigns I have enhanced our marketing campaign as well and I am confident that sales will boost this new quarter this time our company will not fall short of its goals that's great Ben go forth and conquer from these two different examples we have seen that in task oriented societies like the USA people get down to business directly this is because all that socializing talking about family and stuff like how are you doing seems like chitchat or a waste of time on the other hand in relationship oriented society like Mexico directly getting down to business is implying that the business is more important than the relationship and with the Mexican sense of tradition no amount of business can be more important than an individual so it seems rude to get down to business too quickly without all of the niceties the indirect communication with high context culture may annoy you if you are not used to it Mexico has an indirect high context culture which means as a listener you have to pay attention to not only what is said but also focus on how it is said or the manner in which it is said a yes could mean yes but it could also mean no or maybe here's an example which will clear your understanding of a society with indirect communication and high context culture hey Ben let's shed you the one-on-one business meeting this Sunday I have expansion plans for my company you are the most experienced and best performing employee of this company so I consider you the perfect fit to share my expansion plans and get rich ideas and suggestions from you hmm boss this coming Sunday yeah Ben oh man this Sunday I have planned a picnic with my family I promised them it's been three months we haven't spent time together but how should I say no to my boss he has always been very supportive and caring so Ben what are you thinking actually boss this Sunday I will hm-hmm okay boss you may confirm the meeting I will come that's great Ben let's meet at 3:00 p.m. this Sunday evening it's 3:30 p.m. Sunday and Ben hasn't arrived yet let me call him and ask where is he he is not attending the phone call I think he will not come boss and pen meet on Monday morning hey Ben why didn't you come yesterday where have you been I am extremely sorry boss actually there was a family emergency I was too much occupied as I had to deal with it let's reschedule our meeting - this coming Sunday [Music] in short indirect communication is a way of communicating wherein a person chooses to act out what they really mean instead of saying it directly with the use of tone of voice tone gestures and facial reactions a person can say something and mean entirely different since the communication is subtle and diplomatic so you have to pay attention to not only what is said but how it is said you need to probe deeper to understand both the content and the context in which it is said for example you have seen how been showcased several gestures to indirectly tell his boss that he can't attend the Sunday meeting there was a change of facial expressions he changed his expressions from this to this to this and to this he also took a lot of time to think and said several times as if he is unable to decide on what to do but why do Mexicans prefer indirect communication the reason for this is that they want to avoid conflicts avoid arguments be in the safe side or to ultimately save face therefore as a listener you need to properly interpret the conversation or ask the same thing very politely if you want a correct answer to your question one other disadvantage of doing business in Mexico is the language barrier the country is home to intelligent and skilled bilingual workers but Spanish still remains the language of business here by law you have to label all your products in Spanish as well as present all documents such as tax documents to the local government in Spanish there is insecurity in Mexico but only to some extent the country is dealing with several insecurity issues that include corruption bribery drug trafficking and violence but one very important thing that you need to understand is that insecurity does exist but just like every other country it tends to be concentrated in isolated areas only where the main cities are quite safe but the isolated towns have insecurity levels secondly insecurity has considerably reduced in the past years and continues to be declined in the future the government has launched crackdowns against drug mafias corruption and violence which has greatly improved the country's law and order situation overall Mexico has a well-established business infrastructure which make it an ideal and promising place to doing business the country provides all the facilities to smoothly carry out work operations for all types of businesses plus there's an opportunity for businesses to get hold of the low competition but high potential market and earn lots of profits so these were the pros and cons of doing business in Mexico for a detailed guideline on Mexico's business environment and profitable tips visit perfet comm slash mexico - business thanks for watching wishing success and power to you all