Mexico’s new presidential decree: The Mexico Plan and tax incentives for foreign businesses
Prof Sergio Guerrero Rosas
by Prof Sergio Guerrero Rosas
The Mexican government has introduced a new presidential decree, commonly referred to as the Mexico Plan, aimed at fostering economic growth and attracting foreign investment. The plan includes a series of tax incentives designed to enhance competitiveness and strengthen Mexico’s position as a key global business hub. Given the evolving regulatory landscape, international businesses operating in or considering expansion into Mexico must stay informed about these new opportunities.
This initiative comes at a time when global trade policies are in flux, particularly with the renewed push by the Trump administration in the United States to impose tariffs on various imports. As protectionist policies create uncertainty for multinational corporations, Mexico’s strategic approach to tax incentives may offer an alternative pathway for businesses seeking stability and cost-efficient operations in North America.
Key aspects of the Mexico Plan
The decree primarily focuses on stimulating investment in strategic industries, supporting infrastructure development, and promoting innovation. The government has identified key sectors – such as manufacturing, technology, and renewable energy – that will benefit from enhanced fiscal incentives, making Mexico an increasingly attractive destination for foreign capital.
Tax incentives under the new decree
Several notable tax benefits have been introduced to encourage business development:
Corporate income tax (CIT) reductions
Eligible businesses in priority sectors may receive a reduced CIT rate for a specified period, lowering the standard 30% rate to as low as 20%.
Additional reductions apply to companies that invest in research and development (R&D) or infrastructure projects that align with Mexico’s sustainability goals.
Accelerated depreciation
The decree allows businesses to accelerate the depreciation of capital expenditures related to new investments, enabling faster recovery of costs and improving cash flow.
It is worth noting that this incentive does not apply to items such as furniture and internal combustion engine vehicles.
Value-added tax (VAT) exemptions and refunds
Companies engaged in export-oriented activities or operating within designated industrial corridors may benefit from VAT exemptions or expedited VAT refunds, reducing financial burdens on supply chain operations.
Tax credits for employment and training
Businesses creating jobs in priority sectors and regions may qualify for employment-related tax credits.
Additional incentives are available for companies investing in employee training and upskilling programs.
Special regimes for nearshoring and strategic investments
The plan introduces specific incentives for foreign companies relocating supply chains to Mexico as part of nearshoring strategies.
Tax breaks and regulatory streamlining apply to businesses establishing operations in designated economic zones and industrial parks.
Impact on foreign businesses
The Mexico Plan presents a significant opportunity for foreign companies to optimise their tax positions while contributing to Mexico’s economic development. Businesses should assess their eligibility for these incentives and consider strategic investments that align with the government's priorities.
However, navigating these changes requires careful planning. Companies must ensure compliance with local tax laws and leverage professional guidance to maximise benefits. International tax advisors and legal experts can provide crucial support in structuring investments effectively within Mexico’s evolving regulatory framework.
Conclusion
With its pro-investment approach, the Mexico Plan signals Mexico’s commitment to fostering a more dynamic business environment. Foreign businesses looking to expand their footprint in Latin America should evaluate these new incentives and integrate them into their tax and operational strategies. As the US tightens trade policies through tariffs, Mexico’s approach provides an alternative for companies looking to mitigate risks and maintain competitive supply chain advantages.
We remain at your service to provide further details and expert guidance on how your business can benefit from these incentives. Please do not hesitate to reach out for tailored advice and in-depth analysis suited to your needs.
Guerrero y Santana, S.C. provides its clients with a wide range of tax, legal, and consulting services. The firm helps clients, from individuals and small local businesses to major corporations and multinationals, to achieve their smallest aims and grandest ambitions. They are committed to providing specialised, personalised services to all those seeking reliable and up-to-date tax, legal, and business support.
GGI member firmGuerrero y Santana, S.C.Tijuana, Baja California, MexicoT: +52 333 120 05 38
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Prof Sergio Guerrero Rosas, Managing Director at Guerrero y Santana, has over 25 years’ experience advising companies from SMEs to multinationals, as well as individuals, on tax and estate planning. He is also Global Vice Chair of the GGI Trust & Estate Planning (TEP) Practice Group. Contact Sergio.
