Doing Business In (Insert Country Name Here) - Department of ...

Return to table of contentsChapter 6: Investment Climate• Openness to Foreign Investment• Conversion and Transfer Policies• Expropriation and Compensation• Dispute Settlement• Performance Requirements and Incentives• Right to Private Ownership and Establishment• Protection of Property Rights• Transparency of Regulatory System• Efficient Capital Markets and Portfolio Investment• Corporate Social Responsibility• Political Violence• Corruption• Bilateral Investment Agreements• OPIC and Other Investment Insurance Programs• Labor• Foreign Direct Investment Statistics• Web ResourcesOpenness to Foreign InvestmentReturn to topMexico is open to foreign direct investment (FDI) in most economic sectors and hasconsistently been one of the largest recipients of FDI among emerging markets. Inrecent years, Mexico has become increasingly aware of its loss of competitivenessrelative to other emerging economies, notably China and India, as it has failed toaddress serious crime and safety issues or pass much needed reforms. Recentgovernment successes in the reform agenda have improved business confidence,underpinning increases in foreign investment. Mexico has significantly increased thetempo of efforts against organized crime, but rising narcotics-related violence remains acause for concern. Mexico will need progress on both fronts to regain competitivenessas an FDI destination, particularly for non-U.S. investors. The current internationaleconomic downturn adds to the challenge, as FDI continues to be scarce and investorsremain cautious.Foreign investment in Mexico has largely been concentrated in the northern states closeto the U.S. border where most maquiladoras are located, and in the Federal District(Mexico City) and surrounding states. The Yucatan peninsula, historically an area fortourism investment, has seen industry in other sectors grow due in part to the ability toquickly send goods from its ports to the United States. Manufacturing, retail/commerce,and financial services have received the largest amounts of U.S. investment in the pastfew years. Historically, the United States has been the largest source of FDI in Mexico.U.S. investors provided 40 percent of FDI in 2008.In June 2007, President Calderon created ProMexico, a federal entity charged withpromoting Mexican exports around the world and attracting foreign direct investment to