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Reasons to Consider Locating Your Startup in Mexico

Reasons to Consider Locating Your Startup in Mexico

Giving consideration to the location of a start up business is often underrated, and many new business owners choose to start their venture in the town or city that they already live in. While this makes perfect social sense and is potentially less of an upheaval than moving elsewhere, there are several good reasons that you should consider relocating to a country like Mexico where there are several advantages for new business owners.

The obvious benefit is the weather, but if you are looking for somewhere that offers nice beaches, cocktails and sunshine, then you would probably head to the Caribbean with your extraordinary business idea.

Mexico has a lot more going for it than just a wonderful climate.

Lower Labor Costs

If your business requires the manufacturing of a product or indeed any kind of labor, then Mexico offers a highly skilled and qualified workforce at a fraction of the cost of the United States. To put that into perspective, labor costs in Mexico are 88% lower than Canadian labor costs which has a significant impact on your bottom line.

Lower Cost of Living

Given that most start ups will experience financial difficulty at some point in their infancy, lower labor costs will benefit your business, but a lower cost of living will ultimately benefit you, especially if you are required to dip into your personal finances in order to keep your fledgling company afloat.

Currently, the cheapest cities to live in in Mexico include:

  • Tlaxcala
  • Zacatecas
  • Tepic
  • Guanajuato
  • Tuxtla Gutierrez

The rent in Mexico is much cheaper than it is in the US, although if your accommodation is near to the beach or city center, it will increase in cost. If you end up renting a large apartment in Mexico City, your average monthly cost would be about Mex$21,000.

Reduced Operational Costs

In-keeping with the notion that everything is cheaper in Mexico, consider your operational costs when running a business. Your office lease will be lower, industrial space should provide cost effective human resources in Mexico, and you can enjoy lower tax rates.

Access to Duty Free Countries

Mexico enjoys eleven free trade agreements that include forty-six countries with which products can be imported and exported duty free. This represents more trade agreements than any other country in the Americas. For companies that intend to manufacture goods for exportation, this can then be a massive advantage. This is because the process is highly simplified when compared to that of the United States’ export procedures.

According to reports, Mexico’s Free Trade Agreements are what made it the 13th largest export economy in the world, with a total of $393 billion in exports. Having FTAs has opened up a whole host of opportunities for Mexico.

A Highly Skilled Workforce

Technical training centers and colleges have been established all over Mexico in trades such as electrical, welding, computer programming, plastic injection molding, engineering and construction to name just a few. This is part of the government’s commitment to creating a population that is highly educated and skilled to meet market demand as companies move their businesses to Mexico.

According to Oscar Suchil, the director of graduate affairs at the public National Polytechnic Institute – where 60% of its 163,000 students were reportedly studying engineering – Mexico is “now one of the top producers of engineers in the world.” And they certainly have the figures to back up this statement, with Mexico proving to be a worthy adversary in the engineering industry against rivals including the US, United Kingdom, Germany and Poland. Guadalajara is another area of Mexico where the government is keen to start implementing programs to prepare for the next batch of young engineer students.

Some of the most prominent universities for engineering in Mexico include:

  • National Autonomous University of Mexico
  • Metropolitan Autonomous University
  • Universidad Autonoma de Nuevo Leon
  • Universidad de Guanajuato
  • National Polytechnic Institute
  • Tecnologico de Monterrey

Simplified Operations

As the Mexican government strives to create a welcoming platform from where new businesses can establish their place in the global market, operations have been streamlined and processes for the procurement of permits, licensing, and government approvals are now quick and easy.


Offshoring is becoming less appealing for US manufacturers due to trade disputes and rising costs, which is why Mexico is starting to increase in popularity. It goes without saying that Mexico’s proximity to the United States is a major advantage for any business looking to set themselves up in Mexico. Supply chain management is swift and simple and transportation costs are low. Communication is also easier because the time difference is only about three hours between US offices and Mexican offices.

Mexico also follows similar Intellectual Property (IP) laws as the US and Canada that protect against fraud. Mexican law recognizes and protects patents, utility models, industrial design, trademark, slogan, trade name, and origin identification.

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