Setting up a business in Mexico

Starting a business in Mexico

Mexico is a country which is growing in popularity amongst the expat community and one which will appears to offer significant opportunities for those willing to take a chance. However, it would appear from this particular thread that setting up a business and finding employment in Mexico can be very difficult, frustrating and ultimately disappointing. While it would be wrong to suggest that this thread reflects every employment market in Mexico it does give an interesting insight into many of the things that we all take for granted.

Background to the thread

The gentleman who started the thread is looking to open a general convenience store which is half papeleria and half abarottes. He’s looking at areas such as Yautepec, Cuernavaca and Cuaulta but experiencing great difficulties on a number of levels. Firstly he appears to be having problems finding rental space to house the venture and more surprisingly there appear to be problems with street addresses and building addresses in Mexico!

Starting a business

While the general impression many people have of Mexico is one which is open to entrepreneurs and a developing and potentially lucrative economy but this is not always the case. The areas in which the forum member is looking to open his business do not appear to be particularly welcoming for overseas investors and overseas business people. There is a suggestion that the rental figures which are being quoted include a premium for the very fact he is an expat. Whether this is the case or not is debatable but there is no doubt the forum member is having great difficulty getting his business off the ground.

Addresses in Mexico

While you assume that the likes of Mexico City and some of the larger cities in Mexico are very different, the three areas mentioned in the thread appear very lax with regards to street and building addresses. The suggestion that many people locate buildings by association with other well-known buildings in the area is strange to say the least and certainly not a firm basis on which to build a business in the region!

The suggestion that any landlord would not be against you adding a number to your building door or indeed approaching the local authorities about adding street signs is very much alien to those from countries such as the UK. There’s even a suggestion that you may have to consider creating a street sign yourself within the various authority guidelines. Bizarre to say the least!

Teaching English in Mexico

The forum member who began the thread also appears to be fluent in English and is looking at potential opportunities to take this as a short-term employment option, to bring some money in. There is a suggestion on thread that the rates available for English translators and English second language teachers are not great although it would appear there may be numerous opportunities to ply your trade in this particular field.

The more English-speaking visitors that travel to Mexico the greater chance of English teachers and language translators finding employment outside of the major cities of Mexico. However, as with any country there appears to be a high concentration of skilled employment in and around the major areas such as Mexico City.

Work Visas

As with many South American economies, historically there has been a significant influence on the Mexican economy from the US. However, over the last few years we have seen a reduction in the U.S. influence in places such as Mexico and while the employment market is open to foreign workers it can prove difficult to obtain the relevant visas required.

The situation is slightly different for those from America with a reciprocal agreement which apparently allows Mexican workers to work in the US and vice versa. This could prove vital to anybody looking to set up a business in Mexico or find employment with existing companies, as the requirement to obtain the relevant paperwork would in effect disappear.

Business etiquette in Mexico

As with any country in the world there are different ways of running businesses, different business types and different business practices, with Mexico no different. Many people moving to Mexico automatically assume that the business environment and business regulations are developed to levels they have experienced in the past. Unfortunately many business people have found this is not the case in Mexico and there is significant redtape and paperwork required before you can begin trading.

There are numerous suggestions in the thread that you should investigate and experience first-hand the business etiquette in Mexico, focusing upon the regions you are looking at, before you begin trading. Business etiquette will vary across the country as cities such as Mexico City have more Western influences than some of the more rural areas which have remained relatively untouched by Western visitors.

Taxation

Taxation is an issue which many people in Mexico tend to bury in the sand and ignore unless they’re asked questions. In reply to one comment regarding working from home via the Internet, a contributor has suggested that if you are paid by a US company then you pay your taxes in the US but if you are paid by a Mexican company then you simply ask no questions. Whether the authorities would see it this way is something which people will have very different opinions on.

Doing your homework

While there is no doubt the Mexico as a country has developed enormously over the last few years, the level of development varies from area to area. You need to do your homework about the areas you are looking at, business etiquette, local cultures and finance. Obviously, you also need to ensure that the business line which you are going into has sufficient demand to make it worth your while.

Conclusion

There are many anomalies with regards to Mexico compared to other popular countries but the most alarming one is the issue of addresses and street names. How are foreign visitors expected to locate different areas and different buildings in some of the more rural cities and towns if there are no signposts and no door-to-door addresses?

While there is no doubt there are opportunities in Mexico there is also no doubt that the business etiquette and business culture is very different from that which many people have experienced in the West. There is some very good advice regarding levels of finance and how much you should put aside just in case your business opportunity does not take off – ignore at your peril!

All in all it appears that Mexico may initially be very hard work for anybody looking to move their and set-up their own business or find employment themselves.

Tagged as: business, Mexico