Mexico City, Mexico — The Government of Mexico says it will provide tax exemptions for companies who set up in a strategic area in one of the 11 listed industries. In exchange, Mexico will exempt investors of taxes for three years with a possible three year extension.
The Ministry of Economy has announced a tax exemption for up to three years for companies that invest in strategic locations in Mexico.
“With this announcement, the Ministry of Economy (SE) has begun a series of meetings and conferences with the national and international private sector to promote the arrival of investments to the Isthmus of Tehuantepec,” the agency reported in a statement.
The Secretary of Economy, Raquel Buenrostro, detailed the bidding bases for potential developments in 1,623 hectares in the states of Veracruz and Oaxaca, an area known as the Isthmus of Tehuantepec where the Interoceanic Corridor that will connect the Pacific with the Atlantic is promoted.
These first six out of 10 strategic places, also called “development poles”, will be located in industrial warehouses in the state of Veracruz in Coatzacoalcos I, Coatzacoalcos II, Texistepec and San Juan Evangelista.
Meanwhile, for the southern state of Oaxaca poles will be tendered in Salina Cruz and San Blas Atempa.
Interested parties may benefit from value added tax (VAT) and income tax (ISR) exemptions. For VAT, Buenrostro indicated that its payment may be exempted in transactions for up to four years.
While the ISR may also have a complete exemption during the first three years, with the possibility of extending for three additional years with a reduction of up to 90 percent, “depending on variables such as the number of jobs created.”
“With the development of the Interoceanic Corridor, Mexico is getting ready to receive the supply chains that will arrive in the coming years as a result of the relocation phenomenon,” said Buenrostro.
The bidding rules also indicate that these six strategic places to invest in the southeast of Mexico will be reserved for 11 productive industries.
Among these, sectors such as electrical and electronics, semiconductors are considered along with the automotive industry, medical devices, pharmaceuticals and agribusiness.
Likewise, electric power generation and distribution equipment, machinery and equipment, information and communication technologies, metals and petrochemicals are also being included.
The announcement comes amid the Mexican Government’s promotion of the Interoceanic Corridor, which also estimates the construction of more than 300 kilometers of train tracks that will connect the Pacific Ocean with the Atlantic, and the projects to connect its tracks with the Maya Train and Ciudad Hidalgo along the border with Guatemala.
Added to these are the modernization and expansion of the ports of Coatzacoalcos and Salina Cruz, the installation of fiber optics and antennas, gas pipelines, and security posts run by the National Guard.
Buenrostro stressed that among the competitive advantages of the Isthmus of Tehuantepec are natural resources, especially water and green energy sources, such as hydroelectric and wind power.
The president of the Confederation of Industrial Chambers of Mexico (Concamin), José Abugaber, stressed that the industry in the country assumes the challenge of investing so that the relocation process is faster and more successful.
In a social media post, Economía México said “Today, in the announcement that was made by the Ministry of Economy for the arrival of new investments, the 11 vocations for the Interoceanic Corridor were presented which are aligned with industrial policy and which were defined based on infrastructure, natural resources and the productive capacities of the south-southeast region.
“Thanks to this priority project of Government of Mexico, our country will become a power that will strengthen the regions of North America, Latin America and the Caribbean.
“In order to promote the development of the south-southeast of Mexico, the Ministry of Economy announced the bidding conditions for the development poles of the Interoceanic Corridor that is located between Veracruz and Oaxaca. These poles will be dedicated to eleven economic activities and will enjoy tax incentives.
“The Interoceanic Corridor is a space that will create and improve the existing infrastructure to connect the Atlantic Ocean with the Pacific, becoming a geographical space with high competitive advantages for the flow of international trade.
“With this, the Government of Mexico will promote economic development with a humanist profile, with a greater number of jobs and better pay for the well-being of the entire Mexican population.”