The landscape of international business is changing. Nearshoring, the practice of moving operations closer to a company's customer base has become more popular as a result of disruptions in traditional supply chains and strained relations between major economies. Mexico has become a leading option for US companies looking for dependable and affordable substitutes for Asia. This are the reasons why:
Mexico's Advantages for Nearshoring
1. Reduced Costs
- Lower Labor Costs: Manufacturing wages in Mexico are significantly lower than in the US, offering substantial cost savings.
- Shorter Supply Chains: Mexico's proximity to the US reduces transportation costs and speeds up product delivery, minimizing inventory needs.
2. Simplified Trade
- USMCA Trade Agreement simplifies trade between the US, Canada and Mexico, eliminating customs hurdles and facilitating the flow of goods.
3. Skilled Workforce
- Large Talent Pool: Mexico boasts a large pool of qualified workers, particularly in manufacturing and technology. Universities graduate a steady stream of engineers and other professionals.
4. Strong Protections
- Intellectual Property Safeguards: The USMCA agreement guarantees robust intellectual property protections for companies operating in Mexico.
5. Developed Infrastructure
- Investment in Infrastructure: The Mexican government has invested heavily in infrastructure, providing access to modern industrial zones, reliable transportation networks and essential utilities.
The Future of Nearshoring in Mexico
Industry experts predict continued growth in nearshoring to Mexico. This growth will be driven by:
- Increased Demand: As companies seek cost savings and skilled workers, the demand for nearshoring services in Mexico is expected to surge.
- Tech Specialization: Mexico is anticipated to become a hub for specialized software development, offering companies a competitive edge.
- Improved Practices: Mexico is likely to refine its nearshoring practices, providing more transparent and cost-effective solutions for foreign businesses.
How to Get Started with Nearshoring in Mexico?
Ongresso can help your business navigate the process of nearshoring to Mexico. Our comprehensive services include:
- Market Entry and Back-Office Support
- Hiring and PEO Services
- Accounting and Tax Assistance
- Company Formation including Banking Set-up
- Corporate Legal Services
Contact Ongresso today to learn more about how we can help you leverage the advantages of nearshoring in Mexico and achieve your business goals!