A Strategic Move Amid Global Uncertainty

On January 21, 2025, Mexico’s President Claudia Sheinbaum announced a new package of fiscal incentives aimed at attracting foreign investment. At a time when global trade faces heightened uncertainty due to U.S. protectionist measures and tariff threats, the initiative seeks to reinforce Mexico’s role as a competitive and resilient investment destination.

According to analysts at Fundar, Center for Analysis and Research, these fiscal incentives are more than tax breaks — they represent a strategy to redirect Mexico’s economic trajectory toward industrialization, training, and technological development.

Why Fiscal Incentives Matter

Foreign direct investment in Mexico has been a key driver of economic growth, particularly through the nearshoring trend and the integration of supply chains under the USMCA (T-MEC). However, attracting new projects requires more than geographical advantage.

Objectives of the Incentive Package:

• Strengthen workforce training.
• Encourage technological innovation.
• Stimulate investment in new fixed assets.
• Support companies joining local and regional supply chains.

For Mexico, this means not only attracting capital but also ensuring that investment leads to long-term productivity and competitiveness.

The Structure of the Incentives

The fiscal incentives program consists of two main types of benefits:

1. Accelerated Deductions for New Investments

Companies can apply immediate deductions on investments in new fixed assets acquired between January 2025 and September 2030.

The government allocated 28.5 billion pesos to this stimulus.

Depreciation rates vary depending on the type of asset and the industry where it is used.

2. Additional Deductions for Training and Innovation

Firms that invest in training employees will be able to apply an additional deduction equivalent to 25% of the increase in training expenses in their annual tax filings from 2025 to 2030.

A total of 1.5 billion pesos has been allocated to this component.

The aim is to build a more skilled workforce aligned with Mexico’s industrial transformation.

Together, the package is worth 30 billion pesos, representing a significant fiscal commitment to foster both FDI and domestic reinvestment.

Who Qualifies for the Incentives?

The decree specifies that the incentives apply to:

Legal entities that pay taxes under the Simplified Trust Regime (Régimen Simplificado de Confianza de Personas Morales).

Individuals with business and professional activities under Mexico’s Income Tax Law, provided they meet certain requirements.

Key Requirements for Eligibility:

Be registered with the Federal Taxpayer Registry and maintain an active tax mailbox.

Have a positive compliance opinion on tax obligations.

Present an investment project and a collaboration agreement with the Ministry of Education for dual education programs.

Obtain a compliance certificate from the Evaluation Committee overseeing the incentives.

Oversight and Evaluation

The program will be supervised by an Evaluation Committee composed of representatives from:

The Ministry of Finance (SHCP).

The Ministry of Economy.

The Regional Economic Development and Relocation Advisory Council.

This mechanism ensures that companies not only meet technical and financial criteria but also integrate into local supply chains, contributing to regional development.

Link to Supply Chains and Industrial Policy

The Plan México, which frames these fiscal incentives, is designed to accelerate industrialization and deepen Mexico’s participation in global supply chains.

The incentives align with the goals of the IMMEX program, which promotes exports through maquiladora and manufacturing operations. According to the Mexican Institute of Public Accountants (IMCP), the integration of new technologies such as automation and artificial intelligence into IMMEX processes will further enhance Mexico’s competitiveness.

By combining fiscal incentives with digital modernization, Mexico aims to position itself as a leading hub for advanced manufacturing and supply chain resilience.

Expert Perspectives: Opportunities and Risks

Opportunities

EY (Ernst & Young) emphasized that these incentives represent genuine benefits, particularly the additional deductions for training employees.

The AEM-USA (Mexican Entrepreneurs Association in the U.S.) highlighted that companies should seize these advantages, as they lower operational costs and promote human capital development.

Risks

Analysts also warn about risks, particularly in terms of transparency and implementation:

It is crucial that beneficiaries be publicly disclosed.

Oversight must ensure that incentives are not concentrated among a small group of companies.

Environmental and social responsibilities must not be overlooked in the pursuit of industrial expansion.

Advantages of the Incentives

Competitiveness: Lower tax burdens make Mexico more attractive compared to other nearshoring destinations.

Workforce Development: Incentives tied to training ensure long-term skill growth.

Supply Chain Integration: Companies must link into regional value chains, strengthening domestic industries.

Innovation: The additional deductions for R&D and training align with Mexico’s goal to move beyond low-cost manufacturing.

Potential Risks and Challenges

Dependence on U.S. Trade Policy: Tariffs or trade disputes could undermine the benefits.

Implementation Complexity: Administrative hurdles may discourage smaller companies from participating.

Transparency Issues: Failure to disclose beneficiaries could erode trust in the program.

Environmental Impact: Industrial expansion must be balanced with sustainability commitments.

Conclusion: A New Era for Investment in Mexico

Mexico’s fiscal incentive package represents a bold step toward strengthening its role in global supply chains and attracting foreign direct investment. By combining accelerated deductions for new assets with additional deductions for training and innovation, the plan addresses both immediate competitiveness and long-term industrial development.

The success of the program will depend on transparency, regulatory clarity, and the government’s ability to balance economic growth with environmental and social responsibility.

If executed effectively, these incentives could mark the beginning of a new era for foreign investment in Mexico, positioning the country as a leader in supply chain resilience, innovation, and sustainable industrial growth.