Regulatory Barriers and Costs Challenge Nearshoring in Querétaro

Meta Title: Regulatory Barriers Challenge Nearshoring in QuerétaroMeta Description: Querétaro faces 403 regulatory barriers that increase costs and delay business operations, hindering nearshoring opportunities.

Introduction: Querétaro’s Nearshoring Potential Under Pressure

Querétaro has emerged as one of Mexico’s most attractive destinations for nearshoring investment, thanks to its strategic location in the Bajío region, strong industrial base, and growing network of suppliers. However, a new study by México Evalúa reveals that the state faces significant regulatory hurdles that could limit its competitiveness.

The report, titled Break Down Barriers! How to Unlock Investment in Mexico, identified at least 403 regulatory obstacles in Querétaro, creating economic costs that could exceed 4.4 million pesos in lost opportunity for businesses waiting to open or operate.

The Cost of Opportunity: Measuring the Regulatory Burden

The study examined the opportunity cost (COP) caused by regulatory delays at both the state and municipal levels. COP refers to the money each business unit loses while waiting for government approvals instead of using time and resources for productive activities.

State-Level Costs

At the state level, the cost per business ranges from:

Minimum: 50,623 pesos

Maximum: 2.4 million pesos

Municipal-Level Costs

In Querétaro’s three key industrial municipalities — Querétaro, El Marqués, and San Juan del Río — the costs are even higher:

El Marqués: 83,538 to 2.07 million pesos

San Juan del Río: 110,152 to 934,805 pesos

Querétaro City: 61,262 to 560,850 pesos

When state and municipal costs are combined, the burden becomes substantial:

El Marqués: over 4.4 million pesos

San Juan del Río: over 3.3 million pesos

Querétaro City: around 2.9 million pesos

These figures highlight the financial drag caused by inefficient regulation on businesses trying to establish operations in Querétaro’s industrial hubs.

Why Regulation Matters for Nearshoring

Querétaro is part of Mexico’s Bajío region, a central hub for industries such as automotive, aerospace, electronics, and logistics. With nearshoring driving multinational firms to relocate closer to the U.S., Querétaro has a unique opportunity to capture new investment.

However, long and costly regulatory processes create barriers that weaken its competitive position. Investors often compare states and regions based not only on location and talent but also on ease of doing business.

If regulatory bottlenecks in Querétaro increase costs and delays, companies may shift projects to other states with more efficient frameworks, undermining the state’s nearshoring potential.

Tools for Measuring Barriers

The México Evalúa study used international best practices to assess regulatory burdens:

OECD Standard Cost Model: a methodology for calculating the administrative costs of regulations.

World Bank’s MCPAT Tool: used to identify areas for regulatory improvement and streamline processes.

By applying these tools to local economic data, the study quantified the real financial impact of regulatory inefficiencies, making clear that the issue is not abstract but directly tied to millions of pesos in lost productivity.

Expert Perspectives: The Urgency of Reform

According to Ana Lilia Moreno, Coordinator of the Regulation and Competition Program at México Evalúa, the findings highlight a sense of urgency:

“These numbers show there is money on the line. There is an urgent need to improve regulations. Authorities must focus on clarity and response times to give Querétaro a more business-friendly environment.”

Her analysis stresses that regulatory reform is not simply about reducing red tape — it is about unlocking real economic value and accelerating the state’s integration into global supply chains.

Querétaro’s Strategic Role in Mexico’s Nearshoring Boom

Despite these barriers, Querétaro remains a top contender for nearshoring in Mexico. Its advantages include:

Central location in the Bajío, with connectivity to major markets.

A skilled workforce trained in engineering and advanced manufacturing.

Established industrial clusters in aerospace, automotive, and IT services.

A business ecosystem that has historically attracted foreign direct investment.

The challenge now is ensuring that regulatory processes match the state’s global ambitions.

Regional Competition and Benchmarking

Querétaro is not competing in isolation. Other Mexican states — including Nuevo León, Guanajuato, Jalisco, and Coahuila — are also vying for nearshoring projects. Many of these regions have launched regulatory simplification programs to reduce costs and shorten approval times.

If Querétaro does not streamline its processes, it risks losing investment to neighboring states that can offer faster and cheaper entry into the market.

Policy Recommendations

To maximize the benefits of nearshoring and overcome regulatory bottlenecks, experts recommend:

Simplify Permitting ProcessesIntroduce digital platforms and one-stop shops to reduce waiting times for business licenses and permits.

Increase TransparencyPublish clear guidelines and timelines for all procedures to minimize uncertainty.

Strengthen CoordinationAlign state and municipal processes to avoid duplication and excessive costs for businesses.

Leverage TechnologyUse data-driven tools to monitor regulatory performance and identify areas for improvement.

Engage the Private SectorWork with local chambers of commerce and industry associations to design reforms that address real business needs.

Conclusion: Unlocking Querétaro’s Full Potential

Querétaro has all the ingredients to be a leader in nearshoring in Mexico: strategic location, industrial strength, and skilled talent. Yet the 403 regulatory barriers identified by México Evalúa, and the opportunity costs exceeding 4.4 million pesos, demonstrate that regulation is now one of the state’s biggest challenges.

If addressed, Querétaro could unlock even greater flows of foreign direct investment, strengthen its industrial clusters, and position itself as one of the most competitive hubs in North America.

The choice is clear: streamline regulations and seize the nearshoring moment — or risk falling behind in the race to capture global supply chains.