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Mexico: new FDI investments rise 43.7%

Mexico captured 13,818 million dollars of new investments within all its Foreign Direct Investment (FDI) arrivals in 2021, reported the Ministry of Economy.

With this, that specific item had a year-on-year growth of 43.7 percent.

The new investments include those in fixed assets and working capital for the habitual performance of commercial acts in Mexico; the contribution to the capital stock of Mexican companies by foreign investors; the transfer of shares by Mexican investors to direct investors, and the initial amount of the consideration in the trusts that grant rights over the FDI.

Overall, Mexico received 31,621.2 million dollars of FDI from January to December 2021, an increase of 8.7% compared to 2020.

Of this total, by type of investment, FDI related to the reinvestment of profits registered a participation of 38.6%; that of new investments, 43.7%; and that of accounts between companies, of 17.7 percent.

The reinvestment of profits corresponds to the part of the profits that is not distributed as dividends and that is considered FDI because it represents an increase in the capital resources owned by the foreign investor.

On the other hand, intercompany accounts are transactions originating from debts between Mexican companies with FDI in their capital stock and other related companies residing abroad.

New investments

Mexico competes for foreign investment with many other countries, including China and the nations of Central and Eastern Europe.

The Mexican government believes that it will be able to maintain continued access to foreign investment due to the increased competitiveness and productivity of the Mexican economy.

Mexico obtained new investments worth 13,254 million dollars in 2019 and 6,624 million in 2020, according to figures updated by the Bank of Mexico until the third quarter of 2021.

The Special Program for Productivity and Competitiveness 2020-2024 was published in the Official Gazette of the Federation on December 31, 2020.

From the perspective of the federal government, the program aims to boost productivity, development and growth, through greater financial inclusion, infrastructure development, greater labor inclusion of women and youth, boosting business competition and promoting the rule of law, among other means.

 

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