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Mexico offers tax breaks to companies relocating operations
By Goodrich, Riquelme y Asociados
Mexico issued a decree on October 11, 2023 to grant tax breaks for companies that relocate operations to Mexico. The decree is applicable to 10 key exporting sectors, including aerospace, automotive, electronics, and medical devices.
Companies that relocate to Mexico under the decree will be eligible for an accelerated investment deduction, ranging from 56% to 89% for the rest of 2023 and 2024. This means that companies can deduct a higher percentage of their investment costs from their taxable income in the first few years of operation.
The decree also provides other tax benefits, such as a reduction in the value-added tax (VAT) on imported machinery and equipment.
The Mexican government is hoping that the tax breaks will attract foreign investment and help to create jobs in the country. The decree is also part of a broader effort by the Mexican government to promote nearshoring, which is the process of companies moving their operations closer to their customers.
Goodrich, Riquelme y Asociados
Goodrich has a long tradition of standing alongside its clients when helping them make their business objectives a reality. By means of a cross-practice among service areas and industry teams, our carefully trained lawyers achieve an innovative approach towards the rendering of contemporary legal services tailored to the demanding business community worldwide.
We ensure that our clients are competently represented wherever their businesses take them. This is why, in addition to our network of correspondents in Mexico and our own office in Paris (since 1971), Goodrich actively participates as founder firm of the Bomchil Group, an association of independent law firms with offices in practically every Latin American country. Today, Goodrich has a professional and administrative staff of over 250. In our firm we are constantly striving to renew ourselves and in being prepared to face the ever-changing legal challenges that lie ahead. We are a firm of young lawyers with the highest professional and ethical standards.
