Mexico is offering large tax breaks to a swath of industries in a government decree published Wednesday, aiming to capitalize on a nearshoring trend that has seen companies pile into the country.
(Bloomberg) — Mexico is offering large tax breaks to a swath of industries in a government decree published Wednesday, aiming to capitalize on a nearshoring trend that has seen companies pile into the country.
The incentives cover 10 sectors, including semiconductors, electronic components, batteries, motors, fertilizers and pharmaceuticals, Deputy Finance Minister Gabriel Yorio wrote on social media.
“This decree establishes tax incentives for companies looking to relocate to any part of Mexico,” he wrote. It seeks “to boost investments from the nearshoring phenomenon.”
The move applies to investment in fixed assets and will be available until the end of 2024, with benefits ranging from 56% tax relief to 89% on those investments.
The nearshoring trend, which has seen companies move closer to the US in an effort to simplify supply chains, has boosted foreign direct investment in Mexico more than 40% in 2023 and attracted the likes of Tesla to announce a $5 billion factory.
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