New Tax Incentives to entice investment in key sectors in Mexico in the context of Nearshoring

On October 11th, 2023, the Ministry of Finance and Public Credit (SHCP) published in the Official Gazette of the Federation a Decree pursuant to which will grant tax incentives to companies operating in certain key sectors and industries to entice and capitalize on the opportunity of relocating companies to Mexican territory, as a consequence of nearshoring.

The benefits consist of an accelerated deduction for investments in new fixed assets that ranges from 56% to 89% during 2023 and 2024 which will depend on the specific type of activity. An additional 25% deduction is offered over a three-year period to cover worker training expenses, allowing companies to focus on the development of their human resources.

The sectors that will benefit from these incentives include, amongst others, companies involved in the production and export of food; fertilizers and agrochemicals; raw materials for the pharmaceutical industry; batteries, components and machinery for electronics; automobile engines; electrical and electronic equipment for automobiles; aircraft engines, turbines and transmissions; non-electronic equipment and devices for medical and laboratory use; and production of cinematographic or audiovisual works.

These tax benefits will be available throughout all Mexico and will be effective from October 12th, 2023, through 2025.

For any questions or comments regarding the foregoing, please contact:

Luis González
Partner
T: +52 55 50620056
lgonzalez@pcga.mx

Fernando Eraña
Partner
T: 55 50620054
ferana@pcga.mx