The Interpreneur survey: Understanding mid-market business trends in Mexico

Mexico is tabled as a likely benefactor of the US moving away from manufacturing in Asia. US firms are now preferring to set up operations closer to home in Mexico, capitalising on lower labour costs, geographical proximity, and free trade agreements.

To understand how this landscape is affecting mid-market businesses, we recently surveyed 1,400 C-suite business leaders in 14 countries, in private sector companies earning up to £300m a year that have expanded internationally. We call these CEOs ‘interpreneurs’.

We have analysed the Mexican data to better understand what motivates Mexican business owners to expand abroad.

Global business trends: Do Mexican business leaders believe more business will expand overseas in the next 12 months?

Mexican CEOs believe overseas business expansion is widely expected to increase

86% of Mexican respondents expect to see an increase in overseas expansion within the following year.

This report provides useful and important insights on the implications business leaders need to consider when looking to expand abroad. Interestingly, in the case of Mexican companies, there appears to be a real desire and need for flexibility to maximize access to markets beyond their host country.

There also appears to be a solid understanding of global tax regulations around the world. While this is encouraging, companies should always be aware of the different regional regulatory landscapes wherever they operate, in addition to the significant global regulatory changes that will come into effect in the short term.

Ricardo Gameroff
Managing Partner at Kreston BA Argentina
Business Director, Kreston Global Audit Group

Which markets do Mexican businesses prefer to expand into?

North America top choice for Mexican interpreneurs when expanding businesses globally

With 69% of Mexican respondents naming North America as their number one location for business expansion, the country becomes one of the most enthusiastic about expansion to the region amongst other global respondents, with only China voting higher (70%). Globally, almost half the respondents agreed the US was in their sights for expansion.

South America is on the radar with a score of 40%. However, Mexican companies aren’t afraid of truly going global, and strong trading relations with the EU are reflected in the fact that 31% are considering expanding into Western Europe.

What makes a country more attractive to Mexican businesses looking to expand globally?

Economic growth prospects primary attractor for Mexican CEOs

Mexican respondents valued favourable trade agreements (e.g. free trade zones, diplomatic partnerships, or preferential tariff treatment) the most, a view shared with China (60%).

Mexico views skills and talent (e.g., availability of local talent and openness to skilled talent immigration) as the least important considerations, which is attractive compared to the global results, where it ranked in the top three.

What motivates Mexican interpreneurs to expand internationally?

Mexican respondents selected increased sales and revenue as the most (72%) beneficial aspect of expanding internationally for their business.

What are the biggest international expansion challenges in 2024 according to Mexican interpreneurs?

Adapting logistics a challenge to doing business internationally, say Mexican CEOs

Mexican respondents said that one of the biggest challenges faced by businesses during international expansion was adapting logistics and supply chain issues (e.g. managing international shipping, distribution, and communication). This was the highest response to this answer out of all 14 countries.

Risk: What do Mexican CEOs think are the biggest risks to global business expansion in 2024?

How much of a risk do the following pose to your business’s international expansion or planned international expansion?

Recession still a concern for Mexican businesses

38% of respondents felt economic slowdown or recession poses a disruptive or significant risk to their business’s international expansion or planned expansion. This was in line with the global view.

35% felt that financial market and foreign exchange volatility posed a disruptive or significant risk, and another 35% felt this risk from cybersecurity threats and data breaches.

Private Equity vs Venture Capital: Which is the preferred international expansion funding source for Mexican businesses?

Venture capital preferred route to raise capital for global expansion say Mexican business leaders

46% of respondents said that their business is likely to consider or has used venture capital or private equity to grow internationally. 37% reported using/considering using private investors for international expansion.

Understanding global tax: Is the C-suite ready for a global tax threshold?

Mexican businesses confident in their global taxation knowledge

98% of Mexican respondents feel confident in understanding global tax rules, 47% shared they are extremely confident in having a deep understanding of global tax rules and their implications for multinational businesses. This is one of the highest scores globally.

The growing importance of ESG for Mexican investors and interpreneurs

Mexico in the middle of the field when placing ESG as a priority

The majority (90%) do/would consider ESG practices when considering international expansion, with around a third of Mexican respondents (36%) said they would consider ESG a top priority. Only 10% wouldn’t consider ESG practices, which was higher than the global respondent average.

The benefits of AI in international business operations

Mexico business confident about the use of AI in global operations

96% of respondents said they felt prepared to harness AI’s benefits in global business operations within the next two years. No respondents felt unprepared, a view shared by the US, Brazil, China, and Nigeria.