Mexico Enacts Nearshoring-Focused Tax Incentives
A new executive order offers immediate deductions for new fixed assets and additional deductions for employee training to attract investment through 2030.
As part of its 'Plan Mexico' initiative to capitalize on nearshoring trends, Mexico's government has enacted an executive order creating significant new tax incentives. The order, effective from January 22, 2025, through 2030, is designed to attract new investment and foster workforce development. For sophisticated counsel and clients, these changes are critical for evaluating the financial viability of establishing or expanding manufacturing and supply chain operations in the country. The new framework replaces previous export-focused incentives with broader benefits. Key provisions include the immediate deduction of new fixed assets acquired before September 30, 2030, and additional deductions for employee training expenses. To claim the training benefit, companies must have a collaboration agreement with the Ministry of Public Education. An Evaluation Committee will oversee the application process for these incentives, which are backed by a total authorized budget of approximately $1.5 billion. Counsel should immediately assess client eligibility and the strategic implications for planned investments.