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Mexico

Basic Information

Area: 1,972,550 km²

Calling code: +52

Population: 106,682,500

Official Language: Spanish

Time zone: (UTC-8 to -6), Local time: 11:50

Overview

Mexico is located in North America, bordering the United States to the north and Guatemala and Belize to the south-east. The country has 4,353km of coastline on the Pacific Ocean, the Gulf of Mexico and the Caribbean Sea. It’s total territory covers 1.2 million km2, and it has a population of over 111 million, making it the 11th most populated country in the world. Mexico city is located in the south central area of Mexico, and it is known as the commercial, cultural, economic hub. Other large cities with a population of over 1 million include Guadalajara, Ecatepec, Nezahualcoyotl, Puebla and Monterrey.

Mexico is a member of the Organization for Economic Co-operation and Development (OECD), the North American Free Trade Agreement (NAFTA), and it has 29 world heritage sites as listed by UNESCO. The national currency is the Mexican peso (MXN).

Economy

Mexico has the 12th largest economy in the world based on its GDP purchasing power parity (PPP) figure of $1.48 trillion. The service sector accounts for 65% of the total GDP figure of $1.01 trillion, while industry generates almost a third of the GDP. Mexico city is one of the major economic hubs in Latin America, and it is home to the headquarters of some of the most prestigious and important companies in the country. The largest companies in Mexico according to Forbes are Cemex (construction), America Telecom (telecommunications), Carso Global (telecommunications), Femsa (food & Drink), Group Carso (conglomerates) and Grupo Mexico (materials).

The agricultural sector is declining, in 1970 it represented 25% of the countries GDP, now it only accounts for 4% of the GDP. Despite this it is still an important part of the economy, employing over 6.2 million people. Most agricultural land is used for the cultivation of sugarcane, wheat, beans, coffee nuts and avocados, despite this Mexico is still not food sufficient, and relies on imports to meet its foods requirements.

Partly due to the large amount of hydrocarbon reserves in the country, oil rigs and offshore drilling has been developed of the Gulf of Mexico. Along with oil products and natural gasses, Mexico exports manufactured goods, silver and foodstuffs, to the US (80.5%), Canada (3.6%) and Germany (1.4%).

Infrastructure

Mexico has one of the most extensive land and air transportation infrastructures in Latin America. There are a total of 1,744 airports, which is the third largest number of airports in any country in the world, after the United States and Brazil. The countries main international airport is Benito Juárez International Airport (MEX), which is located near Mexico city. The airport offers frequent flights to over 100 international locations, and it is Latin America’s largest airport, carrying over 24 million passengers annually.

There are a total of 17,516km of both privately owned freight railways, and passenger railway lines. It is also possible to connect to the Unites States, and a line connects to Guatemala, although it is currently inactive. Mexico city has a large metro system in operation, which runs services to 163 stations both above and below ground.

The country has 2,900km of navigable waterways and 55 merchant marine which operate from 7 major ports: Altamira, Coatzacoalcos, Manzanillo, Morro Redondo, Salina Cruz, Tampico and Veracruz.

Workforce

Mexico has a total labour-force of 47 million, over 60% of which work in the service sector, 23.4% in industry and 13.7% in agriculture. The country is ethnically diverse, being home to 62 officially recognized indigenous groups such as the Maya, Nahua people, Zapotec’s and Mixtec’s, it is estimated that these indigenous people account for 10% - 14% of Mexico’s total population. A further 7% of the population are recorded as ‘white’, originating from countries such as Italy, the UK, America, Poland, Romania and Greece. Asian populations inhabit the Baja California region, where Lebanese, Syrian and Chinese nationals can be found. The sole official language is Spanish, which is spoken by the majority of the workforce, making Mexico the world’s largest speaking Spanish community, while 6% of the population speak an indigenous language.

The Secretariat of Public Education regulates the entire education infrastructure and provides compulsory free education to all citizens between the ages of 5 and 15. The are several higher education options available in Mexico, including public and private universities, technical institutes and technological universities. Mexico has a total national literacy rate of 91%.

Business Costs

The Cushman & Wakefield 2010 Report shows that the rental costs in Mexico City CBD increased by 1% in the year 2009 and now cost an average of $30.41 per square foot per annum. Rates are lower in the Monterrey CBD, where it costs an average of $23.41 per square foot per annum.

A 2010 study by the research firm KPMG, ranked Mexico as the best country in the world to do business in out of a total of 95 worldwide countries, based on the least amount of tax burden. In 2008 Mexico introduced a new flat tax rate that runs alongside the standard rate, which is a low 17.5% of gross annual profits. Any individual who spends over 183 days a year in the country is required to pay taxes on all income, which range from 3%- 28% depending on the amount earned in the yearly tax period. The standard VAT rate was recently increased to 16% on most goods and services and all books, foodstuffs and medications are exempt from VAT.

The minimum wage rate in Mexico was increased by an average of 4.85% in 2010, and minimum wages are set depending on the area the individual works in. These geographical areas are labelled A,B and C. Geographical area A has minimum rate of MX$57.46 per day, area B is MX$55.84 a day, and area C has minimum rates of MX$54.47 a day. These minimum rates currently convert to between £2.99 and £3.16 a day.
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