On January 13th, 2025, President Sheinbaum presented the Mexico Plan (MP), which details tax incentives, provides for greater efficiency in administrative processes, and outlines investment goals for infrastructure related to energy, urban mobility, and housing, among others.
Nearshoring
Under the MP, the Mexican government intends to incentivize new investments that promote organizational training as well as innovation by encouraging relocation of companies and restructuring of supply chains related to manufacturing.
The MP enables accelerated depreciation of new investments in fixed assets (41% – 91%) as well as additional deductibility of expenses related to training and innovation (25% of the increase in expenses over the average of the last three fiscal years).
These new tax incentives will be subject to assessment by an Evaluation Committee that will certify compliance of investment milestones. The referred Committee will annually set the cap of incentives that compliant taxpayers may benefit from. The referred benefits will be available beginning January 22, 2025, and will apply to fixed assets acquired up to September 30, 2030, and to training and innovation expenses incurred up to and including tax year 2030.
Investment Zones
The MP promotes 12 new geographical investment areas (Tamaulipas, Puebla, AIFA-Tula, Bajío, Piedras Negras, Nuevo Laredo, Hermosillo, Puerto Lázaro Cárdenas, among others), in addition to those implemented by former President Lopez Obrador, by providing tax incentives to investors operating in Strategic Sectors (semiconductors, electronics, energy, logistics, tourism, agroindustry, infrastructure, IT, electromobility and automotive, medical devices, and pharmaceuticals), who relocate or open operations in these areas. Tax incentives available to qualifying companies include:
- 100% tax credit on income tax generated during the first three years.
- A tax credit of 50% to 90% of the income tax generated during the following three fiscal years, which will be granted if the employment levels, to be determined in accordance with guidelines to be issued by the Ministry of Finance, are met.
- Immediate 100% deduction of investments made during the first six years in new fixed assets used for production, excluding furniture, office equipment, automobiles, armored vehicles, and unidentifiable fixed assets.
- 100% tax credit of the VAT resulting from the sale of assets, rendering of services, or lease of assets between companies located within the investment areas.
These tax incentives are not applicable to taxpayers under the maquila regime; the optional regime for controlled groups; Real Estate Investment Trusts; or companies participating in cinematographic or theater production or distribution, music, dance, visual arts, or research and development of technology related to high performance sports.
Government Banks
To further incentivize companies operating in the outlined Strategic Sectors, the MP provides for Government banks to provide: (A) preferential loans (with competitive interest rates) to companies within the Strategic Sectors. The specific fund for these loans will be announced on February 7, 2025; (B) preferential long-term loan rates for small- and medium-sized companies to increase their working capital, technology, and exportation capabilities, enabling reverse factoring (supply chain finance) at an annual rate of 3.5%; (C) dedicated loans to incentivize acquisition of new technologies and machinery; (D) subsidies and loans to include Mexican incorporated companies (no limit on whether they are foreign owned) into international supply chains (e.g., automobile, aerospace, and electronics); and (E) preferential loan rates for long-term infrastructure projects (e.g., highways, airports, and telecommunications networks) in underserved areas.
IMMEX 4.0
The MP provides for the implementation of the IMMEX 4.0 Program to consolidate, within the Ministry of Economy, application processes to obtain authorization to operate under an IMMEX program (deferral of import duties on temporary imports) and VAT Certificate (100% credit of VAT on temporary imports). The referred consolidation is intended to significantly reduce application times (currently fluctuating for up to two years) and ease compliance with requirements.
Public Investment
Additionally, the MP creates a public investment project that prioritizes five specific sectors: Energy, PEMEX (State-Owned Petroleum Company), Water, Transportation and Mobility, and Public Housing.
- Energy: US$23.4 billion will be allocated for electricity generation, transmission, and distribution; US$12.3 billion for new power plants; US$7.5 billion to strengthen the transmission network; and US$3.6 billion for the distribution network.
- PEMEX:MX$2.07 trillion with an annual average of MX$345.5 billion will be allocated to strengthen exploration, production, and oil & gas.
- Water: MX$20 billion will be invested in water projects in 2025, which will focus on cleaning up key rivers and modernizing irrigation systems covering 200,000 hectares of land. The primary watershed area includes the Lerma-Santiago, Atoyac, and Tula rivers. This section also includes the implementation of 16 infrastructure projects under the Mexican National Agreement for the Human Right to Water and Sustainability (as published on December 12th, 2024) that will include more than MX$16.4 billion of private investment.
- Transportation and Mobility: To improve urban mobility and infrastructure, an investment in more than 3,000 km of railroads for passenger and cargo transportation is planned.
- Public Housing: The plan contemplates the construction of one million homes (CONAVI and INFONAVIT) for which MX$513 billion will be allocated.
Additionally, the development of a National Technical Certification Program for 150,000 professionals and technicians per year is also being proposed as part of public investment in strategic sectors.
This entire investment plan, along with the adjustments in government budgets, represents a unique opportunity for foreign suppliers that engage in these strategic areas, to be considered by the Mexican Government for public procurement. Therefore, in addition to the benefits that this investment model offers suppliers eligible for public/state-banking funding and other incentives, this investment scheme results into an attractive option for both parties.
Digitalization and Efficiency in Administrative Processes
The MP proposes a complete digitalization and on-line channel for administrative applications to promote efficiency in obtaining authorizations for participation in commercial programs and investment projects. A launch date for this has not been announced yet. Our Firm has the team and capabilities to assist our clients in the design and implementation of strategies that allow them to benefit from the development of the proposed measures under the Mexico Plan.
