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The Best States in Mexico to do Business

The Best States in Mexico to do Business

Posted by Ricardo Vázquez on August 06, 2015

Mexico has diverse geographic and productive zones when it comes to making business, some of which are very similar and others are radically different. That’s the reason why we give you two classifications that will help you identify where to find opportunities for national and foreign companies.

The prevailing criterion in Mexico, in terms of state grouping, refers to the geographic nature. The Federal Government, financial institutions and international organizations classify the entities according to their geographical location to the north, south, east or west. However, that brings about a description and profiling of each productive region of the country, which is worth being identified to make business.

Mexico’s economy has been clearly divided into three large geographic regions decades: North, South and Center, but it goes up to five with the sub-regions and certain activities prevail in each of them.

But five development levels are defined when it comes to assessing the productive vocation of each of the country’s 32 federative entities, including the Federal District, according to the education level, population density, income per inhabitant, sectorial GDP, foreign investment in each state and contribution to the national GDP, among other elements.

Three big consumption centers are to be taken into account. Mexico City’s Metropolitan Zone is the largest one and it’s made up of the Federal District and a number of municipalities, with over 20 million consumers. The other two zones are the cities of Guadalajara and Monterrey, with their respective metropolitan areas.

Academic studies and analysis of the private sector show Mexico with unequal regional development, contrasted and even polarized. This fact is related to the geographic position of federative entities.

According to the 2001-2006 National Development Plan and analysts of the private sector, the Mexican Republic is divided into five big geographic regions:

Central – Linked to the Federal District and bordering states, a zone that groups services, although there are neighboring zones that feature high manufacturing development. Along with the Federal District, it includes the State of Mexico, Hidalgo, Queretaro, Puebla, Tlaxcala and Morelos.

Central-Western – Aguascalientes, Colima, Guanajuato, Jalisco, Michoacán, Nayarit, San Luis Potosi and Zacatecas.

Northeastern – This zone is characterized by the manufacturing development and it’s the country’s main zone as it’s near the United States. Nuevo Leon, Coahuila, Tamaulipas and Durango.

Northwestern – Baja California, Baja California Sur, Chihuahua, Sinaloa and Sonora. In fact, these three regions feature manufacturing production at higher or lower levels.

South-Southeastern – States that mainly produce raw material and the region gathers the poorest states of the country: Guerrero, Oaxaca and Chiapas, as well as Campeche, Veracruz, Tabasco, Yucatan and Quintana Roo.

In some cases it seems to be reasonable to think that the geographic location defines the productive vocation of entities and helps identify common needs in terms of the transportation infrastructure, and that’s the case of the bordering area with the United States. Nevertheless, the limitations of this method are obvious, since the development level among entities in the same region is significantly different.

In this respect, the Service of Economic Studies of BBVA Bancomer, carried out a comprehensive study, including the variables pointed out at the beginning, which labeled five groups of entities according to their economic vocation and development conditions: high marginalization, developing, tourism-aimed, industrialized and high development.

High Development – Federal District. It’s the financial and service-providing center of the country, gather the three power level of the federal government and it’s the main consumption center in the country in terms of the population density and buying power.

Industrialized – Nuevo Leon, Coahuila, Chihuahua, Baja California, Aguascalientes, Sonora, Tamaulipas, Queretaro, Jalisco and State of Mexico. States with prevailing manufacture production, national and international investment and job generation.

Average Development – Campeche, Colima, Durango, Morelos, Yucatan, Sinaloa, San Luis Potosi, Guanajuato, Puebla, Tabasco, Veracruz, Nayarit, Michoacán, Hidalgo, Zacatecas and Tlaxcala. Combination of manufacturing, farming and oil states.

Tourism-aimed – Quintana Roo and Baja California Sur. Utmost center of international tourism attraction, the first one includes Cancun and Riviera Maya as destinations, and the second one has Los Cabos. They are characterized by the growing population and high job generation.

High Marginalization – Guerrero, Chiapas and Oaxaca. Farming states, although Guerrero and Oaxaca feature important tourism destinations, including Acapulco, Huatulco and Puerto Escondido. States with the lowest income per capita.

This classification helps entrepreneurs identify regions to make business according to their interests.

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