• GLOBAL MOBILITY
MEXICO
About us... eyg.com.mx Escobar y Gorostieta, S.C Abogados is a highly specialised legal firm in labour law, offering our clients:
Uniquely strategic Mexico
the Caribbean who are fleeing the devastating impacts of climate-induced disasters in their home countries. This trend is likely to intensify as climate- related disasters become more frequent and severe, placing additional burdens on Mexico’s already strained resources and infrastructure. Given this scenario, it is imperative for Mexico to undertake a strategic shift in its policy framework to effectively integrate considerations of climate resilience with migration management. This approach is essential to ensure sustainable development and to safeguard human security in the face of the escalating challenges posed by climate change and migration. Government Policy and Employment Mobility in Mexico The Mexican government’s decree, published on June 5, 2023, aimed at promoting investment in the Isthmus of Tehuantepec, is having a pronounced effect on employment mobility within the nation. By offering substantial tax incentives to key sectors such as electronics, automotive, clean energies, and medical devices, the government intends to attract new investments and stimulate the development of manufacturing plants within the region. This strategic initiative is expected to drive significant economic growth, create numerous job opportunities, and enhance the competitiveness and efficiency of operations for taxpayers. The targeted focus on these high- potential sectors, coupled with the extensive tax benefits delineated in the decree, including a 100% income tax credit and immediate deductions for investments in new fixed assets, is set to transform the Isthmus of Tehuantepec into a vibrant hub for manufacturing and industrial activities. This aligns with the broader objectives outlined in the National Development Plan and is pivotal in directing employment mobility towards these designated development poles, thereby fostering regional economic development. The operationalisation of the Interoceanic Train, a significant infrastructure project by the Mexican government, enhances the attractiveness of these investments by providing improved logistics and
Our expertise includes: • Attention to and monitoring of lawsuits • Counselling on labour relations management • Consultation for the implementation of hiring schemes • Risk analysis • Training for legal or human resources departments • Corporate restructuring due to mergers or acquisitions
• Preventive counselling • Corrective counselling • Litigation
This is based on over 30 years of experience, primarily serving the business sector, governmental entities, or officials. Our team of lawyers operates under the premise of resolving conflicts by adhering to the best practices and recommendations for our clients.
Edmundo Escobar Partner Escobar y Gorostieta, S.C Abogados
connectivity across the Isthmus, further bolstering Mexico’s position as a strategic nearshoring hub. This development, along with a comprehensive assessment of local infrastructure, energy supply, and labour training capabilities, is essential for ensuring investments are well-positioned to leverage Mexico’s nearshoring potential and achieve long-term sustainability. Additionally, the subsequent act released on October 11, 2023, which extends tax incentives to key exporting industries, further emphasises the government’s commitment to leveraging nearshoring as a strategic means to foster economic growth. These policy measures, while instrumental in enhancing Mexico’s position in the global marketplace, must be judiciously evaluated against potential challenges such as implications for tax revenue
exporting industries, have established an inviting landscape for foreign investment. It’s crucial for investors to align their investment strategies with government-prioritised sectors like electronics, automotive, clean energies, and medical devices, which are bolstered by strong investment support and attractive tax incentives. To fully leverage these incentives, investors must navigate the regulatory landscape with precision and align their investments with the designated development areas and sectors outlined in these new policies. Additionally, it’s vital to address broader infrastructural and logistical challenges that could influence operations, including local infrastructure adequacy, energy supply, and skilled labour availability. Confronting these challenges is essential for the long-term sustainability and success of investments in Mexico. Furthermore, in the context of the competitive strengths of the Mexican economy and potential hurdles, investors should adopt a holistic and informed approach to their investment decisions. This approach should encompass understanding the benefits provided by the United States-Mexico-Canada Agreement (USMCA), especially regarding labour issues, which enhance labour rights protections and could influence supply chain dynamics and labour cost considerations in Mexico. Incorporating insights into nearshoring trends, supply chain resilience, and the broader economic and political climate in Mexico will empower investors to integrate into the local economy, foster sustainable development, and secure enduring success in their ventures more effectively.
T he complexity of global Mexico, especially in light of the intricate migration issues with the United States. Various factors such as changing economic policies, escalating trade tensions, and broader geopolitical shifts geopolitical events significantly influences mobility patterns in critically impact not only trade and economic activities within Mexico but also deeply influence human migration patterns. Mexico’s unique and strategic position as a crucial transit and destination country for migrants from Latin American countries, who are aiming to reach the U.S., places Mexico in a challenging and complex scenario. This situation necessitates a careful navigation between maintaining diplomatic relations, addressing humanitarian concerns, and managing pressures from the U.S. to implement stricter controls on illegal migration. These dynamics are further complicated by economic instability in regions affected by global trade tensions, which can drive individuals to migrate in search of better opportunities, with Mexico serving as both a destination and a transit country. Moreover, the increasing trend of nearshoring, which is driven by these geopolitical shifts, presents Mexico with significant economic opportunities. However, it also poses challenges in managing the dynamics of migration as it potentially makes Mexico an attractive destination for migrants from various regions seeking employment opportunities. Consequently, Mexico is tasked with the delicate balance
of capitalising on economic growth opportunities through nearshoring, while simultaneously addressing the complex and multifaceted challenges associated with migration in a manner that is both humane and effective. Climate Concerns Impacting Mexico The pressing issue of climate change is increasingly becoming a significant factor in global migration decisions, and its impact on Mexico is particularly notable. Mexico is confronted with its own unique set of environmental challenges, such as severe water shortages, especially in its northern states, which are crucial industrial and agricultural centres.
These environmental issues are aggravating living conditions and could potentially lead to the displacement of communities, thereby triggering internal migration within Mexico. Moreover, the exacerbation of extreme weather events due to climate change, such as intensified hurricanes and prolonged droughts, threatens to disrupt agricultural productivity, further straining Mexico’s rural economies. This may result in increased migration towards urban areas or even across international borders in search of better livelihood opportunities. On a global scale, Mexico is increasingly becoming a refuge for individuals from Latin America and
Edmundo Escobar has over 35 years of experience in labour and employment including human capital management, including selection, recruitment, and personnel administration, this professional holds a Law degree from the National Autonomous University of Mexico, with specialised studies in Civil Law, Administrative Law, and Taxation from the Panamerican University. He also pursued Public Accounting at the Autonomous Technological Institute of Mexico and completed a Diploma in Management for Lawyers at Yale University, USA. Currently managing senior partner at Escobar y Gorostieta, S., active member in the Mexican Bar Association (BMA), the International Bar Association (IBA), has represent the World Employment Confederation (WEC) at the International Labour Organization (ILO). Additionally, was Vice President of the Latin American Employment Confederation (CLEM) and was professor at the National Autonomous University of Mexico (UNAM) Law School for over a decade.
and the need for comprehensive infrastructural development. This
underscores the necessity for a targeted approach to reinforce Mexico’s export capabilities and to ensure a sustainable economic trajectory in the face of global manufacturing shifts and the imperative for resilient supply chains. General Advice for Foreign Investors in Mexico For foreign investors aiming to relocate or expand their operations in Mexico, the current policy framework offers significant opportunities, particularly in manufacturing sectors earmarked for national economic growth and nearshoring initiatives. Recent legislative reforms, such as the decrees to foster investment in the Isthmus of Tehuantepec and within key
+55 4196 400 0 e.escobar@eyg.com.mx irglobal.com/advisor/edmundo-escobar
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