Weekly Currency Update: Mexican Peso

Today the Mexican Peso is trading at $12.62 MXN = $1 USD.

According to Bloomberg, the Mexican Peso saw its fourth consecutive week of gains, which is the longest streak since March. 

The opposition party (PRI) is proposing a bill that would cut the value added tax (IVA in Spanish) which is currently at 16%.  President Calderon had approved the increase from 15% to 16% at the beginning of this year, but the PRI is pushing hard for a reversal of this increase.  Many experts suggest that such a move would mean confusion and suggest a weaker Mexican economy. 

Mexican Business Etiquette: Weddings

If you are doing business in Mexico, it is highly likely that sooner or later you will be invited to a wedding - either a business partner, an employee, or someone who you've done business with. 

• Most friends of the family in Mexico City do NOT attend the ceremony, but only attend the reception.  If you are very close to the bride/groom, and they mention seeing you at the ceremony, go.
• If the invitation says the reception starts at 9, it is ok to show up at 9:30.  If you show up at 9, you might be the only one there besides the waiters.
• Most weddings are host bar - this mean the family of the bride or groom pays for the alcohol.
• Dancing is not an option* (*this is my personal opinion, nothing to do with Mexico, ha ha).
• If you have trouble finding a gift off of the couple's registry, money is always accepted and appreciated (in an envelope).
• Mexican weddings tend to be much bigger in size, it is not uncommon to have over 300 people at a wedding.

Dress code:

FORMAL WEDDING AT NIGHT
Men - Tuxedo
Women - Long (floor length) dress/ball gown

FORMAL WEDDING DURING THE DAY
Men - Suit and tie
Women - Cocktail dress

BEACH WEDDING
Men - Guayabera and khakis or linen shirt/pants
Women - Sundress

MORE CASUAL WEDDING DAY OR NIGHT
Men - Dress slacks and dress shirt (with or without tie)
Women - Cocktail length dress or long dress (depending on the fabric)

These are just simple guidelines of what you will see most people wearing.  When in doubt, err on the formal side as most people tend to dress more formal in Mexico.  As long as you don't wear shorts you should be ok. 

Doing Business in Mexico: Opening a Mexican Bank Account

When you set up a business anywhere, one of the first tasks to take care of is to set up a bank account.  Mexico has a number of banks that offer small and medium businesses checking and savings accounts, some in Pesos and some in Dollars (NOTE:  in order to open a dollar account, you have to be a certain number of kilometers from the US-Mexico border).



The requirements vary from bank to bank but here are the minimum standard requirements that you will need to open a business bank account:

• Acta constitutiva (articles of incorporation)
• Official ID (if you are a foreigner, your passport)
• FM-2 or FM-3 visa (your work or investor's visa)
• If you are not the legal representative for your company, you must have a document that testifies you can sign on behalf of the company
• Comprobante de domicilio (proof of address - must be recent, within the last month, Telmex or CFE)
• Minimum deposit (these range from bank to bank...the least I've seen is $6,000 MXN at Bancomer)
• Copy of your RFC
• Business and/or personal references

Remember to check each bank's requirements.  Bring extra copies of everything!

How many expats live in Mexico?

If you are looking for official numbers on expats in Mexico, make sure you look at a number of sources.

How many expats really live in Mexico?

It is difficult to say, because there are many expats flying "under the radar" that are living and working in Mexico on tourist visas.  There are also a number of foreigners that own property in Mexico, but do not live in the country full time.  It is expected that 5 million Americans will call Mexico home by 2025 as people look for low cost areas to retire migrate to Mexico

1.  Americans (Mexico has the largest population of Americans abroad) - estimated anywhere from 200,000 (highly unlikely!) to around 2 million
2.  Canadians - 1.4 million
3.  Spaniards - around 700,000
 
After the financial crisis of 2004 in Argentina, Mexico saw huge numbers of Argentineans flock to Mexico City.  In fact, there are now areas of the city where most of the waiters/models are from Argentina.
 
Now, a funny video about "illegal immigration" to Mexico:
http://www.thedailyshow.com/watch/mon-november-30-2009/american-refugees-seek-health-care-in-mexico

Update on the Mexicana bankruptcy

Several people have been wondering what the current status of the Mexicana airlines situation is, so I thought I'd give a brief update.

• A judge granted Mexicana bankruptcy protection in early September
• The majority of Mexicana shares were purchased by Tenedora K (95% stake)
• Several other airlines are offering discounts to passengers who had purchased tickets on Mexicana
• Mexicana will resume flying in December, at 50% of its original capacity
• Operations will be centered around other airlines in its group - Click and Link

Weekly Currency Update: Mexican Peso

Today the Mexican peso is trading at $12.64 MXN = $1 USD.

Some events affecting the Mexican economy:

-Mexican Peso hits 5 week high
-Industrial growth in China surged
-The European Union announced that it may grow twice as fast as forecast
-Mexico's jobless rate fell in August
-Crude oil (Mexico's 2nd biggest export) jumped 3.4%
-The US Fed said that it would provide additional support to bolster the US economy (largest importer of Mexican goods)

Latin America article roundup



Picture courtesy of The Economist

 With many countries in Latin America celebrating their independence this month, there have been a number of great articles about the current state of affairs in Latin American business/politics and what the future holds. 

The Economist - Nobody's Backyard

Latin Trade - Google Strikes Gold in Latin America

Financial Times - Want a job?  Emerging markets are hiring

Moving to Mexico Without a Job

A lot of people fantasize about leaving their boring cubicle job for a new, exciting job in another country. So how easy is it for you to pack up your things and move to mexico without a job? Answer: not easy at all.


If you are a sales manager at a multinational corporation in your home country and you expect to come down and get a cushy job in middle management, think twice.  It is very difficult to get a job - even at a multinational - if you don't speak Spanish and/or don't have a Mexican work permit.

What about working at your home country's embassy or consulate in Mexico?  While the requirements aren't as tough, many of the embassies require that you live in Mexico for at least 6 months before you apply for a job.  If you apply for a job that is open to foreigners, you will be considered after EFMs (Eligible Family Members of current embassy employees).

While I don't want to discourage people from picking up and moving to Mexico, I want to stress the fact that unless you want to teach English or sell timeshares, you will have a difficult time finding a company to sponsor you for a work visa...but if you are an expat entrepreneur, you don't need a sponsor - just an idea and some seed money to get set up!

Networking in Mexico: Internations

We've been talking about the importance of interpersonal relationships recently, so today I thought I would highlight the Internations networking group. 

A bit about Internations from their website:

InterNations is the biggest global networking site for expats of various nationalities and their family members. At the moment, InterNations unites almost 200,000 members in 235 cities worldwide. On our platform, expatriates and their partners can connect with compatriots, ask for advice on everyday life in their host country, provide other members with useful tips, make new contacts and find information in our City Guides.

To visit the Internations website: www.internations.org

I have personally attended Internations events in Mexico and have met some wonderful people.  The best thing about Internations is you can meet people from all different industries and different countries.  There are executives sent down on expat packages, English teachers, entrepreneurs, embassy workers, and everything in between. 

If you have an Internations meetup in your city, I highly recommend attending one of their events - you won't regret it!

Dealing with Unions in Mexico

The other day I came across an interesting post (back from 2005!) about an expat from Belgium who was living out his dream in Lake Chapala (near Guadalajara) by running a small cafe.  The article talks about how the unions virtually shut him down because of his refusal to cooperate.  Depending on the nature of your business, you might have to deal with unions in Mexico, so this is a very important read:

Unions Frustrate Expat in Mexico

Happy Independence Day Mexico!

Today Mexico celebrate's it's independence day!  The celebration happens tonight at midnight, when President Felipe Calderon gives el grito (shout for independence) "Viva Mexico!".  The celebration will be extra special this year because it is the bicentennial.

Doing Business in Mexico: Forming a Bond with your Mexican Business Partners

Note: Business Partner here means anyone you do business with in Mexico, potential client, buyer, supplier, etc.

One of the main differences that people notice when they first come to Mexico to do business is the way that business is conducted.  We've talked about the 4 hr lunches, but what is really behind the lunchis the personal relationship aspect of doing business. 

I remember when I was looking for a job and interviewed for a Latin American Sales position (mainly Mexico).  The manager went on and on about how great the job was because I wouldn't have to travel, I'd be able to do everything via phone.  I sat back and thought "I may not be traveling, but I also won't be making many sales."  The fact of the matter is that putting a face to a name in Mexico is crucial.  I don't care if you have the greatest product in the world and people are clamoring for it...you still need to meet your potential Mexican business partners in person.

Relationships are built on trust and it is very difficult to trust someone you have never met.  It happens in the US all the time - deals are made over email and the phone - but do not expect the same to work in Mexico.

FAA Downgrades Mexico's Air Safety Rating

With the recent bankruptcy of Mexicana, Mexico and it's airlines have been in the news quite a bit recently.  A story that flew more under the radar is the fact that the Federal Aviation Administration (or FAA) recently downgraded Mexico's Air Safety rating. 

What does that mean for airlines and passengers flying in and out of Mexico?

• US carriers have suspended code sharing with Mexican partners (for example, if you were flying on Aeromexico and had frequent flyer status with Delta, you used to get miles for your Aeromexico flight.  Not anymore.)

• Additional routes to Mexico will not be added by US carriers.

• Travel between the two countries will be even more limited due to the Mexicana problem and the decreased routes.

It's important to note that the regulations are based on international air safety standards and not US based standards.

Mexico is currently taking steps to regain its air safety rating, so hopefully this will a temporary setback.

Currency Update: Mexican Peso

The Mexican Peso is finishing off the week at $12.95 MXN to $1 USD.

Some important news/events that affected the Mexican economy this week:

Mexico consumer prices rose .28 percent in August
Obama spoke out and said Mexico's drug war is not comparable to Colombia in the 80s
"La Barbie" was captured last week, which inspires confidence in Calderon's battle against the narcos
Mexico continues to draw manufacturing contracts away from China
Both auto output and exports were up in August compared to last year

The Cost of Living in Mexico for Expats: Keeping it real

The cost of living in Mexico for expats is a topic that has been covered on a number of websites, but today I'm going to give you my two cents and keep it real.

People often ask "How much money do I need to live comfortably in Mexico?" and my answer is always "It depends."  It depends because "comfortable" is so subjective.  Is it important that you have someone to cook for you 7 days a week or are you fine cooking for yourself (and your family if that's the case)?  Do you want to live in a secure building in a nice area with other expats and Mexicans or do you want to live in a place where you are the only expat for miles and you can interact with the locals?

Many people have the misconception that Mexico is cheap.  While it is less expensive in many aspects, it is by no means cheap. 

MORE EXPENSIVE IN MEXICO:

Electronics
Cell phone service
Land line service (Thanks Telmex! Mexico has the highest phone rates in the world behind Iraq)
Clothing* (yes, you can find cheap clothing at the tianguis (farmer's market type setup) but I'm talking about walking into a store and buying something)
Gasoline
Magazines in English (expect to pay over $6 USD)

LESS EXPENSIVE IN MEXICO:

Produce
Most restaurants
Medical services (doctor, dentist, etc)
Taxis/public transportation
Haircuts (at MOST places)
Utilities (gas, water, electricity)
Maid service
Drivers (you can hire someone to drive you around so you don't have to deal with traffic)

COMPARABLE:

Rents in big cities (ie, Mexico City, Guadalajara, Monterrey)

Mexico Business Etiquette: Gift Giving

When doing business in another country, one of the questions that most often comes up is whether or not it is appropriate to give gifts.  In the United States, people have become very wary about giving gifts because they may be misinterpreted or companies may have strict policies against giving and receiving gifts.  I have not found that to be the case in Mexico.

One of the great things about doing business with people from a different country is being able to share your differences and similarities. 

So what would be considered an appropriate gift?

Food, alcohol, something for their office with your company logo, a coffee table book, or something that is hard to find in Mexico.
Let's say you are from California - a bottle of California wine that is not sold in Mexico would be seen as a good gift. 

It is also common practice in Mexico to send a Christmas card or small Christmas gift to your clients (remember Mexico is 90% Catholic). 

I think the most important thing to remember here is that in Mexico it is highly unlikely that you will "offend" someone when bringing a gift, it might even strengthen your business relationship because it shows you are making an effort to strengthen your interpersonal relationship which is KEY in Mexico.

Social Media Event: Tweet to be heard in Puerto Vallarta

These days everyone is buzzing about social media.  There are many companies that have switched their focus entirely to social media and use their website mainly as a static site with basic information.  The real news, hot content, etc, can be found on their blog, Facebook, or via tweets on their Twitter account.

For anyone interested in social media in Mexico, I highly recommend checking out the "Tweet to be heard Conference" taking place in Puerto Vallarta on October 21-24th at the Hotel Villa Veredero.



Some of the topics to be covered at the conference include:

**Getting Found

**The Art of Engagement

**Creating a Community

**Promotion of your Brand or Service

**Viral Marketing

**Lead Generation

**Twitter/Facebook Integration

 
Social media is really the main source you as a small business owner or entrepreneur should focus on.  For one thing, it's free.  Not only that, but you have the opportunity to be seen and "heard" by people you may not normal be able to reach.  As your circle of influence on Facebook or Twitter expands, your business will grow. 
 
For more details on the conference:
Vallarta Escapes - Tweet to be heard Conference