Setting Up: Factura Electronica required starting in 2011

In a past post, I went over what a factura was (think of it as an official receipt for tax purposes).  Beginning January 1, 2011 all businesses in Mexico will be required to use what is called "Factura Electronica".  This is Hacienda's way of electronically keeping records.


After the end of 2010, all receipts over $2,000 MXN must be electronic. 




So, as a small business, how do you go about issuing electronic receipts? 

There are a number of companies that are authorized by SAT (Hacienda) to help companies with electronic receipt software:

DigiFact

Enlace Fiscal

Castelec

Facture Ya

Weekly Currency Update: Mexican Peso

Today the Mexican Peso is trading at $12.72 MXN = $1 USD. 

Events affecting the Mexican economy this week:

• Durable goods orders in the US fell in June
• Auto production in Mexico has picked up
• The peso hit a 2 month high this week due to the fact that economic growth accelerated faster than expected (grew 8.9% in May, while 8.5% growth was expected)
• Cemex posted weak second quarter earnings, but investors were hopeful because for the first time in several quarters US cement volumes should grow (around 8-10%)

Televisa sells off stake in Volaris

Article courtesy of Poder360

Inbursa and Televisa Sell Off Volaris

The Slim family bank and the television company sell their shares of airline, but Interjet remains out

Inbursa and Televisa, which up until last Fri. owned 50% of Volaris airline stocks, sold their shares to a new group of Mexican investors. Grupo Televisa said it received $80.6 million for its 25% of shares, while Inbursa has made no statement. Interjet and its offer of $360 million for the entire airline remained outside the purchase and sale of the stocks. Among Volaris's owners are Maria Cristina Kriete Avila (a relative of Roberto Kriete of TACA, with 25% of Volaris), Emilio Diez Barrozo Azcarraga and Ignacio Guerra. These investors joined private capital fund Indigo Partners LCC, which specialize in transportation and aviation, to make the purchase.

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Note: Volaris is a low cost airline (similiar to Southwest) in Mexico.  Interjet is Volaris's main competitor.  Inbursa is a bank owned by Carlos Slim.







Read more: http://www.poder360.com/dailynews_detail.php?blurbid=8206#ixzz0uzU8eBW8

Mexico Business Etiquette: The Importance of Titles

In today's more relaxed business environment it is not uncommon to refer to people by their first names, even when you have never met in person.  In Mexico, the business environment tends to be much more formal (in general, but it also depends on your industry).  Titles are very important, so when you are addressing someone in an e-mail or in person be sure to refer to them by their title and their last name until they tell you otherwise. 
Some popular titles in Mexico:

Lic. (pronounced as "lick" in English) - this is short for Licenciado or Licenciada and it refers to someone who has an undergraduate degree, or licenciatura.  Basically a way to show you made it through college.  A Licenciado can hold any number of degrees from business administration to law. 

Ing. - this is short for Ingeniero or Ingeniera, someone who has a degree in Engineering.

Arq. - short for Arquitecto or Arquitecta, which means Architect.  It may seem strange to say "Arquitect Rodriguez", but it is a formality that is very much appreciated.

Sr. - short for Señor.

Sra. - short for Señora, this is the equivalent of Mrs. in English.

Srta. - short for Señorita, refers to an unmarried or young woman.  When all else fails, use Senorita instead of Sra.  You will never offend someone for making them feel younger!

Names in Mexico

Many foreigners are confused by what seems to be a lot of names in Mexico.  I'm going to show you how the naming sequence works.

Let's take Arq. Rodriguez as an example.

His full name:  Luis Fernando Rodriguez Villanueva

First name: Luis
Middle name: Fernando
Paternal last name: Rodriguez*  (this is the name you will refer to him by)
Maternal last name: Villanueva

Let's say Luis Fernando is married to Gabriela Fernandez Coto.  Her name becomes Gabriela Fernandez de Rodriguez.  Let's say they have a son named Jaime.  Jaime's full name would be Jaime Rodriguez Fernandez.  The first last name is always the paternal last name and the second is always the maternal.

E-commerce in Mexico

When most people think of business in Mexico, e-commerce isn't exactly the first thing that comes to mind.  Part of this is due to the fact that a good part of the population does not own/use a computer, but things are changing.  While computers used to be something that only the uppper and upper middle classes had access to, today there are a number of programs that allow consumers to pay off a computer
in monthly payments (such asTelmex). 

In my opinion, e-commerce in Mexico is going to explode over the next few years.  Consumers are getting more used to paying bills and other services online, and it is just a matter of time before more companies realize the benefits of offering online ordering services to their customers. 




Some interesting Mexico internet facts:

• In 2008, 27.4 million Mexicans were online, a number expected to increase 82% by 2012!
• Mexico was one of the biggest growth markets for Facebook in 2009
• E-commerce sales in Mexico in 2006 were $537 million and reached $1.6 billion in 2008
• Travel packages are what Mexicans purchased the most online in 2009
• In 2007, 48% of internet users in Mexico were female, while 52% were male
• In 2008, PayPal expanded to Mexico

Off Topic: Mexico Road Trip

I recently took a road trip through the Mexican states of Sonora, Sinaloa, Nayarit and ended in Jalisco.  I was very fortunate to have the opportunity to meet people and see places that not many people get to see. 

I crossed the border at Nogales, Sonora and proceeded down to Hermosillo, Sonora.  Hermosillo is the state capital and home to some of the most beautiful sunsets (example below) and best steak I've ever eaten.  The people of Sonora are some of the friendliest I've encountered. 

As I traveled down Sonora, I passed through towns like Guaymas - a beach town in the middle of the desert, Ciudad Obregon, and Navojoa.  I picked up some coyotas (Mexican pastries from the north) and flour tortillas along the way.

Sinaloa is famous for agriculture (tomatoes!) and its seafood.  One of my favorite parts was visiting Mazatlan.  Check out this sunset...

The Mexican government has done a wonderful job of improving its roads.  In honor of Mexico's bicentinneal this year (Independence from Spain in 1810) and the 100th anniversary of the Mexican revolution, Mexico has created what they call "Ruta 2010".  There are markers along the toll roads that show you are on the historical route, which highlights important monuments from the revolution and other important sites.

For more info on the Ruta 2010 click here (in English)

Mexico and South Korea to restart Free Trade Agreement talks

Mexico and South Korea had initiated free trade agreement talks back in 2007, but the talks were put on hold in 2008 because Mexico was worried about a possible trade imbalance.  Felipe Calderon and

South Korean President Lee Myung-bak visited Mexico earlier this month to discuss a number of issues, trade being one of them.

A free trade agreement between South Korea and Mexico would be a huge boost for trade between the two countries.  Many people are unaware that South Korea is actually Mexico's 6th largest trading partner.  Trade between Mexico and Korea has tripled since 2001, and reached $11.4 billion in 2009.

Many Mexican business owners opose a free trade agreement with South Korea because they say more analysis needs to be done to examine how the agreement will negatively impact Mexican businesses.
South Korea hopes to have some kind of agreement by the end of the year, but it remains to be seen whether both countries will make a decision by then.