Financial Services Sector in Mexico

Since 2011, Mexico has had a stable financial performance due to sound management of public finances. Strategic geographical position and a network of trade agreements provide Mexico direct access to the USA, (the world’s largest market) and to more than one billion consumers on several continents. The new Administration is currently working on a Fiscal Reform aimed to improve enforcement of existing and future regulations in order to boost the country’s tax intake.

Market overview

Mexico has the second largest economy in Latin America and according to a study conducted by Goldman Sachs, it may become the 5th largest economy in the world by 2050.

For Financial Services there are six main business niche areas:

  • Public Private Partnerships

  • Listings (stock markets)

  • Arbitration (Legal services)

  • International Finance Reporting Standards (IFRS)

  • Insurance/Reinsurance

  • Private Equity Funds

Key opportunities

Public Private Partnerships

The new Peña Nieto Administration has informed that they will invest £65.2 Billion GBP on relevant Transport (including railways) and Communications Infrastructure Projects. The Communications and Transport Ministry (SCT) is currently studying the possibility of developing some of these projects under the PPP scheme. The country’s successful experience in using PPPs include public services, healthcare, education and roads projects.

UKTI Mexico has been heavily involved in the organisation of important visits to the UK from Mexican State governments to push further the introduction of PPP’s. Some State Governments have already made important legal reforms in favour of PPP’s. Mexican firms and Government Institutions are keen to associate with (principally) UK firms with the relevant experience.

In addition, UKTI Mexico works closely with a number of UK Financial Services Associations who can inform UK firms on the development of the Mexican projects.

Some of the most important Infrastructure projects are:

  • The Transpeninsular Passenger Rail Project that will run from the City of Merida in the Yucatan, to Punta Venado in the State of Quintana Roo. The project will significantly boost tourism and business visitors in general.

  • Developing State hospitals, cultural centres, prisons and water projects.

LISTINGS

Several Mexican companies doing business internationally are reaching the point where they need capital to grow and carry out their expansion plans. As they introduce professional management, they are starting to meet international accountability and transparency requirements to list in New York.

London offers an attractive alternative with the London Stock Exchange and Alternative Investment Market (AIM).

In May 2008, a well-known mining company, Peñoles announced it would list its gold and silver operations on the London Stock Exchange. Fresnillo plc, the world’s largest primary producer of silver has now achieved a successful flotation.

(www.fresnilloplc.com).

During an LSE visit to Mexico in July 2013, the Head of the Americas met possible Mexican candidates to list at Main.

ARBITRATION

Legal services, and in particular arbitration, is relevant in Mexican business due to the significant number of companies developing international business.

Currently there are several local law firms partnered with international law firms, who are keen to promote London as the top arbitration centre in the world. During the July 2013 visit of The Lord of London to Mexico, he held an event with a selected group of the the Mexican Bar Association and Mr. Francisco Gonzalez de Cossio, the only Mexican member of the LCIA.

IFRS

Since 2012 all companies listed on the Mexican Stock Exchange in Mexico prepare and produce all of their financial statements under IFRS. The UK Accountancy sub-sector is a pioneer on IFRS.

  • At present, the universities offering post-graduate degrees on IFRS are ITAM, and Tecnologico de Monterrey).

  • The Mexican Institute of Public Accountants has an MoU with the ICAEW. Also, IA Seminars and Baker Tilly Mexico (one of the 3 UK accountancy firms established in Mexico) are currently working together.

  • There are opportunities for other UK Accountancy Firms to develop partnerships with local firms on various IFRS applications.

INSURANCE/REINSURANCE

Two British insurance companies are presently operating successfully in Mexico. Royal Sun Alliance (RSA, mainly in life, property and damages) and BUPA (health).

Mexico has become the most important reinsurance market in Latin America for Lloyd’s of London.

Private Equity Funds

The Private Equity market in Mexico is more mature. Currently there are 50 Funds which had $1,071 million USD invested in 2010. The average per fund in 2010 was $41 million; with around $8 billion USD accumulated investment.

  • There are good opportunities for British Limited Partners (LP’s)

  • General Partners (GP’s) established in Mexico have shown interest in partnering with British GP’s.

Latest export opportunities – Financial services

Latest export opportunities – Mexico

Getting into the market

Key entry points into the Mexican Financial Services market is for UK to find local partners or end users.

Mexican companies and decision makers usually enjoy having initial face to face negotiations to know their potential partners. Therefore, it is best when UK companies have one-on-one meetings with sector players because they can obtain further information.

More about doing business in Mexico

Contacts

Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).

To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.

Fernando Estandia

UK Trade and Investment – Head of Financial Services

T:+52 55 1670 3207

E: Fernando.Estandia@fco.gov.uk

Gisela Gonzalez Flores

UK Trade and Investment Senior Officer

T:+52 55 1670 3206

E: Gisela.Gonzalez@fco.gov.uk

Website: www.ukinmexico.fco.gov.uk

Contact your local international trade team

Events

UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.

Visit of the Lord Mayor of London to Mexico City

Dates: May 2014

Latest events – Financial Services

Useful links

More about OMIS and other UKTI services for exporters

Sectors: Financial & Professional Services
Countries: Mexico
Topics: Finance
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