In 2015, given the adverse global economic conditions, during his annual governmental report, President Enrique Peña Nieto proposed a series of measures to incentivise an oil-dependent slow-growing economy. One of these measures included the creation of special economic zones in the Mexican southeast. Mijares, Angoitia, Cortés y Fuentes, Taxand Mexico, presents an analysis on the SEZs. 


A special economic zone (or “SEZ”) is a geographically limited area located in a place with logistic and natural advantages to be transformed into a highly productive zone. A SEZ works by granting different types of incentives to investors such as: (i) tax and labor incentives; (ii) a special customs regime; (iii) a less bureaucratic regulatory environment; (iv) top-level infrastructure; (v) incentive programs; and (vi) other incentives and preferential conditions.


In a press release issued by the Ministry of Finance on 10 February 2017, they outlined some of the tax incentives that a SEZ would have in general, including: income tax discounts of 100% during the first 10 years and 50% in the following 5 years; tax credits on social security contributions to the Mexican Social Security Institute for up to 50% during the first 10 years and of 25% during the following 5 years; and special treatment on value added tax.  However, these would be established in the decrees of creation of a SEZ.


Discover more: Special economic zones 

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Taxand's Take

This measure to incentivise specific regions of the country should improve their economic condition substantially. The benefits granted to taxpayers that operate in the proposed SEZ seem attractive in a jurisdiction that has always characterised for its strict tax regime and overzealous supervision of taxpayers. Even though the SEZ shall be developed in the following years, prospective investors should consider these locations as potential targets for the establishment of their operations.

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Article tags

Energy Tax | International Tax | Mexico

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