Mexico is the most attractive country to do business in Latin America

Mexico is the most attractive country to do business in Latin America, according to the report Doing Business 2016 published by the World Bank. 

The country ranked 38 out of 189 economies, an improvement of four positions from last year, surpassing Chile (48), Peru (50) and Colombia (54).

"The country's ranking rose 1.57 points in one year, due to the (financial and tax) reforms that improved access to credit and made paying taxes easier,” said the report's author Santiago Croci in an interview with EL UNIVERSAL.

According to the report, Mexico improved access to credit by implementing a decree allowing a general description of assets granted as collateral. The reform, that applies to both Mexico City and Monterrey, enabled the country to be ranked fifth worldwide in this category.

Also, Mexico made paying taxes easier for companies by abolishing the business flat tax, which allowed it to climb eleven positions, from 103 to 92, in the ranking.

However, the report highlighted that paying taxes became more costly in Mexico because only a portion of salaries is deductible now. These changes apply to both Mexico City and Monterrey. In addition, the payroll tax rate paid by employers was increased for Mexico City.

The report added that starting a business in Mexico takes 6.3 days and six procedures, and that the cost of doing so dropped to 17.9% of the per capita income, compared to 18.6% last year. The country is ranked 65 in terms of times and cost of doing business.

Regarding the country's judicial quality, it stated that “the productivity gains associated with moving from worst to best practice in judicial quality would increase state GDP by as much as 8%.”

The report also highlighted the improvement in the reliability of electricity supply in Mexico City.

“In 2010 a typical customer living in the Mexico City metropolitan area experienced 7.33 hours of power outages. In 2014, just four years later, the same customer would have had to deal with outages totaling only 55 minutes. Between 2010 and 2014 the local utility in Mexico City, the Comisión Federal de Electricidad (CFE), invested 3.76 billion Mexican pesos (about US$244 million) in modernizing electrical circuits and underground networks; improving the maintenance of substations, power plants and other assets; and pruning trees.”