Political uncertainly hinders Mexican growth

Nearshoring remains one of Mexico’s most important strategic opportunities, but it has not materialised at the scale or speed many initially predicted. However at Crowe Mexico’s border offices, nearshoring-related businesses represented approximately 40% of new clients during 2025, so the impact is real.

“We are seeing investment mainly from the United States and Asia—particularly China and Japan—with automotive and electronics among the most active sectors,” said Héctor García, CEO, Crowe Mexico.

Nevertheless, energy, water, infrastructure, security and regulatory predictability remain constraints. In some regions, security is a concern, proving that turning Mexico’s geographic advantage into long-term investment is going to be harder than predicted.

Andrés Osorio Porta, partner at MGI Bargalló, Cardoso y Asociados, feels that companies are being a lot more cautious about nearshoring than they have been previously.

“US tariffs on steel, aluminium and vehicles that fall outside the rules, plus the uncertainty after Washington declined the 16-year USMCA extension in July, have left several greenfield projects on hold,” he said. “The headline investment numbers still look good, although most of that is reinvested earnings from groups already established here rather than new plants. What has not slowed down is the flow of foreign companies incorporating in Mexico, and they need accounting, payroll and tax support from the first day.”

Even if the political situation was more favourable, industry observers no longer feel that proximity to the United States and Canada is enough on its own to grow the nearshoring market.

“Mexico is now competing globally for increasingly selective investment, and companies are looking beyond geography,” said Javier Jiménez Lizardi, main partner, Russell Bedford, Mexico. “They are evaluating infrastructure, talent, regulatory certainty, security, and the overall conditions required to operate and grow successfully over the long term.”

Lizardi believes the real opportunity goes far beyond attracting new investment. It lies in the broader ecosystem that develops around it. “Every company that establishes or expands operations in Mexico creates demand for talent, suppliers, specialised services, and stronger supply chains, while also requiring sophisticated tax, financial, labour, regulatory, and foreign trade support,” he said. “If Mexico can strengthen legal certainty, improve security, and continue building a competitive business environment, nearshoring can become a powerful driver of long-term economic growth. The opportunity is significant, but so is the challenge of turning Mexico’s current advantages into sustainable investment and lasting value.”

Mexico is working hard to create a better environment for business. One of the most significant changes to the Mexican Financial Reporting Standards (NIF) in recent years is the issuance of the new standards NIF B-1, Basis for the Preparation of Financial Statements, and NIF B-3, Statement of Comprehensive Income.

Together, these standards strengthen the criteria for the presentation and disclosure of financial information and, for the first time, incorporate disclosures related to management performance measures.

“Perhaps the most significant change is the introduction of a new structure for the statement of comprehensive income based on categories such as operating, investing and financing activities, income taxes, and discontinued operations,” said Damien de La Panouse, country leader for Forvis Mazars Mexico. “This approach promotes a presentation that is more consistent and better aligned with the economic substance of transactions. These standards are almost entirely convergent with IFRS 18, Presentation and Disclosure in Financial Statements.”

For companies in Mexico, these changes will require a thorough review of financial statement presentation criteria, as well as the internal processes used to classify, analyse, and communicate financial results.

Following the 2025 wave of sustainability reporting requirements under the NIS standards for private entities and IFRS S1 and S2 for issuers, the next major development in 2026 will be the growing focus on limited assurance, particularly for organisations reporting under the IFRS Sustainability Disclosure Standards (IFRS SDS).

“This represents a significant change for companies, which must not only prepare and publish sustainability information but also ensure that they are ready to undergo limited assurance engagements,” de La Panouse. This has created a market for local accountancy firms that did not exist two years ago.

As a result of the new customs and foreign trade reforms that came into force on 1 January 2026, companies conducting customs operations in Mexico are updating their processes to meet enhanced compliance requirements and strengthen audit readiness. New obligations relating to customs documentation, customs agent records and Electronic Value Manifestation files are designed to improve the traceability, transparency and consistency of foreign trade operations, while providing greater assurance of ongoing compliance with tax and customs regulations.

While the Mexican government has taken a number of steps to strengthen tax collection and enforcement, Lizardi does not believe it has undertaken the comprehensive tax reform that many believe is necessary. The 2027 Economic Package points instead toward expanding the taxpayer base, tightening controls around deductions and tax-loss carryforwards, and stepping up efforts to combat tax evasion and fraudulent invoicing schemes.

“From a business perspective, the key takeaway is that, at least for now, we are not expecting a broad tax reform that introduces new general taxes,” he said. “What companies should expect, however, is a more rigorous enforcement environment and an increasingly sophisticated use of digital tools and data analytics by the tax authorities.”

However, Garcia believes that if you take a closer look at the proposed 2027 reform, it represents a more significant change. “The government describes the package as containing no new taxes or increases in general rates,” he said. “Formally, that is correct. However, the proposed restrictions on corporate deductions, tax-loss utilisation and net interest deductions would materially broaden the taxable base and accelerate cash-tax payments for many companies.”

There has also been significant judicial reform, and the changes are already affecting Mexican and international businesses through greater uncertainty in litigation and the interpretation of tax law.

“Based on the controversies handled by Crowe Mexico, we have observed increasingly restrictive criteria at both the Federal Court of Administrative Justice and the Collegiate Circuit Courts, with decisions that appear more deferential towards the government’s position,” said Garcia. “We have encountered cases in which deposits were recharacterised as taxable income even though evidence was presented showing that they were transfers between accounts belonging to the same taxpayer. The amounts involved can be extraordinary. This illustrates how changes in evidentiary standards or judicial interpretation can create tax exposures even without a change in the wording of the tax law.”

All this change means that one of the most important issues currently facing Mexican companies is the increasing complexity of the regulatory environment. This means that business is booming for local accounting firms.

“I believe that the accounting and auditing profession in Mexico remains healthy in terms of demand, although it is undergoing significant changes,” said Cuauhtémoc Contreras Alfonso, partner at Zesati Contadores, an MGI worldwide member firm. “Demand for services remains strong because companies operate in an increasingly complex tax and regulatory environment. However, there is considerable fee pressure on traditional services, particularly accounting and audit engagements.”

Crowe Mexico grew revenue by 15% in 2025 in nominal peso terms, with approximately 90% of that growth generated organically and 10% through mergers. Fees, however, increased by only approximately 7–8%, while the normal increase in the cost base of an accounting firm is closer to 10%, driven mainly by salaries, technology and training.

According to Alfonso, clients expect greater efficiency and are increasingly reluctant to pay high fees for activities they believe can be automated. Staffing, of course, is a major issue. “For accounting firms, attracting and, particularly, retaining experienced professionals is becoming one of the greatest challenges,” he said. “Younger professionals are also looking for greater flexibility, access to technology, career development opportunities, and a better work-life balance.”

Finding people that have a skill set that fits with client’s increasingly complex demands is also proving difficult. “There is a severe talent shortage for bilingual, highly specialised accountants,” said Rodrgio Olivares, parter at R Olivares y Asociados, a PrimeGlobal member firm. “Accounting firms compete for talent not only with each other, but also directly with nearshoring multinationals building regional shared services centres in Mexico.”

Francisco Bracamonte, tax partner at Kreston BSG, has seen demand become particularly strong in tax controversy, international tax, transfer pricing, regulatory compliance and foreign investment advisory. Outsourcing services such as accounting, payroll and compliance support have also remained active.

Andrés Osorio Porta, partner at MGI Bargalló, Cardoso y Asociados, has seen a surge in foreign trade and customs advisory, driven by the tariff environment and the customs reform. “International tax and transfer pricing has also seen strong demand, because supply chains are being redrawn,” he said. “BPO as well, due to accounting, payroll and treasury for foreign groups setting up here, which is where a good part of our own growth has come from. Anti-money-laundering compliance and sustainability reporting readiness are both picking up, and forensic and internal control work is busier as boards ask more questions.”

​​​​​​​With so much change happening so quickly and new markets opening up, demanding new skills, it would not be unreasonable to think that conversations about mergers and acquisitions are becoming more urgent and that private equity firms are beginning to show an interest. According to Porta, the Mexican market is reaching a tipping point.

“There is nothing spectacular happening at the top of the market, but plenty of movement below it,” he said. “Succession is pushing mid-sized domestic firms into mergers, international networks and associations are actively looking for Mexican members to cover cross-border work, and the private-equity consolidation reshaping the US profession is starting to look this way. I expect it to accelerate. What technology and quality management now cost has quietly raised the size a firm needs to be to compete.”

The coming year presents as many problems as it does opportunities but some of the problems are beyond the industry’s ability to solve. “Investors will continue to be attracted by Mexico’s proximity to the United States, the USMCA framework and competitive labour costs,” said Bracamonte. “However, regulatory certainty, compliance burdens and the overall business environment will remain important concerns. In my view, stronger growth will require greater legal certainty and policies that encourage investment and productivity.” 

Olivares agrees. “The next 12 months will be pivotal for Mexican businesses,” he said. “The principal opportunities will come from artificial intelligence, sustainability, transaction advisory and the continued integration of North American supply chains. The main risks will be the proposed 2027 tax changes, judicial uncertainty, security, talent constraints and the continuing trade discussions with the United States.”

If US politics can align with Mexican ambitions, local firms will find themselves in a whole new playing field.