General overview of business conditions in Mexico. Economic indicators and statistics. Published by Nuricumbo + Partners, consultants in audit, finance, risk and strategy.

1. Doing Business in Mexico
Why Invest in Mexico ?
Opportunities & Risks

2. Doing Business in Mexico
Outline
1 General Overview
2 Infrastructure for Services and Manufacture
3 Business Environment
4 Quality of Life
5 How can we support your Company?

3. Doing Business in Mexico
1 General Overview
A General Information
B Government Structure
C Economic Indicators
D Strategic Industries
E Competitive Economy

4. General Overview
General Information
• Territory1: 1,964,375 km2
(14th largest Country worldwide)
• Administrative Divisions2:
Monterrey 31 States and the Capital City
• Major Cities by Population1,3:
Cancun
Guadalajara • Mexico City (18,972,473)
Mexico City
Puebla
• Guadalajara (4,380,600)
Acapulco
• Monterrey (4,003,517)
• Puebla (2,273,066)
1 Source: INEGI, 2011 (Economic Yearbook)
2 Source: Mexican Presidency, 2012
3 Source: Metropolitan Zones, CONAPO, INEGI, 2005

5. General Overview
General Information
 Population 20111: 114,259,114 Weather
(% of territory)
inhabitants
 Gender Distribution1: Man 49%; Women 23.01%
51%
 Population Growth Rate1: 1.8% (2005
– 2010 period) 51.08%
25.90%
 Religion2: Catholic 89.7%; Protestant
4.9%; Non Religious 3.2%; Various
Religious Associations 2.1%; Jewish 0.1% 0.01%
 Languages2: Spanish (official); Warm Temperate Dry Cold
Indigenous Languages (unofficial, at
least 68).
Source: Mexican Presidency, 2012
1 Source: INEGI, 2011
2 Source: Mexican Presidency, 2012

6. General Overview
Government Structure
• Government Type: Federal Republic
• Executive Branch: Chief of State and Head of Government, 6
year terms.
• Legislative Branch: Bicameral National Congress
• Chamber of Senators: 128 seats, 6 year terms
• Chamber of Deputies: 500 seats, 3 year terms
• Judicial Branch: Supreme Court of Justice: 11 ministers, 15 year terms
• Main Political Parties: Institutional Revolutionary Party (PRI), National Action Party
(PAN) Democratic Revolution Party (PRD).
• Oncoming Presidential Election: July 2012
Source: Mexican Presidency and Federal Electoral Institute, 2012

7. General Overview
Economic Indicators
• Currency1: Mexican Peso GDP Growth Rate
(Exchange Rate: $13.01 Pesos / USD) 8%
• Gross Domestic Product2: $1.039 trillion 5.2% 5.5%
6%
(current USD) 3.3%
4%
• Gross Domestic Product per Capita2: 1.5%
$9,166 (current USD) 2%
0%
• Exports2: 30% of GDP
-2% 2006 2007 2008 2009 2010
• Main Exports: Oil, Agricultural
Products, Machinery, Minerals -4%
• Imports2: 31% of GDP -6%
-6.1%
• Main Imports: Agricultural and -8%
Industrial Machinery and Equipment Source: The World Bank, 2010
1 Source: Mexican Central Bank, April 2012
2 Source: The World Bank, 2010

8. General Overview
Economic Indicators
GDP Composition by Sector
• Gross Capital Formation1: 21% of GDP
3.4% 8.3%
• Inflation2: 3.7% (annual, consumer 6.4%
38.7%
prices)
17.2%
• Central Government Debt3: 33% of GDP
• Cash Deficit3: 2.8 % of GDP 3.5% 15.7%
6.8%
Agriculture Mining
• Foreign Direct Investment 20114: Constuction Industry
$19,439.8 Million USD (current USD) Commerce Transportation
Financial Services Others
1 Source: The World Bank, 2010 Source: INEGI, 2010
2 Source: Mexican Central Bank, March 2012
3 Source: Standard and Poor’s, 2011
4 Source: Foreign Investment National Commission, Ministry of Economy, 2012

9. General Overview
Strategic Industries
Aerospace Automotive Agricultural
• Represents 3% of the GDP and • It is composed by two main
• Comprises
14% of the National sectors: fresh food and
Manufacture, MRO1, Design &
Manufacturing Production. processed foods, beverages
Engineering and R&D.
• Mexico is the 10th Largest and tobacco.
• Accounts over 238 companies automobile worldwide
with 29,000 workers. producer, 6th largest • Mexico is the 12th worldwide
worldwide commercial producer and exporter.
• The level of exports tripled in
vehicles producer and 2nd
only 3 years, growing 16.5% • Mexico is the main worldwide
on 2010. vehicle producer in Latin
producer and exporter of
America.
• The sector includes leading avocado and lemon.
• Exports increased 52% in
companies (i.e. Bomardier 2010, being the 4th worldwide • The sector has more than
Aerospace, Safran exporter. 750,000 trained engineers
Group, Goodrich, Honeywell). • Main exports market: USA and 30 related universities.
1Maintenance, Repair and Overhaul
Source: ProMexico and Aerospace Industry Mexican Federation (FEMIA), 2012

10. General Overview
Strategic Industries
Electrical IT - Software
Medical
• Comprises the manufacture of • Estimated market value for IT
• The production value of the home Services Production (including
Industry reached $590 million appliances, transformers, gen BPO): $4.03 billion US.
USD in 2010. erators, regulators and
engines. • Estimated increase in exports
• Exports reached $6 billion
of IT and BPO Services in 2010
USD in 2010, ranking on the • The GDP of the sector had an
reaches 12%.
11th place worldwide. annual growth rate of 7.9%
• Exports had an annual growth from 2003 to • More than 2,000 IT
2010, accounting to the 0.6% companies, including world’s
rate of 11.4% from 2003 to
of the National GDP. leading companies (i.e.
2010.
IBM, HP, Accenture, SAP).
• Mexico is the leading exporter • Main exports were
in Latin America and primary refrigerators and vacuum • The sector includes Software
cleaners, being the main Production, Call Centers, Data
supplier to the US.
destinations USA and Canada. Centers, ERP Software, etc.
Source: ProMexico, 2011

11. General Overview
Competitive Economy
Transparency International World Economic Forum
Corruption Perception Index Competitiveness Index
• Score: Fell from 3.1 to 3.0
(0 - Highly Corrupt to 10 - Very Clean). • Score: Improved from 4.2 to 4.3
(1-Less desirable to 7-Most desirable)
• Rank: Improved from 98 / 178 to
100/183. • Rank: Improved from 66/139 to 58/142
Source: Transparency International, 2012 Source: World Economic Forum, 2011

12. General Overview
Competitive Economy
Standard and Poor’s
The World Bank
Mexico (Analysis)
Ease of Doing Business Ranking
• National Scale Grade –CaVal:
mxAAA/Stable/-
• Ranking: Improved from place 54 to 53
• Strengths: Macroeconomic stability
supported by all political parties; stable • Progress: Dealing with construction
fiscal debt and interests levels. permits was improved, the access for
credit information was streamlined and
• Weaknesses: Limited fiscal flexibility due to the procedures and costs in trading
a low non-oil tax base; lower real GDP across borders were improved.
growth rate than other emerging
economies; political scenario could hinder
Source: The World Bank, 2012
deep reforms until the next presidential
administration.
Source: Standard and Poor’s, 2011

13. Doing Business in Mexico
2 Infrastructure for Services and Manufacture
A Industrial Parks and Utilities
B Human Capital
C Logistics and International Trade

14. Infrastructure for Services and
Manufacture
Industrial Parks and Utilities
Utilities
There are more
than 250 private Water and Sewer. Provided by local
Industrial Parks in Government in all Industrial Parks.
Mexico. Wastewater Treatment Plants. Available in
Many of them operate under the “Plug & some private Industrial Parks for services
Play” concept: water only.
• Certainty of Land ownership Electricity. Provided by the Federal
• Quality infrastructure Government, serving different capacities
• Proximity to trade routes and labor according the Industrial Park or
independent project.
• Private security
Natural / LP Gas. Distributed by dealers all
• Speculative buildings for lease / sale
over the country, available in most
• Shelter services Industrial Parks.
• Built-to-suit schemes
Optic Fiber. Provided by dealers in some
Source: ProMexico, 2012
Industrial Parks but in most offices spaces.

15. Infrastructure for Services and
Manufacture
Human Capital
Economic Active Population Distribution of Employed Labor
50,273,465 Force by Economic Sector
Economic Active
(44% of total
Population (EAC) population)
10.1% 3.1% Agriculture
EAC Average Age 37.7 years
5.6% 25.9% Industry
Employed 95.15% of EAC
Construction
Unemployed 4.84% of EAC
Commerce
Source: INEGI, 2011
Services
24.8%
9.1% Transport
Available Labor Force:
21.4%
Others
2,437,409
Source: INEGI, 2012

16. Infrastructure for Services and
Manufacture
Human Capital
Working Day
Annual Variation of Employed
• Daily: 8 hrs
Labor Force
6% • Weekly: 48 hrs
4.7%
5% 4.2% 4.3%
3.8%
4% Minimum Wage by Geographical Zone
3% 2.1% Zone A Zone B Zone C
2%
62.33 60.57 59.08
1%
Source: INEGI, 2012 (Pesos per day)
0%
-1% 2006 2007 2008 2009 2010 2011
Strikes and Labor Disputes 2011
-2%
-3% Strikes 13
-4% -3.1% Disputes 10,950
Source: INEGI, 2012
Source: Ministry of Labor, 2012

17. Infrastructure for Services and
Manufacture
Logistics and International Trade
74 Airports Roadway The adequate
• 11 Domestic • 133,000 km of
combination
• 63 International paved roads.
of operational
114 Sea Ports 49 Customhouses infrastructure, a
• 19 North Border
• 53 Cabotage firm regulatory framework and an
• 2 South Border
• 61 Grand Cargo • 17 Coasts
and Cabotage
extensive network of Free Trade
• 11 In-land
Agreements positions Mexico as one of
Access to the US the most competitive countries worldwide
Railroad
• 54 access points
• 27,000 km mainly in the context of international trade.
troughout 3,000
for cargo.
km of border.
Source: ProMexico and Ministry of Finance, 2012

18. Infrastructure for Services and
Manufacture
Logistics and International Trade
Free Trade Agreements % World GDP Free Trade Agreements Network
27.7
• Mexico has signed 11 Free Trade
1.9 Agreements, covering 43 countries.
1.7
• The network allows to access a market of
2.1 more than 1,000,000 potential consumers
(60% of the World’s GDP).
1.6
1.7 • The network includes 6 Economic
Complementation Agreements, Reciprocal
1.7 Protection Investment Agreements with 25
1.9 countries and Double Taxation Avoidance
Agreements with 31 countries.
27.6
Source: ProMexico, 2012
Source: ProMexico, 2012

19. Infrastructure for Services and
Manufacture
Logistics and International Trade
Legal Certainty for Foreign Investment FDI Inflows by Country of Origin
Protection Investment Agreements were
created to protect foreign investments in 3.4% 6.3%
Mexico for:
10.2% 3.4%
• Investment Treatment;
• Expropriation and Transfers; 6.7%
• Investor-State and State-State disputes.
15.0%
Duty Reduction Programs 55.0%
The Mexican Government has created many
mechanisms to encourage manufacturing and
exporting of local companies: Canada Switzerland Japan
• IMMEX: Avoidance of import tax and VAT Netherlands Spain USA
• Prosec: Reduction of import tax Others
• 8th Rule: Reduction of import tax Source: Ministry of Economy, 2011
Source: ProMexico, 2012

20. Doing Business in Mexico
3 Business Environment
A Education and R&D
B Taxation System
C Process to Set up a Company
D Government Incentives

21. Business Environment
Education and R&D
Higher Education Level
• Literacy Rate1: 93% Distribution
7.0%
3.8%
Technician
• Average Level of Schooling2: 8.7 years
Undergraduate
• Total Enrollment in the National Graduate
89.2%
Education System2: 34.4 million students
Areas of Study
(31.7% of Total Population)
9.5% Social and
• Higher Education Level2: 8.7% of Total 33.4% Administrative
Medical
Population enrolled in the National
Engineering and
Education System. Technology
Others
46.9% 10.2%
1 Source: The World Bank, 2010
2 Source: Ministry of Education, 2011 Source: Ministry of Education, 2011

22. Business Environment
Education and R&D
Public Expense in Science and Budget for Research Areas by
Technology per Sector CONACYT
29%
8% 35%
3%
1%
5%
61%
18%
1% 4%
35%
Experimental R&D
Agriculture Economy Scientific and Technical Education
Public Education Social Security
Environment1
Energy Scientific and Technical Services
CONACYT Others CONACYT (Science and Technology National Council)
Source: INEGI (Economic Yearbook), 2011
1CONACYT (Science and Technology National Council)
Source: INEGI (Economic Yearbook), 2011

23. Business Environment
Taxation System
Government Income by Source
• Government Income 2011: $0.217
trillion USD (21.6% of GDP)
20% 48%
• Taxable Income 2009: 13.9% of GDP
(including Oil Rights) Non
Oil
(33%) Oil
• Average Taxable Income of OECD1 (67%)
Countries in 2009: 19.2% of GDP 3%
13% 16%
• Fiscal Reform in 2007: Leaded to the
adoption of the IETU Flat Tax PEMEX (State-owned Oil Company)
Government (Oil Yields Tax)
• Tax Payers Base 2010: 33.5 million Taxable Revenues
(18% increase compared with 2009) Non Taxable (Rights and Duties)
Instututions and Companies
1Organization for Economic Co-operation and Development Source: Ministry of Finance, 2011
Source: Ministry of Finance, 2011

24. Business Environment
Taxation System
Main Federal Taxes Taxable Revenue Income
Distribution
• Income Tax (ISR): 30% of Income 1%
38%
4%
(varies according to income level)
• Flat Tax (IETU): 17.5% of Income
5%
(Complementary tax to ISR) 47%
2%
3%
• Tax on Cash Deposits (IDE): 3% over
Income Tax (ISR)
excess of cash deposits over $1,000 USD Income Tax (IETU)
Tax on Cash Deposits (IDE)
Value Added Tax (VAT)
• Value Added Tax (VAT): 16% over Non Oil IEPS (Production / Services Tax)
Imports
products and services. Others
Source: Ministry of Finance, 2011 Source: Ministry of Finance, 2011

25. Business Environment
Process to Set up a Company
Incorporation Procedure1 Issuing Authority Quick Opening of
Ministry of Foreign Business Office
1. Corporate Name Selection
Affairs
Some local Governments
2. Public Notary Incorporation Public Notary have improved their
3. Public Property and Commerce Office Public Notary / services by providing
(PPCO) Registration PPCO
counseling over
4. Federal Taxpayer ID Registration Ministry of Finance
procedures and
5. Foreign Direct Investment National Registry of
Registration Foreign Investment timeframes to set up a
6. Importers / Exporters List Registration Importers / Exporters company
(if applicable) Registry (legal, corporate and
1 Procedure to set up a company under “Corporation” (S.A.) or “Limited Liability
Company” (S.R.L.) schemes. fiscal advice).
Source: Mexico City’s Secretariat of Economic Development, 2011

26. Business Environment
Process to Set up a Company
Number of Procedures for Number of Procedures needed to
Opening a Business obtain Construction Permits
15 12 13 40 34
17
10 7 17
6 6 10 15
20
5
0 0
Mexico USA Chile India Brazil Mexico USA Chile India Brazil
Time needed for Opening a Recovery Rate (cents per dollar
Business (days) recouped by bankruptcy)
150 119 100 82
67
100
29 50 25 18
50 9 6 7 20
0 0
Mexico USA Chile India Brazil Mexico USA Chile India Brazil
Source: The World Bank, Doing Business, 2012

27. Business Environment
Government Incentives
Main Government Incentives Description Incentive Branch
Payroll Tax 2.5% over Payroll Reduction State
Real Estate Tax Fee based on Property Value Reduction State
Real Estate Transfer Tax Fee based on Property Value Reduction State
Public Property and Commerce Registration Fee based on Property Value Reduction State
Depreciation of Fixed Assets Accelerated Rates Reduction State
Main Government Support Programs Description Branch
Financial Services Diverse Financing Programs (customized) Federal
Entrepreneurship, Incubators, Innovation,
Training and Counseling Federal
Franchises, Commercialization, Exports
Training of Human Capital (BECATE Program) Working-Training Scholarships Federal
Software Industry Development Program Increase competitiveness of IT Industry Federal
Source: Mexico City ‘s Secretariat of Economic Development and Ministry of Economy, 2012

28. Doing Business in Mexico
4 Quality of Life
A Tourism and Culture
B Living in Mexico
C Current Situation in Mexico

29. Quality of Life
Tourism and Culture
Tourism Relevance (January - June 2011
period):
• International Visitors: 38.2 millions
• International Tourists: 11.4 millions
• Main Origin of Tourists: USA (57.4%) and
Canada (18.2%)
• Earnings from International Tourists:
$5,195 million USD
• Surplus on Tourism Trade Balance:
$2,523 million USD
• Air Traffic: 19 million of passengers
Source: Ministry of Tourism, 2011

30. Quality of Life
Living in Mexico
• Extensive Foreign Community with no “Immigrated Status” Resolutions:
major difficulties of integration into the 453 (Jan – Feb 2012)
Mexican society.
• A variety of International Schools 26.7%
38%
(American, German, Swiss, Japanese).
• Recreational Facilities: Golf 6.2%
Courses, Stadiums, Arenas, Concert
Halls, Shopping Malls, Parks, Ridging 3.1% 6.0%
Clubs. 6.0%
4.0%
• World’s Cultural Heritage1: 27 cultural 4.9% 5.3%
places and 4 Natural attractions
US China
(including Prehispanic
Argentina Alemania
Architecture, Tequila Region Landscape El Salvador Canadá
and the National University Campus). Colombia España
1 Source: UNESCO, 2012 Source: Immigration National Institute, 2012

31. Quality of Life
Current Situation in Mexico
National Security Program 2009 – 2012 10th Survey on Insecurity Perception
The National Security Program has • 67% of the surveyed citizens consider
identified the main challenges faced by the Army as the best force to fight crime.
the Mexican Society: • Up to date, there are more than 397,664
Public Security Officers.
• Threats: Organized Crime, Drug
Traffic, Armed Groups, Terrorism and • For most of the surveyed citizens, the
Border Vulnerability. main problem in Mexico is Insecurity
(33.5%), over passing Economic Crisis
• Risks: Social and Politic Conflicts, Lost of (20.1%), Poverty (8.5%) or Corruption
Social Cohesion, Migratory (5.1%).
Dynamics, Pandemics and • 43.2% of the surveyed citizens consider
Epidemics, Environment and Social the Police Operatives to confront the
Warming and Imbalances on the organized crime as failures.
National Development.
Source: National Security and Research Center, Ministry of Source: Mitofsky Consulting, November 2012
the Interior, 2009

32. Quality of Life
Current Situation in Mexico
National Security System
“It is the set of instances, policies, capabilities, processes and tools established by law with
the explicit mission of preserving the integrity, stability and permanence of the Mexican
State, through the creation of public policies and implementation of coordinated actions
aimed at addressing threats and risks that could harm it”.
Objectives:
• Preserve sovereignty and national independence and defend the territory;
• Maintain the constitutional order and the strengthening of democratic institutions;
• Keep the unity of the Federation;
• Provide security and maintain the operation of strategic facilities in the county;
• Make the legitimate defense of the nation’s vital interests with no outer pressures;
• Disable inertia that hinder the economic, social and political development to preserve
democracy.
Source: Ministry of the Interior, 2009

33. Doing Business in Mexico
5 How can we support your Company?
A 1. Financial Advisor to CEOs and CFOs
2. Fraud Prevention and Detection
3. Mergers and Acquisitions
4. Financing and Investment
5. Project Management
6. Business Process Improvement

34. How can we support your Company?
1. Financial Advisor for CEOS and CFOs
Provide value-added advice on accounting and financial matters, offering an independent
point of view with and international perspective and enriching the decision-making
process.
2. Fraud Prevention and Detection
Perform special reviews focused on fraud prevention/detection or on any other area
representing a specific concern for management.
3. Mergers and Acquisitions
Advise companies contemplating to merge, acquire or be acquired by other companies. I
can help on valuation, due diligence, negotiation and integration.

35. How can we support your Company?
4. Financing and Investment
Support in the identification of the best sources of financing for business projects, at the
domestic or international level, and also help to make quantitative and qualitative
analyses of investment projects.
5. Project Management
Management of the implementation of specific projects such as information
technology, compliance programs or certifications, particularly focusing on delivery
times, deadlines, and deliverables quality.
6. Business Process Improvement
Perform analysis and reengineering of business processes, identifying potential
opportunities for cost savings, efficiencies, optimization, and streamlining.

36. How can we support your Company?
Professional Profile
Public accountant, certified in Mexico and the U.S., ex-PwC, former internal auditor for
companies such as WPP, Bombardier, IPG, and Syngenta, and former CFO in the
advertising, consulting, and manufacturing industries. Multilingual and multicultural with
more than 16 years of professional experience in international environments. Working as
independent consultant since 2003.
Academic Background
B.S. in Accounting, graduated with honors (UNAM, Mexico)
Certified by the Illinois State Board of Accounting
Certified by the Mexican Institute of Public Accountants
Certified Fraud Examiner (ACFE)

37. How can we support your Company?
Unique Value Proposition
• Strategic solution to address accounting, financial, tax or administrative matters
effectively and with a highly-personalized level of service.
• Independent point of view with an international perspective.
• Brings solid technical capabilities, broad experience in several industries and several
types of organizations, and the possibility of transferring high value-added knowledge
to your organization.
• Several strategic partnerships at the domestic and International level make it possible
to propose and implement multidisciplinary and personalized solutions to complex
problems.
• Excellent communication skills in several languages and first-hand knowledge of the
Mexico and Latin American markets.
• Flexible compensation totally based on results and on the specific needs of each
project.
• Our 100% satisfaction warranty eliminates the risk for your business.

38. How can we support your Company?
Contact Information
Address: Plateros 16 Suite 504, San Jose Insurgentes 03900, Mexico City
Office: +52 (55) 5339 5839
Mobile: +52 (55) 5453 6309
E-mail: armando@nuricumbo.com; Web: www.nuricumbo.com
Skype: nuricua ; BB Pin: 21BD8276