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Running head: MEXICO INSTITUTION ENVIRONMENT

Mexico Institution Environment
Student’s Name
Institution

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MEXICO INSTITUTION ENVIRONMENT
Mexico Institution Environment
Introduction
Also referred to as the United Mexican States, Mexico is found south of the US.
Guatemala, Belize, and the Gulf of Mexico are its border countries. In 2017, the population in
Mexico was estimated to be 129.7 million people. 60% of the population is Spanish, 25%
Indians, 15% Caucasians, while the remaining percentage representing others, which include
Africans. Mexico is among the easiest countries to do business in Latin America, according to
the World Bank report of 2017. Mexico is a member of NAFTA, which allows it to engage
extensively in trade with the US and Canada. Its proximity to the US has worked to its advantage
as some of the US corporations can outsource to it and still have the advantage of reaching the
American market (Stephens, 2017). However, the institutional environment in Mexico
discourages the development of a conducive global business environment affecting the
operations of such businesses. Below is an institutional analysis report for Mexico to identify
global trade challenges, their effects, and strategies available for managers to address them.
Business institutional environment challenges; Mexico
High taxation rates of international businesses
The high rate of taxation is among the significant difficulties experienced in the Mexican
institutional environment and affects international business operations in the country. The
taxation program was formed after consideration of high demand shown by American countries
to relocate to the country to escape high taxes in the US (Estrada-Robles et al, 2018). The
government of Mexico has developed different categories of taxation. For example, residents,
non-residents, and foreign business entities. Resident taxation, which is applied to Mexican

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MEXICO INSTITUTION ENVIRONMENT
companies and residents are the lowest. However, international businesses are offered an
opportunity to enjoy the lowest rates of taxation if they moved their headquarters to the country,
which would make them Mexican companies.
Li...