Mexico: Federal government issues tax incentives for nearshoring on certain life sciences sectors (pharmaceuticals, medical devices and agro-chemicals)

In brief

On 11 October 2023, the Mexican President published on the Federal Official Gazette a Decree that grants federal tax incentives for investment in manufacturing-related activities in key sectors, including pharma, medtech, and agro-chemicals, done anywhere in Mexico.


What it means for you?

Certain life sciences companies, who are investing on the nearshoring opportunity, will be able to deduct certain investments and expenses, for the fiscal year of 2023, 2024 and 2025.

In more detail

The two types of investment covered are: (a) investment in new fixed assets and (b) expenses on technical and scientific training.

The benefits relating to fixed assets include the following maximum percentages of deductibility: (i) 89% for machinery and equipment intended directly for research into new products or technology development in the country, (ii) 56% for machinery and equipment intended for the manufacture of pharmaceutical products, antiseptic products for pharmaceutical use, diagnostic substances, tablets, capsules or pharmaceutical solutions and injectable active ingredients, and (iii) 56% for machinery and equipment intended for the manufacture of electron microscopes, electronic medical equipment, laboratory instruments and equipment, equipment for analysis, laboratory tests and tests, diagnostic and radiotherapy equipment, pacemakers or hearing aids for deafness and other implant devices.

Companies are required to maintain a specific registration system of the respective investments.

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For further information and individual assistance, regarding this opportunity, please get in touch with our experts.

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