Distrito Federal (DF) is fDi’s Mexican State of the Future. By virtue of housing the capital city, it is the most cosmopolitan of Mexico’s states and although geographically it is the smallest, its nine million inhabitants make it second in terms of population size. Economic indicators point towards its potential, with a GDP of $138bn and FDI inflows of $10.6bn in 2004.

DF’s success in attracting FDI is mainly due to its incentives, central location, access to markets and a high-quality workforce. Its increasingly sophisticated population has access to an excellent range of services and some of the best universities in the country. It is also well connected: 37% of households have internet access and more than 49% of the population owns a mobile phone. DF was also voted the state with the best economic potential, best IT & telecoms infrastructure, best transport system and best quality of life. It also received top marks for best human resources. Wal-Mart and HSBC were just two of the many companies that invested heavily in the state in 2004.

While the cost of centrally located office space is higher than in other locations, it is on a par with the cost in runner up Nuevo León and other main industrial centres. Salaries are higher than the Mexican average but there is a pool of highly educated and experienced labour to draw on.

DF won in the transport category, too: it is home to Mexico’s main passenger and cargo airport, is one of the main hubs for highways, and has the country’s most comprehensive transport network. It is also a leader in culture with more than 50 museums, 80 theatres and a plethora of restaurants for all tastes.

The DF government has developed a proactive campaign for productive specialisation and dynamic insertion on the regional and worldwide markets. It has also invested heavily in high technology and has actively consolidated industrial clusters. The comprehensive packages to attract investment include programmes to train workers, fiscal incentives that promote investment through reductions of up to 100% in the payment of taxes, and rights for concepts such as real estate purchasing and property, payroll, building licences and so on.

Runner up:Nuevo León


Nuevo León was the winner of the best human resources and best FDI promotion strategy categories, and scored highly in best IT & telecoms and best quality of life. Besides attracting big investments and having the most aggressive promotion policies, Nuevo León had a GDP of $53bn and FDI of $690m in 2004. Monterrey, the state capital, will host the 2007 Universal Forum of Cultures and is undergoing extensive urban regeneration, including the reconstruction and extension of its transport system. Among many new projects is a new highway and international bridge to the US.

Nuevo León has a privileged position close to the US border. Its culture is closely associated with that of nearby Texas and it has a forward-looking, entrepreneurial population. It houses Mexico’s second most important airport and has a highly connected population, with 55% owning a mobile phone and 20% with internet access. It is a favourite location for business people, who find its excellent promotion packages, efficient government and high standard of living a strong incentive for investing in the state.




Winner: Distrito Federal

Not only did DF receive Mexico’s largest FDI inflow in 2004 but it has the biggest economy in terms of GDP. The state’s economic potential of GDP growth is 6% annually and, containing the capital city, it has retained a high level of investment even through the years of economic malaise. The combined investment in the state in 2004 was $15bn, a per-capita investment of $1700.

Runner up:Estado de México/Querétaro

Estado de México has the largest population (13 million), a GDP of $78bn in 2004 and has shown constant high levels of GDP growth in the past 10 years. So far this year there have been more than 26 FDI deals, of which the three most important were AMB-G Acción, Gates de México and Aztra Seneca.

Querétaro was the fastest-growing state in 2004 with 6.1% GDP growth. Many companies have relocated there, attracted by a beneficial programme of incentives and a reputation for high quality of life. Apart from the substantial expansion of some of its existing companies, last year, 98 new companies were established in Querétaro, including Guardian Industries, Comex Lafarge and Samsung.





Winner: Oaxaca

Oaxaca, a state geared mainly towards tourism, has recently shown a consistently stronger GDP growth than the national average. Extremely low property rents and some of the lowest wage levels in Mexico make it the most cost-effective location in this year’s competition.

Although salaries are low (middle managers earn about $6000 p.a. and secretaries $2000), the state has an educated and capable workforce. It is also promoting investment from industry and, besides having the lowest industrial rents in the country, it offers beneficial incentive packages to potential investors.

Runners up: Baja California/


Baja California has the highest per-capita investment in education and also won the judges’ votes for one of the best investment incentives programmes, including help with specific skills training. Having a border with the US makes the transport of exports cheaper.

Sinaloa is one of Mexico’s most dynamic economies, attracting 81 new companies in 2004. Besides a low-cost, efficient workforce, the government of Sinaloa provides attractive tax holidays for up to seven years.

The low cost of labour in Veracruz helped to secure its position as runner-up. The state received FDI from 224 firms in 2004 and has Mexico’s main oil-exporting ports, which represent 29% of the country’s ocean freight.





Winners: Coahuila/Nuevo León

Coahuila, which has 2.3 million people, has the highest percentage of population holding a university degree (26%) and has 60 universities and institutes of higher education. High marks were also awarded because of its five R&D centres: CIDIAC specialises in the automotive industry, CINVESTAV (metallurgic engineering), CIQA (polymers), COMIMSA (materials) and PLASTURGIA (plastics). The state has one of the best schools in Latin America for agricultural, animal and environmental sciences. The excellent skills pool is part of the reason that Coahuila has been able to sustain increasingly significant inflows of FDI with significant investments, such as Whirlpool and Trinity Industries in 2004.

The judges ranked Nuevo León top for the quality of its academic institutions, with 109 universities that have made the state a regional centre for learning. One of Mexico’s best known institutions, ITESM, has several specialised research facilities, including a leading business school. Monterrey’s City of Knowledge project has formed co-operative arrangements between academia, the private sector and the government – a big draw for investors, especially those that need a highly skilled workforce.


Runners up:Distrito Federal/Sonora

DF has some of the best universities in the country, their quality and diversity was ranked very highly by the judges. Sonora, joint runner up, is enjoying one of the highest growth rates in Mexico and the investment by Ford to expand its assembly plant was amongst the many important FDI deals in 2004. Sonora’s universities have a good reputation and opportunities in the state are a magnet for high-calibre workers. Indeed, Sonora has one of the highest percentages of the population with a degree and sees its skilled workforce as an asset, ensuring that further training is included in incentive packages.





Winner: Distrito Federal

DF is the most interconnected state in Mexico with the highest density of telephone lines in the country and the second highest mobile phone ownership (49%) and internet connection (37%). The government of DF is committed to significant public investments in telecoms infrastructure.

Runner-up: Nuevo León

Nuevo León has the highest level of mobile phone ownership in Mexico (an average of 55% of the population) and high percentages of telephone lines and internet connectivity.





Winner: Distrito Federal

DF is the country’s main transport hub with 9430km of highways, 212km of railways and a 201km underground system, which transports around 4.5 million people a day. Its airport, the most important in the country, received 23 million passengers and moved 37,000 tons of cargo in 2004. The state government is investing heavily in new highways, which will cross the state and assure a quick passage through Mexico City as part of an integrated transport plan.

Runner up: Nuevo León

Nuevo León has a world-class commercial international airport, with a cargo terminal that handles more than 40,000 tonnes a year and 190 weekly non-stop flights to 10 major US cities. It has a well-integrated transport system and some of the best links to the US with 7217km of highways and 1092km of railroads, with four cargo railway terminals. Monterrey has an expansive public transport network that includes two subway lines in its metroplex area.





Winner: Distrito Federal

Plagued by pollution for many years, the state has recently undergone a revival and people are returning to live in DF, a fact highlighted by the judges, who gave it top scores for healthcare and ranked it highly for schools and culture. In addition to the state’s 2000 buildings recognised by Unesco as historical monuments, Mexico City is one of the most exciting cities in the world, offering the biggest choice in the country when it comes to cultural events, entertainment and food.

Runner up: Nuevo León

Nuevo León scored highly thanks to the good reputation of its more than 60 bilingual schools. It took second place due to its excellent healthcare and the range of attractions that make it a family-oriented state with excellent urban infrastructure.





Winner: Nuevo León

Nuevo León scored well for its 100 Cities-1000 Companies programme, which has a team of specialists focused on finding, contacting and visiting specific companies interested in expanding operations into Nuevo León. A well-defined agenda is set for business executives to travel to potential locations and they are given detailed information on the advantages, costs, incentives and all other information related to investing in Nuevo León. The state has a robust and diversified economy and is the home of strategic economic clusters that attract both traditional and knowledge-based industrial activities.

Nuevo León has struck deals with other state governments, such as Coahuila, Tamaulipas, and Texas in the US, to promote themselves as a united region with a co-ordinated transport network and preferential agreements.

Runner up: Aguascalientes

Aguascalientes had the second highest GDP growth in 2004 and has consistently attracted FDI (70% of Japan’s investment in Latin America is located in Aguascalientes). It is generally ranked as one of the safest states with a high level of healthcare and excellent public services. The state government’s incentives include the UNO Programme (One day, One procedure, One form) and it has improved competitiveness and transparency. The state has the lowest incidence of union unrest, an efficient legal system and one of the lowest corruption indices in Mexico. There are plans to transform the state into a national distribution and logistics centre with many projects, including an international conventions centre, in the pipeline.