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IVA in Mexico: A 2026 Guide to Mexico's VAT for Businesses and Buyers

Quick answer: IVA, short for Impuesto al Valor Agregado, is Mexico's value added tax (VAT). The general rate is 16%. Qualifying businesses in the northern and southern border regions charge 8%, and exports, most basic food and medicines are taxed at 0%. Businesses add IVA to their sales, deduct the IVA they pay on purchases and file a return with the SAT every month.

Last reviewed: October 2026. This guide is general information, not tax advice. Rules change, so confirm specific cases with a Mexican tax adviser.

IVA in Mexico at a glance

Item Detail
Name Impuesto al Valor Agregado (IVA), Mexico's VAT
General rate 16%
Border region rate 8%, for qualifying businesses in the northern and southern border regions, through December 31, 2026
Zero rate 0% on exports, most basic food, medicines and certain other goods
Exempt Some goods and services, such as residential rent, medical services and accredited education
Who collects it Businesses registered with the SAT
Filing Monthly, due by the 17th of the following month
Law Ley del Impuesto al Valor Agregado (LIVA)
Tax authority Servicio de Administración Tributaria (SAT)

What is IVA in Mexico?

IVA stands for Impuesto al Valor Agregado, which translates as "value added tax". It is the Mexican version of the VAT used across Europe and Latin America, and it is the tax you see added to almost every bill in Mexico, from a restaurant check to an invoice for industrial parts.

The final consumer bears the cost. Businesses act as collectors: each one charges IVA on what it sells, deducts the IVA it paid on what it bought, and sends the difference to the government. Because every step in the supply chain only pays tax on the value it adds, the total collected ends up equal to the rate applied to the final price.

The tax is set by the Ley del Impuesto al Valor Agregado and administered by the SAT, Mexico's tax authority. It is one of the federal government's largest sources of revenue.

Mexico IVA rates in 2026

Rate Applies to Examples Can the seller recover IVA on its purchases?
16% Most goods, services and imports Electronics, restaurant meals, professional services, most manufactured goods Yes
8% Qualifying businesses in the border regions Goods sold and services provided locally in cities such as Tijuana, Ciudad Juárez or Chetumal Yes
0% Exports and specific goods listed in the law Exported goods, most unprocessed and basic food, patent medicines Yes
Exempt Specific goods and services listed in the law Residential rent, medical services, accredited education, books and newspapers No

The 16% general rate

Unless a specific rule says otherwise, every sale of goods, provision of services, rental and import in Mexico is taxed at 16%. Rates have been stable at this level for more than a decade.

The 8% border region rate

The 8% rate isn't written into the IVA law itself. It comes from a presidential decree of tax incentives for the northern and southern border regions, which lets qualifying taxpayers apply 8% directly to their sales in the region instead of 16%. The latest version, published in the Diario Oficial de la Federación on December 31, 2025, extends the incentive through December 31, 2026.

The northern region covers municipalities along the U.S. border, including Tijuana, Mexicali, Ciudad Juárez, Nogales, Nuevo Laredo, Reynosa and Matamoros. The southern region covers municipalities along the Guatemala and Belize borders, including Chetumal and Tapachula.

A few conditions apply, according to the SAT's FAQ on the incentive:

  • The business must file a notice with the SAT to use the incentive.
  • The goods must be delivered, or the services provided, inside the region. The customer can be located anywhere.
  • Some activities are excluded, including sales of real estate and intangibles, digital services and most transport that leaves the region.

Because the decree has to be renewed, check its status each year.

The 0% rate

Article 2-A of the IVA law lists goods taxed at 0%. They include most unprocessed animal and vegetable products, most basic food (prepared food and most beverages other than milk are taxed at 16%), patent medicines, feminine hygiene products and certain agricultural inputs such as tractors and fertilizers. Exports are also taxed at 0%.

Exempt goods and services

Exempt items carry no IVA at all. They include the sale of land and houses, residential rent, medical services provided by doctors, education from accredited schools, books and newspapers, public land transport of people, and certain financial services.

0% vs exempt: why the difference matters

To a shopper, 0% and exempt look identical: no IVA on the receipt. For the business selling the product, they are very different.

Sold at 0% Exempt
IVA charged to the customer None None
IVA paid on the seller's own purchases Can be credited Can't be credited; it becomes a cost
Typical result The seller often has an IVA balance in its favor and can ask for a refund Higher costs built into the price
Common examples Exporters, food producers, pharmacies Landlords of housing, private schools, doctors

This is why exporters, including most manufacturers selling to the U.S., end up with IVA credit balances. They pay 16% on materials, energy and services in Mexico but charge 0% on their exports, so the SAT owes them money. Getting it back is covered in the refund section below.

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How IVA works: a worked example

Here is a simple chain with a supplier, a manufacturer and a retailer, all charging the 16% rate. Amounts are in pesos.

Step Sale price before IVA IVA charged (16%) IVA paid on purchases IVA sent to the SAT
Supplier sells material to a manufacturer 1,000 160 0 160
Manufacturer sells the finished product to a retailer 2,500 400 160 240
Retailer sells to a consumer 4,000 640 400 240
Total 640

The SAT collects 640 pesos in total, which is exactly 16% of the final 4,000-peso price. Each business only paid tax on the value it added.

How to calculate IVA yourself:

  • To add IVA to a price: multiply by 1.16. A 1,000-peso price becomes 1,160 pesos.
  • To find the IVA inside a price that includes it: divide by 1.16 to get the price before tax, then subtract. 1,160 ÷ 1.16 = 1,000, so the IVA is 160.
  • At the 8% rate: multiply by 1.08, or divide by 1.08.

Is there sales tax in Mexico?

There is no separate sales tax in Mexico. IVA does that job. Unlike U.S. sales tax, which is charged only at the final sale and varies by state and city, IVA is charged at every stage of the supply chain at a single national rate, and businesses credit what they paid along the way.

Two other taxes can appear on purchases:

  • IEPS (Impuesto Especial sobre Producción y Servicios), an excise tax on specific goods such as fuel, alcohol, tobacco, sugary drinks and high-calorie foods.
  • State taxes, mainly the lodging tax on hotel stays, which varies by state.

On prices and receipts, look for two phrases. "IVA incluido" means the tax is already in the price. "+ IVA" means it will be added at the till. Businesses that need to deduct the tax ask for a factura, the electronic invoice known as a CFDI.

IVA for businesses: registration, invoicing and filing

Register with the SAT

Any business selling taxable goods or services in Mexico needs an RFC (Registro Federal de Contribuyentes), the Mexican tax ID. Mexico has no small-business threshold below which IVA doesn't apply, so registration comes first, before the first invoice.

Issue and collect CFDI invoices

Every sale needs a CFDI (Comprobante Fiscal Digital por Internet), an electronic invoice validated by an authorized provider and reported to the SAT. The CFDI shows the price, the IVA charged and both parties' RFCs.

It matters on the buying side too. A business can only credit the IVA it paid if it holds a valid CFDI for the purchase and the purchase was actually paid. No invoice, no credit.

File a monthly return

IVA is calculated and paid monthly. The return for each month is due by the 17th of the following month, so October's IVA is due by November 17. The amount owed is the IVA charged on sales minus the creditable IVA paid on purchases. If the result is negative, the business has a balance in its favor, which it can carry forward against future IVA or claim as a refund.

IVA withholding

In some transactions, the buyer must withhold part of the IVA and pay it to the SAT directly instead of paying it to the seller. Common examples under Article 1-A of the IVA law:

  • Companies paying individuals for professional services or for renting property generally withhold two-thirds of the IVA.
  • Companies hiring land freight services withhold 4% of the price.
  • Digital platforms that sell on behalf of individuals withhold part of the IVA on those sales.

Withholding rules have exceptions and have changed several times, so check the current version with your accountant before setting up supplier payments.

Late payment

Unpaid IVA is adjusted for inflation and carries monthly surcharges (recargos), and the SAT can impose fines on top. Interest builds quickly, so it is cheaper to file on time and correct later than to file late.

IVA on imports

Goods imported into Mexico are subject to 16% IVA, paid at customs together with import duties through the import declaration, known as the pedimento.

The IVA is calculated on more than the invoice price. The base is the customs value of the goods plus the import duty (IGI) and other charges that apply to the import. For example, if a shipment has a customs value of 100,000 pesos and pays 10,000 pesos in duty, the IVA is 16% of 110,000 pesos, or 17,600 pesos.

For a registered business, import IVA isn't a final cost. It can be credited on the monthly return like any other IVA paid, as long as the pedimento is in the company's name. The real cost is cash flow: the money leaves at the border and only comes back weeks later through the return.

Importing components into Mexico?

We map the full landed cost of a Mexico move, including duties, import IVA and the cash tied up at the border, before you commit.

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IVA for manufacturers: IMMEX and IVA certification

Most foreign manufacturers in Mexico work under IMMEX, the program that lets export manufacturers bring in materials, components and machinery temporarily, process or assemble them, and export the finished goods. Our guide to how IMMEX works covers the program itself.

Since 2015, temporary imports under IMMEX have generally been subject to IVA, just like permanent imports. For a plant importing millions of dollars of components a month, paying 16% in cash at the border and waiting to recover it would tie up a large amount of working capital.

That is what IVA/IEPS certification solves. Certified companies receive a tax credit equal to the IVA on their temporary imports, so no cash changes hands at customs. According to Tetakawi's summary of the rules, the general conditions include:

  • Meeting a minimum share of temporary imports that are later exported or returned
  • At least 10 workers registered with the social security institute (IMSS)
  • A positive SAT tax compliance opinion
  • Inventory control systems that track imported materials

Certification comes in three levels, A, AA and AAA, with stricter requirements for the higher levels, such as more years in operation and a larger workforce or machinery base. It must be renewed before it expires.

For companies that don't run their own IMMEX program, the alternatives are working through a contract manufacturer or a shelter company that already holds IMMEX and certification. Our page on contract manufacturing in Mexico compares those options.

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How to get an IVA refund in Mexico

Refunds for businesses

A business with an IVA balance in its favor can ask the SAT to pay it back. Exporters file these claims most often, because they charge 0% on exports while paying 16% on their inputs.

The request is filed online through the SAT's portal, with the monthly return, the CFDIs behind the credited IVA, proof of payment, and, for exporters, the export pedimentos. Under Mexico's Federal Tax Code, the SAT has 40 business days from a complete application to pay. In practice, it often asks for more information, and each request pauses the clock, so refunds regularly take several months.

A few habits make refunds faster:

  • Keep every purchase CFDI matched to a payment and to the return it was credited on.
  • Make sure suppliers are compliant. IVA paid to a supplier on the SAT's list of companies issuing fake invoices will be rejected.
  • File smaller, regular refund claims instead of one large claim after a year.
  • Answer SAT information requests completely and on time.

Can tourists get an IVA refund?

Mexico has a refund program for foreign tourists, who can request back the IVA paid on goods they take out of the country. The tax ombudsman, PRODECON, was promoting the program in June 2026, according to El Cronista. Purchases need proper invoices, there are minimum amounts, and the claim has to be made before leaving Mexico. Because the operating details change, check the current minimums and how to claim with the SAT or PRODECON before you travel.

Planning a manufacturing move to Mexico?

Start with a nearshoring roadmap: a cost comparison, supplier options and a realistic timeline.

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IVA on digital services from foreign providers

Since June 1, 2020, foreign companies that sell digital services to users in Mexico, such as streaming, apps, online software and digital platforms, must register with the SAT and charge 16% IVA, even if they have no office in the country. They file monthly and report their Mexican customers to the SAT.

Platforms that act as intermediaries, such as marketplaces and ride-hailing or delivery apps, have extra obligations. When they collect payments for individuals selling through them, they withhold part of the IVA and income tax and pay it to the SAT on the seller's behalf.

Recent changes to IVA in Mexico

Date Change
April 1, 2026 New SAT rules on digital platforms, including real-time access to platform transaction data, according to Kintsugi
December 31, 2025 Decree published extending the 8% border region IVA incentive through December 31, 2026
June 1, 2020 Foreign providers of digital services required to register and charge 16% IVA
January 1, 2015 IVA applied to temporary imports under IMMEX, with the IVA/IEPS certification credit available

The general 16% rate hasn't changed. Check this list again whenever the government publishes its annual tax package in the autumn.

¿Qué es el IVA en México? (Resumen en español)

El IVA (Impuesto al Valor Agregado) es el impuesto al consumo de México. La tasa general es del 16%. En las regiones fronterizas norte y sur, los contribuyentes que cumplen los requisitos aplican una tasa del 8% gracias a un decreto de estímulos fiscales vigente hasta el 31 de diciembre de 2026. Las exportaciones, la mayoría de los alimentos básicos y las medicinas de patente tienen tasa del 0%. Algunos bienes y servicios, como la renta de casa habitación, los servicios médicos y la educación, están exentos.

Las empresas cobran el IVA en sus ventas, acreditan el IVA que pagan en sus compras con un CFDI válido y presentan la declaración mensual a más tardar el día 17 del mes siguiente ante el SAT.

Frequently asked questions

What is IVA in Mexico?

IVA is Mexico's value added tax. Businesses charge it on most sales of goods and services, credit the IVA they pay on their own purchases, and pay the difference to the SAT every month.

What does IVA stand for?

Impuesto al Valor Agregado, which means "value added tax" in English.

What is the IVA rate in Mexico?

The general rate is 16%. Qualifying businesses in the northern and southern border regions charge 8%, and exports, most basic food and medicines are taxed at 0%.

Which areas of Mexico have an 8% IVA rate?

Municipalities in the northern border region, such as Tijuana, Mexicali, Ciudad Juárez, Nogales, Nuevo Laredo, Reynosa and Matamoros, and in the southern border region, such as Chetumal and Tapachula. The business must qualify and file a notice with the SAT, and the incentive currently runs through December 31, 2026.

What is the difference between 0% IVA and exempt?

Neither adds IVA to the price. A business selling at 0% can still recover the IVA it paid on its purchases. An exempt business can't, so that IVA becomes a cost.

Does Mexico have a sales tax?

Not a separate one. IVA works as Mexico's sales tax, at a single national rate. Some goods also carry IEPS, an excise tax, and hotels charge a state lodging tax.

How do I calculate IVA in Mexico?

Multiply the price before tax by 1.16. To find the IVA in a price that already includes it, divide the price by 1.16 and subtract the result from the original price.

Do I pay IVA on imports into Mexico?

Yes. Imports pay 16% IVA at customs, calculated on the customs value plus import duties. Registered businesses can credit it on their monthly return, and certified IMMEX companies receive a credit instead of paying cash.

Can exporters get IVA refunded?

Yes. Exports are taxed at 0%, so exporters usually build up IVA balances in their favor and can ask the SAT for a refund. The legal deadline is 40 business days from a complete application, though requests for information often extend it.

Can tourists get an IVA refund in Mexico?

There is a refund program for foreign tourists on goods taken out of the country, with minimum purchase amounts and invoice requirements. Check the current conditions with the SAT or PRODECON before you travel.

Do foreign companies have to charge IVA in Mexico?

Foreign companies selling digital services to users in Mexico must register and charge 16% IVA. Foreign companies selling goods into Mexico usually don't charge IVA themselves; the importer pays it at customs.

When is the monthly IVA return due?

By the 17th of the following month.

About Southward Advisors

Southward Advisors is a supply chain implementation firm that helps manufacturers move production from Asia to Mexico and other Latin American countries. Founded in 2016 by John Hyatt, the firm has offices in Charlotte, North Carolina, and Mexico City, and works with small and mid-sized companies as well as multinationals.

Southward works on the client's side rather than selling factory space. Its team finds and qualifies suppliers, compares costs and locations, sets up pilot production and helps new operations run efficiently, working alongside each client's tax and customs advisers on IVA, IMMEX and USMCA questions. Its three core services are:

Recent client results include a Midwest cabinet maker that saved more than $200,000 in tariffs, a Southeast consumer products manufacturer with tariff savings approaching $1 million a year, and a West Coast office furniture maker that saved about $3 million after moving production to Mexico. You can read the details in our case studies.

Southward Advisors is a member of the US-Mexico Chamber of Commerce, Holland House Mexico, the Irish-Mexican Chamber and the Mexico Strategic Sourcing Alliance, and has been featured on CBS News and Deutsche Welle.

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Major Industries in Mexico: A 2026 Guide to Sectors, Companies and Products

Quick answer: Mexico's major industries are manufacturing, services (retail, finance, telecoms and tourism), oil and gas, mining and agriculture. Manufacturing is the engine of its trade: factory goods made up 91.6% of the country's record $664.8 billion in exports in 2025. Within manufacturing, automotive is the largest sector, followed closely by electronics and food and beverages.

This guide covers the country of Mexico. If you're looking for the U.S. state, New Mexico's economy is a different subject.

Mexico at a glance

Indicator Figure Source
GDP (2024) About $1.85 trillion, roughly 12th in the world World Bank; IMF
Services share of GDP About 59% INEGI, via Tetakawi
Manufacturing share of GDP About 20% INEGI, via Tetakawi
Total exports (2025) $664.84 billion, a record INEGI, via Mexico Business News
Manufactured goods share of exports 91.6% INEGI
Share of exports going to the U.S. More than 80% INEGI
Light vehicles produced (2025) 3.95 million INEGI, via Latam Mobility

What are Mexico's major industries? The top 10 at a glance

People who ask about Mexico's "main industry" usually get one of two answers. Measured by share of the economy, services come first. Measured by what Mexico sells to the world, manufacturing dominates, and the automotive sector leads it. The table below ranks the ten industries that matter most, using the most recent full-year figures available.

# Industry Size indicator Main states Example companies
1 Automotive and auto parts About 21% of manufacturing GDP; 3.95M vehicles in 2025 Coahuila, Guanajuato, Nuevo León, Puebla, Aguascalientes General Motors, Nissan, Volkswagen, Toyota, Kia
2 Electronics About 17% of manufacturing GDP; about $107B in exports (2024) Chihuahua, Baja California, Nuevo León, Jalisco Foxconn, Jabil, Flex, Samsung, LG
3 Food and beverages About 18% of manufacturing GDP Jalisco, Estado de México, Nuevo León Grupo Bimbo, FEMSA, Gruma, Grupo Modelo
4 Retail and wholesale trade Largest single block within services Nationwide Walmart de México, OXXO, Soriana
5 Oil, gas and electricity Pemex was Mexico's largest company by sales in 2025 Campeche, Tabasco, Veracruz Pemex, CFE
6 Chemicals and plastics About 10% of manufacturing GDP Veracruz, Nuevo León, Estado de México Alpek, Orbia, Braskem Idesa
7 Medical devices About $19.3B in exports (2024) Baja California, Chihuahua, Jalisco Medtronic, Boston Scientific, Becton Dickinson
8 Mining and metals World's top silver producer Zacatecas, Sonora, Chihuahua, Durango Grupo México, Fresnillo, Ternium
9 Aerospace About $11.2B in exports (2025) Querétaro, Baja California, Chihuahua, Sonora Safran, Bombardier, Honeywell, GE Aerospace
10 Tourism One of the world's most visited countries Quintana Roo, Mexico City, Jalisco Grupo Posadas, international hotel chains

Manufacturing GDP shares are 2024 estimates from Tetakawi's GDP analysis, built on INEGI data. Export figures for electronics, medical devices and aerospace come from Tetakawi's 2026 sector guide, which cites Trade.gov, INEGI and FEMIA.

If you only need the top five, they are automotive, electronics, food and beverages, retail trade, and oil and energy.

Thinking about manufacturing in one of these industries?

Southward Advisors helps U.S. companies find, vet and manage Mexican suppliers in automotive, consumer goods, furniture, plastics, metal and more.

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What type of economy does Mexico have?

Mexico has a mixed, export-oriented market economy. Most of its output comes from services, but most of its foreign earnings come from factories, and that combination shapes everything else in this guide.

How Mexico makes money

Roughly 59% of GDP comes from services such as retail, finance, real estate, transport and tourism. Industry, which includes manufacturing, construction, mining and utilities, contributes about 32%. Agriculture, fishing and forestry together account for only around 4%, although Mexico remains a farm-export heavyweight in products like avocados, berries and tomatoes.

A few other income streams matter more than their GDP share suggests. Oil exports still brought in $21.25 billion in 2025, even after a 26.4% drop. Remittances from Mexicans working abroad, mostly in the U.S., are one of the country's largest sources of foreign currency. And tourism is a major employer along the Caribbean and Pacific coasts.

Is Mexico a secondary or tertiary economy?

Mexico is a tertiary, or service-led, economy by output, because services generate well over half of GDP. But it behaves like a manufacturing economy in trade. Few large economies depend as heavily on factory exports, and few are as tightly linked to one buyer: more than 80% of Mexico's exports go to the United States.

Mexico's key economic activities

  • Manufacturing: vehicles, electronics, appliances, medical devices, food and beverages.
  • Commerce and services: retail, wholesale, banking and telecommunications.
  • Energy: crude oil, natural gas and electricity, largely run by the state companies Pemex and CFE.
  • Mining: silver, copper, zinc, gold and lead.
  • Agriculture: avocados, tomatoes, berries, peppers, sugar and livestock.
  • Tourism: beach resorts, cultural tourism and business travel.

Mexico's manufacturing industry

Manufacturing produces about a fifth of Mexico's GDP and almost all of its exports. In 2025, factory goods accounted for 91.6% of total shipments abroad, and non-automotive manufacturing exports grew 17.3% even as automotive exports slipped 4.2%, according to INEGI.

Which industries have the most manufacturing in Mexico?

Three sectors make up more than half of manufacturing output:

Sector Approx. share of manufacturing GDP (2024)
Automotive and auto parts ~21%
Food and beverages ~18%
Electronics ~17%
Chemicals and petrochemicals ~10%
Medical devices ~5%
Aerospace ~3%
Textiles and apparel ~3%

The ranking changes depending on what you measure. Food and beverages is a large share of output but sells mostly at home. Electronics is slightly smaller by output but rivals automotive by export value, because so much of it is assembled in Mexico from imported components and shipped straight to the U.S.

What do U.S. companies manufacture in Mexico?

U.S. companies use Mexico mainly for products that are labor-intensive, bulky or time-sensitive, and that sell in North America. That includes cars and auto parts, TVs and computers, refrigerators and washing machines, air conditioners, medical instruments, aircraft components, furniture, cabinets, plastic parts and packaging. Many work through local suppliers or contract manufacturers in Mexico rather than building their own plants.

Why foreign manufacturers choose Mexico

The reasons are practical. Mexico shares a 2,000-mile border with the U.S., trucks can reach Texas in hours rather than weeks, and qualifying goods enter the U.S. duty-free under USMCA. The IMMEX program lets export manufacturers bring in materials without paying import taxes up front. Labor costs are competitive, and the country graduates a large number of engineers each year. Tariffs on Chinese goods have added a further push, which is why Mexico vs China has become a common boardroom comparison.

Mexico's major industries, sector by sector

Automotive and auto parts

Automotive is Mexico's largest manufacturing industry. The country produced 3,953,494 light vehicles in 2025 and exported 3,385,785 of them, 78.4% to the United States, according to INEGI data. Output dipped about 1% from 2024 as U.S. tariff uncertainty weighed on exports.

The industry runs in two belts. The northern belt covers Coahuila, Nuevo León, Sonora and Chihuahua. The Bajío belt covers Guanajuato, Aguascalientes, Querétaro and San Luis Potosí, with Puebla and Estado de México further south.

Major manufacturers: General Motors (Coahuila, Guanajuato, San Luis Potosí), Nissan (Aguascalientes), Volkswagen and Audi (Puebla), Toyota (Guanajuato, Baja California), BMW (San Luis Potosí), Kia (Nuevo León), Ford (Sonora, Estado de México), Mazda and Honda (Guanajuato) and Stellantis (Coahuila, Estado de México). Behind them sits a large parts base that includes Nemak, Bosch, Continental, Magna and Lear.

Electronics

Mexico is one of the world's largest electronics producers and the leading supplier of flat-screen TVs to the U.S. Electronics exports reached about $107 billion in 2024, 95% bound for the U.S. Chihuahua, Baja California, Nuevo León, Jalisco and Tamaulipas lead.

Guadalajara, sometimes called Mexico's Silicon Valley, is home to contract manufacturers such as Jabil, Flex and Sanmina. Foxconn, Samsung, LG and Sony also operate large plants. Server and data center hardware has become a fast-growing line.

Food and beverages

Food and drink is Mexico's second-largest manufacturing industry by output and serves a domestic market of more than 130 million people. It is also an export force: Mexico became the world's largest beer exporter, with more than $6 billion in 2025 shipments according to World's Top Exports. Tequila is the next-largest agri-food export.

Major companies: Grupo Bimbo (the world's largest bakery company), FEMSA and Arca Continental (Coca-Cola bottling), Grupo Modelo (owned by AB InBev), Heineken México, Gruma (Mission tortillas), Grupo Lala, Sigma Foods and José Cuervo.

Oil, gas and energy

Energy is shrinking as an export earner but remains central to the economy and public finances. Petróleos Mexicanos (Pemex) was Mexico's largest company by 2025 sales in Expansión's ranking, and the Comisión Federal de Electricidad (CFE) ranked fifth. Oil exports fell 26.4% to $21.25 billion in 2025 as output declined.

Most crude comes from offshore fields in the Gulf of Mexico off Campeche and Tabasco. For manufacturers, electricity supply and grid capacity have become a bigger concern than oil, especially in fast-growing industrial states.

Mining and steel

Mexico is the world's largest silver producer, with about 172.9 million ounces in 2025, roughly a fifth of global mine supply, according to the Silver Institute's World Silver Survey 2026. It is also a major producer of copper, zinc, lead and gold. Zacatecas, Chihuahua, Durango and Sonora are the main mining states.

Major companies: Grupo México (copper, through Southern Copper), Fresnillo and Peñoles (silver and gold, part of Grupo BAL), and Ternium and Deacero in steel.

Medical devices

Medical devices are one of Mexico's fastest-growing export industries, at about $19.3 billion in 2024, up from $11.7 billion in 2019. Baja California, centered on Tijuana, produces nearly a third of the sector's exports. Chihuahua and Jalisco follow.

Products range from catheters, surgical instruments and syringes to respiratory equipment and orthopedic implants. Medtronic, Boston Scientific, Becton Dickinson, Johnson & Johnson and Integer all run Mexican plants.

Aerospace

Mexico's aerospace exports reached about $11.2 billion in 2025, according to Tetakawi's summary of FEMIA data, with roughly 370 companies in the sector. Querétaro is the best-known cluster, alongside Baja California, Chihuahua, Sonora and Nuevo León.

Mexico builds engine parts, wiring harnesses, landing gear, fuselage sections and interiors rather than complete aircraft. Safran, Bombardier, Honeywell, GE Aerospace and Textron are among the main employers.

Appliances and HVAC

Mexico is one of the world's largest exporters of household appliances. Refrigerators, washing machines, stoves and air conditioners flow north from plants in Nuevo León, Guanajuato, Querétaro and Coahuila. Nuevo León alone holds about 41% of appliance production, and Mexico supplies a large share of the HVAC units sold in the U.S.

Major companies: Mabe (Mexico's own appliance maker), Whirlpool, LG, Samsung, Electrolux, Carrier, Lennox and Daikin.

Chemicals, plastics and packaging

Chemicals account for about a tenth of manufacturing output. The sector feeds almost every other industry with resins, packaging and components. Alpek (PET and polyester), Orbia (PVC and piping) and Braskem Idesa (polyethylene) are among the largest players. Thousands of smaller injection molders and packaging firms serve automotive, appliance and consumer goods customers.

Textiles, apparel and footwear

Textiles remain an important employer but a struggling exporter. Exports were about $7.3 billion in the first ten months of 2024 and fell roughly 15% in 2025, and many plants are running well below capacity, according to Tetakawi. Puebla, Estado de México, Jalisco and Coahuila (around Torreón, for denim) are the main hubs, and León in Guanajuato is the center of the footwear industry.

Furniture and building products

Mexico exported about $12.7 billion of furniture, according to Tetakawi, with Jalisco and Estado de México leading production. U.S. buyers have turned to Mexican plants to avoid Section 301 tariffs on Chinese furniture and cabinets. One Southward client, a Midwest cabinet maker, saved more than $200,000 in tariffs by moving sourcing from China to a supplier in Guanajuato. Cemex, one of the world's largest cement companies, and Vitro, a glass maker, anchor the building materials side.

Agriculture

Agriculture is small as a share of GDP but large in world markets. Mexico is the world's leading avocado exporter: shipments hit a record $3.78 billion in 2024 and were projected at about $4 billion for 2025, according to USDA figures, and Mexico supplied about 88% of U.S. avocado imports. It is also a top exporter of tomatoes, berries, peppers and limes. Michoacán, Jalisco, Sinaloa and Sonora are the main farm states.

Services, tourism and finance

Services produce most of Mexico's GDP. Retail is led by Walmart de México, the country's second-largest company by sales, and FEMSA's OXXO convenience stores. América Móvil, owner of Telcel, dominates telecommunications. BBVA México and Banorte lead banking. Tourism is concentrated in Quintana Roo (Cancún and the Riviera Maya), Mexico City, Jalisco (Puerto Vallarta) and Baja California Sur (Los Cabos).

Largest companies in Mexico

Biggest companies in Mexico by revenue

The ten largest companies in Mexico had combined 2025 sales of just over 7.5 trillion pesos, about 28.6% of the total for the country's 500 biggest firms, according to Expansión's 2026 ranking.

Rank Company Sector 2025 sales (million pesos)
1 Pemex Oil and gas 1,528,539
2 Walmart de México y Centroamérica Retail 1,011,598
3 América Móvil Telecommunications 943,638
4 FEMSA Retail, beverages and logistics 840,954
5 CFE Electricity 679,463
6 General Motors de México Automotive 646,000
7 BBVA México Banking 538,114
8 Grupo Financiero Banorte Banking 521,729
9 Grupo Bimbo Food 426,952
10 Grupo BAL Conglomerate (mining, insurance, retail) 375,478

Source: Expansión, "Las 500 empresas más importantes de México 2026".

The list says a lot about how the economy works. Two of the top five are state-owned energy companies. Three are retail or consumer businesses serving the domestic market. Only one, General Motors, is a pure manufacturer, and it is foreign-owned.

Major manufacturing companies in Mexico

The table below lists large manufacturers by sector, with headquarters country and the states where they make the most.

Company Sector HQ country Main Mexican states What they make
General Motors Automotive U.S. Coahuila, Guanajuato, San Luis Potosí Pickups, SUVs, engines
Nissan Automotive Japan Aguascalientes, Morelos Passenger cars
Volkswagen Automotive Germany Puebla Cars and SUVs
Toyota Automotive Japan Guanajuato, Baja California Pickups
Kia Automotive South Korea Nuevo León Passenger cars
Nemak Auto parts Mexico Nuevo León, Coahuila Aluminum engine and EV components
Foxconn Electronics Taiwan Chihuahua, Jalisco Servers, computers, TVs
Jabil Electronics U.S. Jalisco, Chihuahua Contract electronics
Samsung Electronics, appliances South Korea Baja California, Querétaro TVs, refrigerators, washers
LG Electronics Electronics, appliances South Korea Nuevo León, Tamaulipas, Baja California TVs, appliances
Mabe Appliances Mexico Querétaro, Guanajuato, San Luis Potosí Refrigerators, stoves, washers
Whirlpool Appliances U.S. Nuevo León, Guanajuato Refrigerators, washers
Carrier HVAC U.S. Nuevo León Air conditioners
Medtronic Medical devices Ireland/U.S. Baja California Surgical and cardiac products
Boston Scientific Medical devices U.S. Baja California Catheters, stents
Safran Aerospace France Querétaro, Chihuahua, Sonora Engine parts, wiring
Bombardier Aerospace Canada Querétaro Aerostructures, harnesses
Grupo Bimbo Food Mexico Nationwide Bread, baked goods
Grupo Modelo Beverages Belgium (AB InBev) Zacatecas, Sonora, Yucatán Beer
Cemex Building materials Mexico Nationwide Cement, concrete
Ternium Steel Luxembourg Nuevo León, Coahuila, Colima Flat steel
Alpek Chemicals Mexico Nuevo León, Veracruz PET, polyester

Thousands of mid-sized suppliers sit behind these names, and they are often where small and mid-sized buyers find the best fit. Finding them usually takes on-the-ground sourcing, because many good Mexican manufacturers have little online presence.

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Well-known Mexican brands

Some Mexican companies have become household names abroad: Corona and Modelo beers (now owned by AB InBev), José Cuervo tequila, Bimbo and its U.S. brands such as Sara Lee bread, Gruma's Mission tortillas, Telcel, OXXO and Cemex. Grupo Lala, Jumex juices and Mabe appliances are big in Latin America.

What is Mexico known for producing?

Mexico is known for vehicles, electronics, beer, tequila, avocados and silver. The table lists products where Mexico ranks among the world's leaders.

Product Mexico's position Main producing states Source
Silver World's largest producer, about 172.9M oz in 2025 Zacatecas, Chihuahua, Durango Silver Institute
Beer World's largest exporter, more than $6B in 2025 Zacatecas, Sonora, Jalisco World's Top Exports
Avocados World's largest exporter, about $4B projected for 2025 Michoacán, Jalisco USDA
Tequila Sole producer by law (protected designation of origin) Jalisco Tequila Regulatory Council
Light vehicles 3.95M produced in 2025; 3.39M exported Coahuila, Guanajuato, Puebla INEGI
Electronics About $107B exported in 2024 Chihuahua, Baja California Tetakawi
Medical devices About $19.3B exported in 2024 Baja California Tetakawi

What is Mexico the world's leading producer of?

Silver. Mexico has been the world's top silver producer for years and mined about a fifth of global supply in 2025, even after three straight years of falling output. It is also the leading exporter of beer and avocados, and the only legal producer of tequila and mezcal.

What natural resources does Mexico have?

Mexico's main natural resources are oil and natural gas in the Gulf of Mexico, metals (silver, copper, gold, zinc, lead and fluorspar), fertile farmland in the central and western states, timber, fisheries on two coasts, and strong solar potential in the north. Water is the scarce one. Drought in northern industrial states is now a real constraint on factory growth.

Where are Mexico's manufacturing areas?

Mexican manufacturing clusters in three regions. Each has a different mix of industries and costs, which is why site selection matters as much as choosing a supplier.

Region States Main industries Anchor companies
Northern border Baja California, Sonora, Chihuahua, Coahuila, Nuevo León, Tamaulipas Electronics, medical devices, automotive, appliances, HVAC, aerospace Foxconn, Medtronic, GM, Kia, Whirlpool, Carrier
Bajío Guanajuato, Querétaro, Aguascalientes, San Luis Potosí, Jalisco Automotive, aerospace, electronics, appliances, food, footwear Toyota, Mazda, Nissan, BMW, Safran, Jabil, Mabe
Central Estado de México, Mexico City, Puebla, Hidalgo, Tlaxcala Automotive, textiles, consumer goods, food, chemicals, furniture Volkswagen, Audi, Grupo Bimbo, Kimberly-Clark de México

Monterrey is the industrial capital of the north, with steel, glass, cement and appliance makers alongside newer automotive suppliers. Tijuana and Ciudad Juárez are the traditional maquiladora cities on the border. Querétaro and Guanajuato have grown fastest over the past decade. Our guide to the best manufacturing cities in Mexico compares them in more detail.

Industrial parks in Mexico

Most foreign plants sit inside industrial parks, which offer ready-built or build-to-suit buildings, utilities, security and, often, customs support. Parks are concentrated around Monterrey, Saltillo, Ciudad Juárez, Tijuana, Querétaro, León, Silao, San Luis Potosí and Aguascalientes. Rents and vacancy vary widely by market, so compare several before you commit.

Not sure which region fits your product?

We compare labor, logistics, supplier depth and costs across Mexican regions before you commit to a location.

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Trends shaping Mexico's industries in 2026

  • Nearshoring keeps growing, unevenly. Non-automotive manufacturing exports rose 17.3% in 2025 while automotive exports fell 4.2%. Electronics, data center hardware, medical devices and appliances are carrying the growth.
  • Automotive is waiting on trade policy. Vehicle output slipped about 1% in 2025 amid U.S. tariff uncertainty, and the formal USMCA review under way in 2026 will shape the next round of investment decisions.
  • EVs and batteries are arriving slowly. Several automakers have announced EV programs in Mexico, but most investment is still in conventional vehicles and components that can serve both.
  • Energy and water are the bottlenecks. Grid capacity, permitting for new power supply and water availability in the north are now common reasons projects pick one state over another.
  • Textiles and apparel are shrinking. Exports fell about 15% in 2025 as Asian competition and weaker U.S. demand hit the sector.
  • Oil is in long decline. Lower output and prices cut oil exports by more than a quarter in 2025, so manufacturing's share of export earnings keeps rising.

Jobs in Mexico's main industries

The most common jobs in Mexico are in retail and commerce, manufacturing, agriculture, construction, transport and hospitality. Manufacturing employs millions, from production operators and machine technicians to quality inspectors and engineers, with the highest concentration in the border states and the Bajío. A large share of Mexican workers are in the informal economy, especially in agriculture and small-scale commerce.

How to manufacture or source in Mexico

Most companies don't start by building a factory. There are four common ways in, and the right one depends on volume, control and how much capital you want to commit.

Model How it works Upfront cost Time to first production Control
Supplier-based sourcing You buy from an existing Mexican manufacturer Lowest Weeks to a few months Lower
Contract manufacturing A Mexican contract manufacturer builds to your design Low to moderate A few months Moderate
Shelter company You run production inside a shelter provider's legal entity Moderate A few months High
Own plant You set up your own entity and facility Highest Often a year or more Full

A practical sequence looks like this:

  1. Feasibility. Compare your current landed cost with a realistic Mexico estimate, including freight, duties, labor and ramp-up. Our cost breakdown lists what to include.
  2. Supplier or site search. Shortlist suppliers or locations that already serve your industry.
  3. Factory audit. Visit and audit each factory before you send a PO.
  4. Pilot. Run a controlled first order alongside your current source.
  5. Scale. Expand with the supplier, or move to a larger model once the numbers are proven.

This is the approach Southward Advisors takes with clients. For the cabinet maker mentioned earlier, several rounds of bidding and factory visits led to a Guanajuato supplier that could compete with Chinese pricing, and the client saved more than $200,000 in tariffs. If you're weighing a move, our Mexico nearshoring and sourcing service covers each step, and our process improvement consulting helps new operations stabilize once production starts.

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Frequently asked questions

What is the main industry in Mexico?

By share of GDP, services are Mexico's largest sector at about 59%. By exports and industrial output, manufacturing is the main industry, and automotive is its largest single sector.

What are the top 5 industries in Mexico?

Automotive, electronics, food and beverages, retail trade, and oil and energy. Medical devices, aerospace and mining follow.

What is Mexico's biggest industry by exports?

Manufacturing, which made up 91.6% of Mexico's $664.8 billion in exports in 2025. Automotive and electronics are the two largest export sectors, each worth around $100 billion a year.

What is manufactured in Mexico?

Cars, trucks and auto parts, TVs, computers and servers, refrigerators and washing machines, air conditioners, medical devices, aircraft parts, beer and processed foods, furniture, steel, cement and plastics.

What do U.S. companies manufacture in Mexico?

Mostly products sold in North America that benefit from short shipping times: vehicles and parts, electronics, appliances, medical devices, aerospace components, furniture and consumer goods.

What is Mexico known for producing?

Vehicles, electronics, silver, beer, tequila and avocados.

What is Mexico the world's leading producer of?

Silver. Mexico mined about 172.9 million ounces in 2025, roughly a fifth of world supply.

What are the largest companies in Mexico?

By 2025 sales, Pemex, Walmart de México, América Móvil, FEMSA and CFE, according to Expansión.

What type of economy does Mexico have?

A mixed, export-oriented market economy. Services generate most output, while manufacturing generates most exports.

How does Mexico make money?

Mainly through services and domestic commerce, manufactured exports to the U.S., oil, remittances from workers abroad, tourism and agricultural exports.

Where are most factories in Mexico?

In the northern border states (Nuevo León, Coahuila, Chihuahua, Baja California, Sonora, Tamaulipas) and the Bajío (Guanajuato, Querétaro, Aguascalientes, San Luis Potosí, Jalisco), plus Puebla and Estado de México.

Can a U.S. company start manufacturing in Mexico?

Yes. Many start by sourcing from an existing Mexican supplier or contract manufacturer, then move to a shelter arrangement or their own plant as volumes grow. Our Mexico factory setup guide covers the steps.

About Southward Advisors

Southward Advisors is a supply chain implementation firm that helps manufacturers move production from Asia to Mexico and other Latin American countries. Founded in 2016 by John Hyatt, the firm has offices in Charlotte, North Carolina, and Mexico City, and works with small and mid-sized companies as well as multinationals.

Rather than selling factory space, Southward works on the client's side: finding and qualifying suppliers, comparing costs, setting up pilot production and helping new operations run efficiently. Its three core services are:

Recent client results include a Midwest cabinet maker that saved more than $200,000 in tariffs, a Southeast consumer products manufacturer with tariff savings approaching $1 million a year, and a West Coast office furniture maker that saved about $3 million after moving production to Mexico. You can read the details in our case studies.

Southward Advisors is a member of the US-Mexico Chamber of Commerce, Holland House Mexico, the Irish-Mexican Chamber and the Mexico Strategic Sourcing Alliance, and has been featured on CBS News and Deutsche Welle.

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