When we speak about business in Mexico, we usually think about the legal, financial, fiscal or tax issues, but not always about accounting. However, in order to establish and operate a successful business one needs to take accounting into consideration.
Mexican Accounting Standards
A couple of years ago Mexico had its own accounting standards (based on and translated from other country standards). Nowadays, with foreign investment, Mexico has needed to standardize their NIF’s (Normas de Información Financiera) to international levels by using the IFRS (International Accounting Reporting Standards), turning them into NIIF’s (Normas Internacionales de Información Financiera). Individuals and businesses operating in Mexico should become familiar with these as knowledge on the IFRS is important as a means of resolving legal and fiscal issues.
This transition has had, in general, a good impact on economic entities in terms of information and decision-making. This has encouraged both local and international investment in Mexico. Some examples of the positive impacts can be seen below:
- Easier decision making for users of financial information, investors, analysts and regulators.
- The comparability of information has improved. The whole world can communicate in the same financial and accounting language.
- Multi-national entities have a more accurate explanation of financial statements and information.
This reform provides many benefits. Furthermore, it is widely expected that within 3 to 5 years there will be a global standardization of financial information. This will increase the pressure on the state and corporations to build credibility and trust of financial information on a global level.
Navigating Mexico’s Tax and Legal Compliance Standards
Mexico is a country full of opportunity and is very open to the prospect of foreign business and trade. Understanding the legalities prior to designing your business plan will create the foundation for a smoother market entry.
If you would like more information on doing business in Mexico, Biz Latin Hub has a group of experts that can offer you guidance for your business in Mexico.
We offer professional accounting, legal, and financial services tailored to you and your company’s needs. Contact us today to find out more about how we can support you doing business.
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