Choosing the right city to open a business in Mexico is crucial to a successful business strategy.
Having a good idea and a quality product or service is essential for starting a business, but location is just as important. It determines customer flow, pricing, and the enterprise’s success. Opening a business in Mexico can vary significantly by region due to differences in regional procedures, costs, infrastructure, and industries. According to the Ministry of Economy (SE), the time required for business setup procedures ranges between 20 and 45 days, depending on the state, with average costs ranging from 3,000 to 5,000 pesos.
“The success of a venture goes beyond a good idea. Factors like location, infrastructure, and the fastest-growing economic sectors are key pieces every entrepreneur should thoroughly analyze before leaping,” said Alejandro Sena, CEO of DineroMx, a financial information platform.
The SE also highlights that average wages play an essential role, as regional wage disparities can reach up to 50%, significantly impacting operational costs when planning to open a business in Mexico.
What Sectors Do Entrepreneurs Invest In?
According to the Mexican Entrepreneurs Association, retail is the primary sector in which Mexicans choose to invest, followed by consulting, gastronomy, and IT.
However, the Mexican Institute for Competitiveness (IMCO) emphasizes that industries such as technology and software development, manufacturing, logistics, tourism, and the creative economy stand out for their high growth potential in various country regions.
This growth is driven by digitalization and automation, proximity to international markets, tourist attractions, and cultural heritage.
“This year, entrepreneurs must also consider sectors offering the highest probability of success. Doing so will make identifying opportunities with reduced operating costs easier,” adds Alejandro Sena.
Why Is Location Important?
Choosing the right city to open a business in Mexico is vital to a business strategy. For example, in cities like Monterrey, Guadalajara, and Querétaro, the average office rental cost is significantly lower than in Mexico City, translating into substantial savings.
Moreover, according to DineroMx’s analysis of the Urban Competitiveness Index 2024 by IMCO, access to markets and resources also varies by region. While major urban centers offer closer proximity to potential customers and business networks, they also have higher living and operational costs. In contrast, intermediate cities provide an attractive balance: modern infrastructure, local tax incentives, and a growing consumer base.
Another critical factor to consider is connectivity. Cities with better transportation networks and access to ports have a significant competitive advantage for businesses in the manufacturing and logistics sectors.
“Geographically, the central region of the country, which includes states like Mexico City, the State of Mexico, Guanajuato, Hidalgo, Morelos, Puebla, and Querétaro, accounts for 70% of sales from the country’s largest companies. Meanwhile, Mexico City remains the main hub for innovation and entrepreneurship, hosting 45% of the nation’s entrepreneurs,” Sena concludes.
Ranking of Mexican Cities to Open a Business
If you’re considering starting a business in 2025, identifying the best cities to open a business in Mexico is crucial, as each region’s infrastructure and market demand play a fundamental role in a venture’s success.
Based on the Urban Competitiveness Index 2024 by IMCO, DineroMx has compiled a list of the 10 cities offering favorable conditions for small and medium-sized enterprises (SMEs), combining affordable costs with business-friendly environments.
- Mexico City
The capital of Mexico’s economic and political epicenter accounts for a large portion of the national GDP, making it a broad and diverse market despite high rental costs. It offers access to a highly skilled workforce and business support networks, including incubators and accelerators.
- Monterrey
Known as Mexico’s industrial capital, Monterrey combines a well-established business culture with advanced infrastructure. Its streamlined regulatory processes and access to financing, including venture capital funds, make it attractive for entrepreneurs. Monterrey also boasts a robust ecosystem for tech startups.
- Guadalajara
Dubbed the “Mexican Silicon Valley,” Guadalajara leads the tech sector with an innovative ecosystem supported by collaboration between universities, businesses, and government. The city offers competitive costs for coworking services and access to specialized IT talent.
- Hermosillo
Hermosillo features affordable commercial rental costs, a strategic location, and a booming industrial sector. Its excellent land and air connectivity enables businesses to reach new markets and expand their horizons.
- Chihuahua
With competitive energy and labor costs, a diversified economy, and its status as a major industrial hub in the north, Chihuahua is a strategic destination for ventures in technology, commerce, and advanced manufacturing.
- Saltillo
Economic stability and proximity to the U.S. border make Saltillo a hotspot for entrepreneurs. Its strong industrial base, particularly in the automotive sector, provides an environment conducive to developing and expanding new businesses.
- Querétaro
Located in the Bajío region, Querétaro stands out for its excellent highway and air connectivity and first-class infrastructure. It hosts thriving aerospace, technology, and automotive industries, creating supply chain opportunities for small businesses.
- La Paz
Despite its distance from major urban centers, La Paz offers low operational costs for tourism-related businesses. Its growing popularity as a tourist destination has spurred the development of ventures in hospitality, gastronomy, and recreational activities.
- Mérida
Known for being a safe city with reasonable living costs and suitable infrastructure for SMEs, Mérida offers a high quality of life and economic dynamism, making it an ideal place to open a business in Mexico.
- San Luis Potosí
San Luis Potosí has become a key logistics hub due to its central location. It features modern industrial parks and moderate operating costs, facilitating the establishment of small and medium-sized enterprises.
What Makes a City Affordable for Business Ventures?
An affordable city in Mexico to open a business balances operational costs, infrastructure, regulatory procedures, and fiscal support. These are key points to consider:
Ease of Doing Business: Simplified regulatory procedures reduce time and initial costs for setting up companies.
Tax Incentives: Some cities offer tax exemptions or reductions for new businesses.
Access to Financing: While venture capital funds are concentrated in developed cities, programs like Nacional Financiera (NAFIN) and Fondo para el Desarrollo Social (FONDESO) are expanding to underserved regions, facilitating loans for entrepreneurs.
Affordable Real Estate: Competitive office and industrial land rental prices help reduce expenses.
Efficient Infrastructure: Reliable electricity, modern road networks, and functional airports ensure smooth operations and long-term competitiveness.
Technological Infrastructure: High-speed internet and coworking spaces are crucial for digital ventures.
Quality of Life and Labor Costs: Cities with lower living costs enable entrepreneurs to maintain competitive labor expenses without compromising talent quality.
Availability of Human Capital: The presence of universities and technical training centers ensures a steady supply of qualified professionals.
In conclusion, choosing the correct city to open a business in Mexico is a pivotal decision that can significantly influence the success of any venture. Factors such as infrastructure, connectivity, operational costs, and access to talent vary widely across the country, making cities like Mexico City, Monterrey, and Guadalajara standout options for businesses seeking robust markets and advanced ecosystems. Meanwhile, cities like Mérida, La Paz, and San Luis Potosí offer affordable alternatives with unique advantages, from safety and quality of life to strategic logistics capabilities. Entrepreneurs should carefully evaluate each city’s economic strengths, cost-effectiveness, and sector-specific opportunities to align their business goals with the region that offers the best conditions for growth and sustainability.