MEXICO: An Introduction to General Business Law: Monterrey
Monterrey continues to consolidate its position as one of Mexico's main economic and industrial centres. Its strategic position, coupled with a dynamic and robust business environment, has positioned it as a key destination for both national and international investment, fostering an ecosystem conducive to business creation and job generation.
According to official information released by the State Government, during the year 2024, Nuevo León –the State of which Monterrey is capital– was the entity that contributed the most to the national economy with 27.5% of the growth of the country's economic activity, securing the first position among all 32 Mexican states. Within the current global landscape —marked by the nearshoring boom, sweeping judicial reforms, and the evolution of foreign trade—, Monterrey has demonstrated a remarkable capacity for adaptation, strengthening its role as one of the most attractive cities in the country for industry and as a strategic business hub in the region.
Currently undergoing a significant phase of expansion, Monterrey is also distinguished by its efforts to enhance urban mobility. One noteworthy initiative is the ongoing construction of Line 6 of the Metrorail, which will connect Monterrey with the surrounding municipalities of Guadalupe, San Nicolás and Apodaca. This project is expected to benefit more than 120,000 daily users, many of whom commute across the state for work purposes, thereby improving connectivity and supporting regional economic integration.
Monterrey and Nearshoring in the Current Political Environment
The nearshoring phenomenon has significantly accelerated Monterrey's economic development, driving a growing demand for specialised talent in sectors such as advanced manufacturing, technology and engineering.
This dynamism has led to an unprecedented internal labour migration. Official data reveals that, as of March 2025, 1.95 million workers were registered with the Mexican Social Security Institute (IMSS) in Nuevo León, with large and medium-sized companies generating more than 73% of the state's formal employment. This, in the context of the relocation of production chains at the international level, consolidates the State as a national reference in labour stability and formality.
However, the region now faces potential external challenges. Ongoing discussions regarding the imposition of new tariffs by the United States on Mexican goods represent a latent risk for Monterrey’s manufacturing industry. Companies such as Hyundai announced that they will move their production from Mexico (particularly from Pesquería, Nuevo León) to the United States in order to avoid the anticipated 25% tariffs on auto parts stated for implementation by May 3 of this year under President Trump administration’s proposed trade measures.
This evolving trade environment poses a strategic challenge for Nuevo León, as it must continue to generate the necessary legal and economic certainty to remain an attractive destination for foreign direct investment. Nevertheless, the nearshoring phenomenon is expected to provide a strategic counterweight by reinforcing the regional integration of supply chains and consolidating Mexico's position as an important commercial partner for the United States. Reflecting this optimistic outlook, the State Government recently announced significant new investments by multinational companies such as LEGO, Volvo and Unilever, which are set to make multi-million-dollar investments in the installation of plants in Nuevo León, as well as the generation of 10,000 new jobs. These developments project Nuevo León as a beacon of economic strength and stability in the global arena.
Evolution of Commercial Arbitration and Judicial Reform
The International Court of Arbitration ICC positions Mexico as the first nation in Latin America with the highest number of arbitrations, with 111 proceedings by the year 2023, reaching the second place in the world ranking, along with Germany.
Given the increasing complexity of commercial relations, together with the package of legislative reforms of the Mexican judiciary system, it is essential that companies operating in Mexico assess their options in terms of dispute resolution. In this regard, commercial and investment arbitration are increasingly consolidated as vital tools to mitigate risks and provide legal certainty.
It is becoming increasingly common for parties to agree to arbitration clauses in contracts, particularly when they involve foreign companies. For this reason, it is expected that the promotion of arbitration as a method of dispute resolution will continue to emerge as an attractive option for parties involved in complex or high economic value contracts, instead of resorting to domestic courts. The strengthening of the regulatory framework, including the recent development of the General Law of Alternative Dispute Resolution Mechanisms, published in the Official Gazette of the Federation on 26 January 2024, reflects the country's commitment to agile and effective dispute resolution methods for the protection of investors' interests.
Due to its efficiency in dispute resolution, the eligibility of arbitrators according to their experience and expertise in the disputed matter, its confidential nature, and the international enforceability of the awards issued in them, arbitration offers significant advantages. These attributes have become even more relevant in the context of the ongoing judicial reform in Mexico, which anticipates complex elections of judges, magistrates, and Supreme Court justices throughout the country by June 2025.
Conclusion
Monterrey remains a key player in the business landscape of Mexico and Latin America, standing out for its resilience, competitiveness and ability to adapt to a dynamic global environment. The combination of nearshoring, the continuous investment in infrastructure, and the strengthening of a culture benefiting alternative dispute resolution mechanisms consolidate Monterrey as a privileged destination for foreign investment and business development.
Nonetheless, Monterrey's accelerated industrial growth poses significant challenges particularly in relation to urban mobility, housing, and sustainable infrastructure. Addressing these challenges requires sustained investment in essential public infrastructure such as energy, water, mobility and transportation. Additionally, there must be ongoing efforts to strengthen the rule of law and promote the integration of other regions and states, ensuring that Nuevo León continues to be perceived as an attractive and competitive location for investors. Through these strategic efforts, Monterrey will maintain its position in the regional and international market as a benchmark of business opportunity and economic prosperity.