Nearshoring: financing a new plant's supply chain

Written By Shrinivas G
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Mexico Trade Corridor · Corridor guide · E. Mexico's finance landscape

Mexico drew a record US$40.9 billion of foreign direct investment in 2025, but most of it was profit reinvested by companies already there, and new investment fell in the first half of 2026. This guide sets out the numbers, the rules that apply to a new plant and where its supply chain needs cash.

Published October 23, 2026 · Facts as of October 23, 2026 · 11 min read · Sources listed at the end · Rules as of October 23, 2026

Facts as of October 23, 2026. This page states the facts as they stood on that date. Tariffs, rules and figures may have changed since publication. Tariffs and trade policy change often, so we review these pages every month and update them.

US$40.9bnForeign direct investment in Mexico in 2025, a record, up 10.8%; 67.7% was reinvested earnings 1
US$34.97bnFDI in the first half of 2026, preliminary, down 7.9% on the revised 2025 series 3
-23.1%Change in new investment in the first half of 2026 on the revised series; 7.8% of the total 3
6.9%Industrial vacancy in Monterrey in Q1 2026, up from 5.1% a year earlier (CBRE) 5

What is it?

Nearshoring means moving production close to the US market. Mexico's economy ministry, the Secretaría de Economía, reported US$40.9 billion of foreign direct investment (FDI) in 2025. UNCTAD ranked Mexico 10th in the world for FDI in 2025 1,2.

Why does it matter?

The pace has slowed. FDI in the first half of 2026 was 7.9% lower than a year earlier on the revised series, and new investment was 23.1% lower 3. Vacancy in northern industrial markets has risen, and developers and tenants are waiting for the USMCA review 4,5.

How does it work?

A new plant needs land or a building, imported equipment, local suppliers and working capital until its first customers pay. In auto parts, payment comes 60 to 90 days after delivery 6. Each stage has its own finance option, and tariffs decide part of the cost.

01How much foreign investment is reaching Mexico?

Mexico's economy ministry reported US$40.871 billion of FDI in 2025, a record and 10.8% more than in 2024 1. UNCTAD's World Investment Report 2026 ranked Mexico 10th in the world, with about US$41 billion, and called it the main beneficiary of nearshoring-related FDI in manufacturing 2.

New investment, the money that builds new plants or buys new companies, was US$7.378 billion in 2025, or 18.1% of the total. Reinvested earnings, the profits that companies already in Mexico keep there, were US$27.650 billion, or 67.7%. Transfers between companies in the same group made up the rest, US$5.844 billion 1. The net flow in the fourth quarter of 2025 was negative, at US$5.026 billion; the ministry says this reflected reinvestment, and not cancelled projects 1.

The United States was the largest source of FDI in 2025, with 38.8%, followed by Spain with 10.8% and Canada with 8.1% 1.

Compare

Foreign direct investment in Mexico by type

US$ million and share of total. 2025 full year; first half of 2026 preliminary, change on the revised 2025 series. Sources: Secretaría de Economía via El Financiero and Grupo Financiero BASE 1,3.
Type2025, full yearH1 2026, preliminary
Total FDI40,871 (up 10.8%) 134,968 (down 7.9%) 3
New investment7,378 (18.1%) 12,736 (7.8%; down 23.1%) 3
Reinvested earnings27,650 (67.7%) 188.5% of total 3
Intercompany accounts5,844 (14.3%) 1Not stated in the source

02Is nearshoring slowing down?

Yes, on the latest figures. Preliminary ministry data for the first half of 2026, compiled by Grupo Financiero BASE, show US$34.968 billion of FDI. That is 7.9% less than the same period of 2025 on the revised series 3. New investment fell 23.1% to US$2.736 billion, only 7.8% of the total. Reinvested earnings made up 88.5% 3.

The property market shows the same trend. Expansión reports that vacancy in the main northern industrial markets rose from 1% in 2023 to 7% in 2025. It cites a count by Columbia University's Milstein Center of more than 64,000 manufacturing jobs lost in Ciudad Juárez from 2023 to 2025, and says developers and tenants are waiting for the USMCA review 4. In Monterrey, CBRE put vacancy at 6.9% in the first quarter of 2026, up from 5.1% a year earlier. About 92% of the 404,000 square meters under construction had no tenant, and 145,000 square meters were offered for sublease 5.

Demand continues at a slower pace. Net absorption in Monterrey was 212,000 square meters in the quarter, up from 131,000 a year earlier 5. The developer Grupo Amistad projected availability above 10% in Monterrey, Chihuahua and Ciudad Juárez, and a smaller second wave of nearshoring; these are a developer's projections 7. UNCTAD warned that US tariffs on steel, aluminum and autos push investment away from Mexico and delay some projects 2.

In Monterrey, about 92% of the industrial space under construction in early 2026 had no tenant, according to CBRE.

03How is a new plant built and supplied?

A plant usually starts in an industrial park. The company buys land or leases a building. CBRE reports that rents in Monterrey held steady at US$7.00 per square meter a month in early 2026 5.

The equipment comes next. Machines imported from the US enter under Mexican import rules, and duty and VAT can apply. Since January 1, 2026, Mexico has charged tariffs of 5% to 50% on 1,463 tariff lines from countries without a trade agreement with Mexico 17. That raises the cost of capital goods from those countries. Programs such as IMMEX defer duties and VAT on temporary imports, and our guide to landed cost covers the import taxes.

Then the plant builds its supplier base. Tier 2 and tier 3 suppliers, often small firms, must buy tools and materials and hire staff before series production starts. No public source gives typical timing for tooling payments. Our guide to finance for tier 1 and tier 2 suppliers covers the auto supply chain.

  1. Land and buildingThe company buys land or leases a building in an industrial park. Monterrey rents were US$7.00 per square meter a month in Q1 2026 5.
  2. Equipment importsMachines enter under Mexican import rules. Duty and VAT can apply unless a program such as IMMEX defers them.
  3. Local suppliersTier 2 and tier 3 suppliers buy tools and materials and hire staff before series production.
  4. Start-upThe plant funds materials, payroll and stock until its first customers pay, 60 to 90 days later in auto parts 6.
  5. First exportsGoods cross to the US with a USMCA claim where they qualify, or pay the duty that applies to the tariff line.

04Which rules and tariffs apply to a new plant?

The plant's exports to the US decide most of its tariff cost. Goods that meet the USMCA rules of origin keep their preferential treatment, so the plant's sourcing plan matters from day one. Our guide to USMCA rules of origin explains the certificate.

USMCA stays in force, with annual joint reviews since the US declined to extend it on July 1, 2026 15. Reported US requests include regional value content near 82% and a 50% US-content rule.

Section 232 duties apply on top for listed goods. Vehicles and auto parts pay 25%, with USMCA-qualifying parts exempt until the US Commerce Department sets a process to tax their non-US content 12. Under Proclamation 11032, steel, aluminum and copper articles in Annex I-A pay 50%, derivatives in Annex I-B pay 25%, and industrial machinery in Annex I-C and items in Annex III pay 15%. USMCA-qualifying Annex I-C goods from Mexico pay 25% on their non-US content only, with a minimum effective duty of 15% 13. Check each tariff line against the annexes. Rates are as of October 23, 2026; the corridor watch keeps the live list.

Rules in force
As of October 23, 2026. Live list: corridor watch.
MeasureWhat it doesSinceStatus
USMCAStays in force; the US did not agree to extend it, so annual joint reviews run until 2036 unless extended 15Jul 1, 2026Annual review
US Section 232, vehicles and auto parts25% on vehicles and listed parts. USMCA-qualifying parts exempt until Commerce sets a process to tax non-US content 12Apr 3, 2025 (parts May 3, 2025)In force
US Section 232, steel, aluminum and copper50% (Annex I-A), 25% (Annex I-B) or 15% (Annex I-C and Annex III), under Proclamation 11032. USMCA Annex I-C goods: 25% on non-US content, 15% minimum 13Jun 8, 2026In force
US Section 301, forced labor10% on Mexican goods. Exempt with a USMCA claim; goods under Section 232 excluded 14Jul 24, 2026In force
Mexico tariffs on non-agreement countries5% to 50% on 1,463 tariff lines from countries without a trade agreement with Mexico 17Jan 1, 2026In force
Mexico duty exemption, tariff line 9803.00.01Exemption for parts imported by automakers changed; implementing guidelines not yet issued 16Oct 14, 2026Guidelines pending
Polos de Bienestar tax incentives100% immediate deduction on new fixed assets used only in a zone, fiscal years 2025 to 2030. Confirm terms in the DOF text 8May 22, 2025Check DOF text

05Which public incentives and programs can a new plant use?

Mexico offers tax incentives in designated zones, the Polos de Desarrollo Económico para el Bienestar. According to a Greenberg Traurig summary of the decree published on May 22, 2025, companies in a zone can deduct 100% of new fixed assets used only there at once, for assets bought up to September 30, 2030 and held for two years. An extra 25% of increased training or innovation spending is deductible, for fiscal years 2025 to 2030. Companies must start operating after the decree and keep a positive tax compliance opinion 8. Check the decree in the Diario Oficial de la Federación before relying on these terms. See what lenders ask Mexican companies for on the tax opinion.

The development banks also lend to this build-out. Bancomext planned up to MXN 190 billion of new credit in 2026 11. Nafin and Bancomext announced MXN 120 billion of funding for small and medium-sized firms on February 5, 2026, under the government's Plan Mexico 10. Under the same plan, Nafin cut the rate on peso factoring by 100 basis points and on foreign currency factoring by 30 basis points. Through an agreement with the Nuevo León auto cluster, it also offers loans of up to MXN 10 million to small auto suppliers 9. Our guide to Mexico's development banks covers each program.

06Where does a new plant's supply chain need cash?

Cash goes out long before the first customer pays: the plant pays for land, building and equipment, and its suppliers pay for tooling and materials. Mexico Business News reports that auto parts buyers pay 60 to 90 days after delivery 6. The working capital guide explains how this gap is funded.

Small suppliers feel the gap most: they have few assets to pledge and buy materials on short terms while waiting on long ones. Where the plant is a large, rated buyer, reverse factoring lets the supplier be paid early on the strength of the buyer's approval. Where the plant buys equipment from the US, a loan backed by the US export credit agency can spread the cost; see our guide to US export credit for buyers in Mexico.

Where the cash goes

From site to first customer payment

  1. Construction
    Land, building and fit-outFunded by the park developer's lease, a build-to-suit deal or development bank credit 11.
  2. Equipment
    Machines, duty and freightPaid on order or on delivery. Small suppliers can use equipment credit or leasing 9.
  3. Before production
    ToolingDies and molds are paid before series production. No public source gives typical timing.
  4. Production
    Supplier working capitalMaterials and payroll are paid before the buyer pays, 60 to 90 days after delivery in auto parts 6.
  5. Ongoing
    Inventory bufferSafety stock on both sides of the border ties up cash while the plant ramps up.
The order of cash needs is typical for a new plant and its suppliers. Actual timing depends on each project and contract.
Equipment from the USECA-backed finance

A loan backed by an export credit agency spreads the cost of imported machines.

Tooling and first ordersPre-shipment finance

Funds materials and production against a confirmed purchase order.

Suppliers waiting to be paidPayables finance

The plant approves supplier invoices and a finance provider pays them early.

Safety stockInventory finance

Lends against stock held in a warehouse or at the plant.

07What should investors and suppliers watch next?

The next ministry FDI release will show whether new investment recovers from its 23.1% fall in the first half of 2026 3. The USMCA review sets the frame for most decisions: a fourth round of US-Mexico talks had no date as of October 18, 2026 16. The corridor watch page lists the measures in force.

  • By Dec 2026Fourth round of US-Mexico talks under the USMCA review. No date announced as of October 18, 2026 16.
  • PendingGuidelines for the changed 9803.00.01 parts duty exemption 16.
  • Next releaseMinistry FDI figures for the third quarter of 2026: will new investment recover from its 23.1% fall 3?
  • Jan 12, 2027Deadline for public comments to the US Trade Representative on the USMCA review 16.
  • Dec 31, 2027Section 232 metals rates under Proclamation 11032 run to this date 13.
  • Sep 30, 2030Last date to buy assets that qualify for the Polos de Bienestar immediate deduction, per the decree summary 8.

Questions traders ask

Is nearshoring to Mexico slowing down?

On the latest data, yes. FDI in the first half of 2026 was US$34.97 billion, 7.9% lower than a year earlier on the revised series, and new investment fell 23.1%. Industrial vacancy in Monterrey rose to 6.9% in early 2026 from 5.1% a year earlier.

Was 2025 a record year for foreign investment in Mexico?

Yes. Mexico's economy ministry reported US$40.871 billion, up 10.8%. Reinvested earnings made up 67.7%, and new investment 18.1%.

Which US tariffs matter for a new plant in Mexico?

Goods that meet USMCA rules of origin and are entered with a USMCA claim avoid the 10% Section 301 tariff. Section 232 duties apply to listed vehicles and parts at 25%, and to steel, aluminum and copper goods at 50%, 25% or 15% depending on the annex of Proclamation 11032. These rates are as of October 23, 2026.

What tax incentives does Mexico offer for new plants?

Companies in the Polos de Desarrollo Económico para el Bienestar can deduct 100% of new fixed assets at once, for fiscal years 2025 to 2030, according to a law firm summary of the May 2025 decree. Check the official decree before relying on it.

How do suppliers to a new plant finance their working capital?

With pre-shipment finance for tooling and first orders, payables finance where the plant runs a program, factoring of their invoices, and development bank programs such as Nafin's discounted factoring.

Financing a new plant's supply chain between Mexico and the US? Ossiano Capital works on trade finance in this corridor.

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Sources and notes

  1. El Financiero, México logra histórica cifra de inversión extranjera directa en 2025 (Secretaría de Economía data), February 25, 2026. https://elfinanciero.com.mx/economia/2026/02/25/mexico-logra-historica-cifra-de-inversion-extranjera-directa-en-2025
  2. Mexico Business News, Mexico returns to global FDI top 10 with US$41 billion (UNCTAD World Investment Report 2026), July 7, 2026. https://mexicobusiness.news/trade-and-investment/news/mexico-returns-global-fdi-top-10-us41-billion
  3. Grupo Financiero BASE, IED enero-junio 2026 (Secretaría de Economía preliminary data; publication date not shown). https://resource.bancobase.com/uploads/IED_enero_junio_2026_6446993aa7.pdf
  4. Expansión, Nearshoring en pausa: el norte espera definición clave del T-MEC, April 21, 2026. https://expansion.mx/economia/2026/04/21/nearshoring-pausa-norte-espera-definicion-clave-t-mec
  5. CBRE MarketView Monterrey Q1 2026, via Cluster Industrial, May 4, 2026. https://clusterindustrial.com.mx/inventario-industrial-en-monterrey-alcanza-17-9-millones-de-m2-en-etapa-de-ajuste/
  6. Mexico Business News, The new financial architecture for advanced manufacturing, June 2, 2026. https://mexicobusiness.news/automotive/news/new-financial-architecture-advanced-manufacturing
  7. Vanguardia, Segunda ola del nearshoring no será como la primera: Grupo Amistad, September 8, 2025 (developer projections). https://vanguardia.com.mx/coahuila/saltillo-segunda-ola-del-nearshoring-no-sera-como-la-primera-grupo-amistad-AC17261724
  8. Greenberg Traurig, Estímulos fiscales en los Polos de Desarrollo Económico para el Bienestar (DOF decree of May 22, 2025), June 2025. Not confirmed against the DOF text. https://www.gtlaw.com/ar/insights/2025/6/estimulos-fiscales-en-los-polos-de-desarrollo-economico-para-el-bienestar
  9. Cluster Industrial, CLAUT and Nafin support finance for auto SMEs in Nuevo León, September 2026. https://clusterindustrial.com.mx/claut-y-nafin-impulsan-financiamiento-para-fortalecer-a-las-pymes-automotrices-de-nuevo-leon/
  10. Global Trade Alert, Mexico: Nafin and Bancomext provided MXN 120 billion in funding for SMEs under Plan Mexico, February 5, 2026. https://globaltradealert.org/state-act/96601-mexico-nafin-and-bancomext-provided-mxn-120-billion-in-funding-for-smes-under-plan-mexico
  11. Expansión, Bancomext prevé colocar 190,000 mdp en nuevos créditos en 2026, February 2, 2026. https://expansion.mx/economia/2026/02/02/bancomext-preve-colocar-190-000-mdp-en-nuevos-creditos-en-2026
  12. Steptoe, New tariffs on imports of automobiles and automobile parts, April 16, 2025. https://www.steptoe.com/en/news-publications/global-trade-and-investment-law-blog/president-trumps-new-tariffs-on-imports-of-automobiles-and-automobile-parts-key-updates-and-implications.html
  13. Thompson Hine SmartTrade, President modifies Section 232 tariffs on aluminum, copper and steel imports (Proclamation 11032), June 2026. https://www.thompsonhinesmartrade.com/2026/06/president-trump-modifies-section-232-tariffs-on-aluminum-copper-and-steel-imports/
  14. EY Tax News, USTR finalizes Section 301 forced labor tariffs on 60 economies, July 2026. https://taxnews.ey.com/news/2026-1607-ustr-finalizes-section-301-forced-labor-tariffs-on-60-economies-additional-tariffs-of-10-percent-or-125-percent-take-effect-24-july-2026
  15. White & Case, USMCA 2026 joint review: United States declines to extend agreement, July 2, 2026. https://www.whitecase.com/insight-alert/usmca-2026-joint-review-united-states-declines-extend-agreement-triggering-annual
  16. ICPA, USMCA joint review automotive tracker, October 18, 2026. https://www.icpainc.org/usmca-joint-review-automotive/
  17. Cluster Industrial, México activa aranceles a importaciones de Asia y redefine su política comercial en 2026, December 2025. https://clusterindustrial.com.mx/mexico-activa-aranceles-a-importaciones-de-asia-y-redefine-su-politica-comercial-en-2026/

All facts on this page are as of October 23, 2026, the date of publication, and may have changed since. Rules and tariffs are as of October 23, 2026 and change often: check the corridor watch before you act.

About this guide. Prepared for Ossiano Capital. People planned, researched, wrote and checked this guide, using AI tools to help with research and checking. You are welcome to quote or reuse it: please credit Ossiano Capital and link to this page.

Shrinivas G https://www.mashedavocado.com
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