Record-Breaking FDI Inflows in Mexico
Mexico has attracted a staggering $3.149 billion in new foreign direct investments (FDI) by the end of Q2 2025, marking a significant 246% increase from the previous year’s $909 million. This surge represents the highest growth in the past 12 years, as reported by Mexico’s Secretariat of Economy.
Understanding New FDI
New FDI refers to the movements of IED associated with initial investments made by foreign individuals or entities when setting up in Mexico. It also includes foreign investors’ contributions to the capital of Mexican companies (initial or additional) and the transfer of shares from Mexican investors to foreign ones.
Reinvested Earnings and Intercompany Transactions
Of the total investment registered by Q2 2025, reinvested earnings accounted for 84.4%, while new investments made up 9.2%. Intercompany transactions constituted 6.4%.
- Reinvested earnings saw a 4.5% decline, dropping from $30,288 million to $28,914 million compared to the same period last year.
- Reinvested earnings represent the portion of profits not distributed as dividends, considered FDI since they increase foreign investors’ capital.
- The proportion of reinvested earnings in total investments fell from 97.3% in Q1-Q2 2024 to 84.4% in 2025.
Growth in Intercompany Transactions and Investor Confidence
Intercompany transactions showed substantial growth compared to Q2 2024, rising from -$101 million to $2.202 billion. This positive trend was also observed in the same period of 2023.
Intercompany transactions are transactions between Mexican companies with FDI in their capital and related foreign entities.
Historical Highs and Top Investor Nations
In the first two quarters of 2025, Mexico’s total FDI inflow reached $34.265 billion, a 10.2% increase from Q2 2024’s $31.096 billion, setting a new historical maximum for the fifth consecutive year.
- The United States remains Mexico’s leading foreign investor, accounting for 42.9% of total flows.
- Spain and Canada, long-standing trade partners, occupy second and third place, respectively.
- The top five nations collectively account for 73.3% of total FDI received in Mexico.
Investment Trends by Nation
The United States’ investments grew by $986 million, from $13.717 billion to $14.703 billion. However, Canada and Germany saw decreases of -$657 million and -$456 million, respectively. Japan’s investment remained relatively unchanged.
North America (US and Canada) contributed 48.0% to total FDI in Mexico, highlighting the interdependence of economic relations within the T-MEC region and the significance of foreign investment in trilateral economic growth.
State-wise Distribution of FDI
79.2% of the FDI received by Q2 2025 concentrated in five Mexican federal entities. The Mexico City continues to be the primary investment destination, capturing 56.4% of total investments.
- FDI grew by $5.128 billion in the first two quarters of 2025, rising from $14.184 billion to $19.312 billion, a 36.2% increase.
- Nuevo León and the State of Mexico also experienced a 31.6% increase, growing from $2.304 billion to $3.032 billion and from $1.709 billion to $2.249 billion, respectively.
- Baja California, however, saw a 12.8% decrease, falling from $1.809 billion to $1.577 billion.
Sector-wise Allocation of FDI
Approximately 36.0% of the FDI went to the manufacturing sector. Other notable sectors include financial services (26.7%), construction (7.6%), and mining (7.2%).
