The Long-standing Struggle of Small Businesses with Excessive Regulations
Small and medium-sized enterprises (SMEs) in Mexico have been grappling with an overregulated environment for nearly a century, according to records dating back to 1927. This excessive regulation has led to corruption and discouraged businesses from continuing their operations.
The Challenge of Diverse and Complex Regulations
Octavio de la Torre, president of Concanaco Servytur, highlighted the issue during an interview. He explained that the varying requirements and procedures for opening a business, obtaining permits, licenses, or inspections across different entities create confusion and complicate processes. This complexity fosters corruption and discourages businesses from pursuing their ventures.
Concanaco to Participate in Testing the National Law to Eliminate Bureaucratic Procedures
In response to this challenge, de la Torre supports the National Law to Eliminate Bureaucratic Procedures, proposed by President Claudia Sheinbaum and recently approved in the Chamber of Deputies. Although it still needs Senate approval, Concanaco Servytur plans to participate in real-user testing to identify areas for improvement.
The initiative aims to streamline and reduce bureaucracy in areas such as licenses, business operation notifications, and civil protection plans. According to the “SME Regulation Survey 2025” by Concanaco, 50% of businesses are unaware of regulations affecting their operations, and 76% believe these regulations negatively impact company profitability.
Furthermore, 20% of businesses spend monthly efforts addressing bureaucratic requirements, limiting their growth, innovation, and competitiveness against larger corporations.
The Importance of Digitalization and Regulatory Harmonization
De la Torre emphasized the significance of digitalization in overcoming bureaucratic challenges. He expressed confidence that the National Law to Eliminate Bureaucratic Procedures would leave a lasting legacy for the country, as it builds on successful initiatives implemented in Mexico City.
Expanding Access to Credit for SMEs
Poor business management, lack of human capital development, and insufficient financing are the primary causes of business failure, according to Concanaco. Enhancing SMEs’ access to affordable credit can prevent business closures.
De la Torre criticized Mexico’s development banking sector, stating that it primarily serves those who don’t need loans. He warned that without access to formal credit, small business owners resort to unregulated financing, putting them at risk.
Recognizing the need for government and bank collaboration to provide more SMEs with formal credit access, de la Torre stressed the importance of understanding small business owners’ unique circumstances.
Understanding Small Business Owners
De la Torre emphasized the need to view small business owners as integral parts of local communities rather than distant decision-makers. He highlighted that these entrepreneurs operate in neighborhoods and territories, often unable to engage in policy discussions due to their focus on running their businesses.
