Mexico Nearshoring Boom Hits US$40.9 Billion FDI Record Before Energy and Tax Limits Bite
Nearshoring Latin America is redrawing investment maps in 2026 as Mexico posts record FDI while energy and tax bottlenecks start to bite for manufacturers. The post Mexico Nearshoring Boom Hits US$40.9 Billion FDI Record Before Energy and Tax Limits Bite appeared first on The Rio Times .
Mexico experienced a record foreign direct investment (FDI) of US$40.87 billion in 2025, with an even higher US$34.97 billion recorded in the first half of 2026. This surge has solidified Mexico's status as North America's top nearshoring destination. However, the country is facing challenges that are limiting its nearshoring potential.
While domestic investment in Mexico declined by around 10% in 2025, gross fixed investment dropped 3.6% year over year in February 2026. This indicates a disconnect between foreign inflows and local investment confidence. The main infrastructure constraints hindering Mexico's nearshoring growth are energy supply issues, water scarcity in the northern industrial belt, and inefficiencies in customs processes.
Retroactive tax audits conducted by Mexico's tax authority, SAT, pose a significant operational risk for manufacturers. These audits can extend up to ten years back and may force companies to pay disputed amounts upfront, potentially suspending import licenses and disrupting supply chains.
As a result, Central American countries, the Dominican Republic, Colombia, and Costa Rica are attracting services and maquila investment from the US as tariff uncertainty pushes companies to diversify. Mexico's nearshoring boom is real but uneven, with foreign manufacturers pouring record sums into plants and industrial parks, despite domestic investors retreating and infrastructure strains.
Between 2018 and 2025, cumulative foreign direct investment in Mexico increased by an estimated 69%. The surge in FDI in 2025 was directly linked to the nearshoring boom and the deepening integration under the United States-Mexico-Canada Agreement (USMCA). According to a Rio Times analysis, Mexico is structurally the preferred nearshoring destination for North American supply chains due to wage and logistics advantages.
However, the data reveals a paradox: while Mexico is attracting record amounts of foreign investment, domestic investment has declined. This discrepancy raises questions about the relationship between policy narratives and institutional credibility. Moreover, uncertainties around fiscal governance and tax enforcement, such as the retroactive tax audits by SAT, are shaping the future of nearshoring in Mexico.
Written by urgent.news from The Rio Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
