Disclaimer: The following are general rules for business dealing in Mexico. As with most generalizations, they are not always accurate and there are exceptions - both positive and negative - to all that is written here. Do not let stereotypes get in the way of your business.
General Mexican Business practices
Working Hours for Offices
In Mexico City, most offices are open from 9 a.m. to 5 p.m. or even 7 p.m., Monday to Friday. Most people leave for the afternoon meal around 2 p.m. and take between 1 and 2 hours.
The Mexican government normally works from 10 a.m. to 8 p.m. (if not later) Lunch is usually one hour, sometimes two and is taken between 2 to 5 p.m. (no standard "lunch hour" as such).
Some businesses may even open at 7:30 a.m.
Business Hours
All banks are open from 9 a.m. to 1:30 p.m., Monday to Friday. Some banks have extended hours in some branches. Branches in Mexico City are open from 8 a.m. to 7 p.m..
Supermarkets in Mexico City are open seven days a week, from 9 a.m. to midnight; in other cities hours are more likely to be shorter and they may close for lunch from 1 to 3 p.m. Also they may not open on Sunday.
In Mexico City, street front stores are usually open from 10 a.m. to 8 p.m. In other cities, hours may be shorter, and it is highly likely that they will be closed from 1 p.m. to 3 p.m. for lunch.
Dress code
Mexican business people wear suits, so they expect you to do the same, no matter how hot the weather. Shorts are a no-no, not even for a picnic. If you are invited to a picnic or a tour of the countryside, dress casually, but elegantly. Polo style shirts, a sweater and sporty slacks would do.
The Art of Negotiating
Learning to negotiate in Mexico is key for your business success. The rules and practices of negotiation in Mexico are very different from those in Canada and the USA. In Mexican business circles "Yes can mean no and no can mean maybe."
In Mexico, it is impolite to verbally disappoint you. As an example, if you organize a party, most people would assure you that they will attend regardless of whether they will or won't.
"Dar largas" is the practice of procrastinating in a deal where one of the parties said yes, when they meant to say no. It is important that you learn to distinguish between those cases where your business partner may need a bit more pushing and those cases where there is no chance of actually proceeding through with the deal, so as not to waste
resources.
People like to promise you the world while they are leading you down the garden path. Some people deliver on their promises but there are those who don't.
Personal Relationships
Business deals are only closed between friends. This means that you must develop a friendship with your customers in Mexico. Fortunately, it doesn't take long to make friend there. You do not have to become intimate friends, but there has to be "confianza" - trust.
Business meals are the time to get to know each other; conversation may wander through many different topics. From business breakfast and lunches people usually move on to an after hours business outing, where drinking is involved (a la Japanese), or to be invited for a heavy-late dinner called "cena" in a family setting.
Closing a deal
You have to be careful and look for references from your potential business partner if you don't want to be "transado" - to be had. Make sure to leave a paper trail and follow the "dando, dando, pajarito volando," which means that the exchange of money and merchandise happens at once. Payment should be by certified check, approved credit card transaction or with a transfer of funds in a bank.
Business Breakfasts and Lunches
A lot of business is done at breakfast and/or lunch. Breakfasts are also the preferred choice to meet, get to know, and exchange information over the potential business deal.
People tend to have power breakfast and/or lunch, lasting over two hours, in expensive settings. It is impolite to split the bill. The person who is making the sale is traditionally expected to pick up the tab, or, alternatively the person who suggested or "invited" other parties to join him/her for a meal is understood to be offering to pay for that meal. (People rarely split the bill on a business meal). Tips, which are not included in the bill, range from 10% to 20%.
Using the telephone and fax
The telephone is a useful tool to set up appointments and ask some general inquiries, but deals are never closed over the phone. Telephone is considered an informal means of communication. It is also recommended that you confirm all
appointments over the phone.
Cellular phones are pervasive in Mexico. Fax machines are also very common. They are preferred over the phones when dealing important issues. Remember that a spoken commitment in Mexican business culture is never binding. A fax is.
In most cases, when phoning a Mexican businessperson, you will have to go through 1-3 secretaries before reaching the desired person. These secretaries may not speak English, so have a short sentence prepared.
Other common business practices
In Mexico, time is not money. People like to take their time to reach a decision. They do not appreciate "straight to the point" approaches.
Nepotism is a common practice in business circles, not only may the son of the owner work for the company (indeed as is often the case in the U.S.) but many relatives of the CEO and higher-level managers may do so as well.
Bureaucracy is big in Mexico. It is good practice to take with you copies of most relevant files and legal documents that may be required during the transaction.
The Mexican Wage Structure
Working hours and days
According to Mexican law, the working week cannot be more than 48 hours a week. From time to time, you may have workers work longer, but they must be paid overtime wages and there are limits as to the maximum number of overtime hours permitted per week. Some workers get paid by the week (la raya) others may get paid bi-weekly (la quincena). Few workers get paid monthly. Workers are usually under a 5.5 day work week. Legally, lunch hour must be paid for workers whose work shift includes lunch time (3 p.m.-4 p.m.).
Benefits
As in Canada and the USA, a worker may be your employee or may be an independent worker providing you a service under contract (por honorarios); in the latter case, you are not responsible for any benefits. In the former, minimum legal benefits include (but are not limited to):
Health insurance under the "Seguro Social" (IMSS)
15 days of wages at the end of the year (Aguinaldo)
Housing development (INFONAVIT)
Retirement funds (SAR)
Holidays. 5 days of paid holidays a year minimum.
No more than 8 hours of working day under regular wages.
Profit sharing. Workers are entitled to a small percentage of your profits. (10% of the total).
Sometimes these regulations are ignored, especially when it comes to white collar workers.
Minimum wage structure
Minimum wage in Mexico is about 100 USD a month, plus benefits. Minimum wage is set by the federal government, depending on "economic zone" and tradesmanship. Few white collar workers earn minimum wage, which applies mostly to shop workers.
If you want to reduce the turnover factor of your employees in the shop, you will most likely have to pay at least three times the minimum wage.
Translation
According to Mexican laws, and common sense, you must translate your marketing literature, product manuals, labels and warranty. This may sound obvious to you, but many companies provide only a single sheet in
Spanish, which hampers your business potential and/or may result in the sequestering of your merchandise at customs or sales point. Products from NAFTA countries must have manufacturer's label in Spanish.
Getting a distributor in Mexico
Depending on the type of business, you may have to proceed differently:
Attend Mexican business fairs.
Look for well-established enterprises, with a long tradition, and solid financial position.
Ask (see information).
Greetings in society.
People shake hands every time they see one another or are introduced. Close friends of opposite gender greet with a kiss on the cheek, whereas close male friends give each other a simultaneous hug and strong handshake.
Status
Mexicans are very status conscious. They care about what you wear, what car you drive. Professional titles are also very important. It is customary to address your business partner as "licenciado," which is the equivalent to a bachelors' degree. Do this even if you know that your business partner is not a licenciado. "Ingeniero" (engineer) and "doctor" (either medical doctor or Ph.D) are also quite common.
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