In 2001, Jim O’Neil, resident business guru at Goldman Sachs, coined the term BRIC Economy, referring to explosive economies of emerging countries such as Brazil, Russia, India, and China. By 2050, the combined economies of these 4 countries are projected to eclipse the cumulative economies of the current richest countries of the world.

However, O’Neil, for all of his brilliant insight, may have inadvertently overlooked the burgeoning economy just below the border. If stories of drug violence, illegal immigration, swine flu are making you hesitate about investing in Mexico, then you should seriously take a closer look.

Quickest Recovery Rate Out of Recession

According to Moody’s Latin America, Mexico is racing out of the recession, recording a 4.3% growth rate (faster than the U.S.) thus far in 2010 and a 10% trough-to-peak increase which bests almost every other economy worldwide. Moody’s expects this growth to continue.

Strongest Currency Against the Dollar

Mexico got an even bigger boost from Bloomberg this month when they reported the peso has gained 7.5% against the dollar so far this year, beating out every other major currency. The peso is expected to grow another 11% by the end of 2010.

Lowest Business Tax in the World

A KPMG study recently found that Mexico boasts the lowest business tax rate in the world, out of 10 major countries and 95 cities. Property taxes, at 1% annually, are minuscule in Mexico. For example, on a 500k USD property, you would only pay $500 in annual property tax. Capital gains taxes in Mexico also have their advantages. In fact, capital gains tax on property appreciation can be exempted if you can simply show that you use the property 6 months out of the year.

Lowest Unemployment WorldWide

Fox Business News reported this year that Mexico’s unemployment performance is now stronger than any other economy on the globe except South Korea and the Netherlands. At 5.1%, down from 5.4% only a month ago, Mexico easily beat out the U.S. (9.9%), Canada (8.1%) and China (9.4%).

Fastest Growing Real Estate Market in the Americas

That could explain why development in Mexico real estate is far outpacing growth in other countries. One of the hottest spots in the Mexican economy is the coastal real estate market, expected to grow faster than any segment in the Americas and Internationally. For example, Playa del Carmen, located in the heart of Mexico’s Caribbean coast, was recently named the fastest growing area in the world by Guinness Book of World Records and the town of Tulum, just to the south, is poised to grow exponentially faster.

Already over 18,000 American companies are investing and operating in Mexico and 1 million Americans now live, work, invest and retire South of the Border, more than any other single place in the world. This number is expected to quadruple in the next decade as an aging America finds itself with over 100 million citizens above the age of of 50. They are looking for a cheaper place to retire that offers good healthcare at a lower cost and a warm tranquil lifestyle. With the recent BP oil disaster in the Gulf, Mexico may be the perfect place for these would-be retirees.

Another BRIC in the Wall

What is the lesson here for Jim O’Neil and other BRIC advocates? Don’t underestimate the investment potential of the economy just south of the boarder. Sometimes the greatest opportunities are found right at your doorstep and Mexico may be the biggest BRIC yet!

by Michael Zenn
www.investmentpropertiesmexico.com

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