According to the US State Department 2011, the federal government has introduced several initiatives that reduce the number of contact points between companies and front-line officials that have helped remove some of the possibilities for extracting bribes in return for public services. Private companies form the backbone of the Mexican economy, and the federal government has introduced several measures to eliminate non-transparent practices in the public and private sectors in order to stimulate private sector growth. One such measure has been the establishment of the Federal Competition Commission (in Spanish), which is active in fighting monopolies in the Mexican economy. Furthermore, an approved tax reform came into effect in January 2008 which includes a much debated corporate tax (IETU) and represents an attempt to stamp out tax fraud in the informal sector. Despite such initiatives, companies indicate in the World Economic Forum Global Competitiveness Report 2010-2011 that corruption and inefficient government bureaucracy continue to be the two most problematic factors for doing business in Mexico. In addition, a CEESP 2007 business survey (in Spanish) conducted among 400 companies in Mexico revealed that the respondents perceive insecurity, piracy/falsification, the informal economy and the dysfunctional judiciary to be the largest constraints for business development. Mexico is struggling with an enormous informal sector, and informal mechanisms are generally cited as a major problem by companies operating in Mexico. According to observers, small companies in Mexico are much more vulnerable to corrupt public officials and to the competition of the informal sector which is estimated to constitute between 40 to 50% of the total economy.

According to the KPMG Encuesta de Fraude y Corrupción en Mexico 2008 (in Spanish), a survey conducted among 235 companies operating in Mexico, 80% of companies are affected by corruption and USD 900 million was estimated to be lost in Mexico's private sector to internal fraud in 2007 alone. The survey shows that 44% of the companies surveyed paid bribes to public officials and did so most frequently at the municipal level. These bribes cost them an average of 5% of their annual revenues. Of the companies surveyed, 43% reported that they paid bribes primarily in order to circumvent slow and confusing procedures, while 32% paid bribes to obtain licences or permits and 21% to avoid abuses from authorities. As a consequence of not paying bribes to public officials, 47% of companies experienced slower procedures, 27% were punished with fines, 21% lost a contract and 7% lost public surveillance or protection of their companies. A PricewaterhouseCoopers 2007 business survey (in Spanish) reveals that 46% of domestic companies report having been subjected to economic crimes, such as corruption, an increase of almost 10% from a similar survey in 2005.

Business-to-business corruption is reportedly also a major problem. Business executives surveyed by the World Economic Forum Global Competitiveness Report 2010-2011 indicate that the ethical behaviour of companies in Mexico constitutes a competitive disadvantage. Mexican companies perform poorly according to the Transparency International Bribe Payers Index 2008, which ranks the world's 22 leading exporting countries according to the propensity of their companies to bribe when operating abroad. The KPMG 2008 survey mentioned above shows that 77% of surveyed companies suffered from fraud at least once in the preceding year. Of those incidences of fraud, 46% were perpetrated by an employee either alone or in cooperation with a customer or business partner. In 25% of these cases of fraud, the total financial losses incurred amounted to at least MXN 1 million, whereas in 10% of the cases it amounted to more than MXN 5 million. PricewaterhouseCoopers' 2007 business survey also shows that, among the reported cases of economic fraud, 32% of the respondents claim that they have suffered from embezzlement of funds. Fraud was typically detected by internal audit systems; however, Mexican companies suffer from ineffective internal audit systems, indicating that a huge proportion of economic crimes are likely to go undetected. Above and beyond the reputational risk they run if caught engaging in corrupt practices, companies should be aware that they are also liable for bribery and corruption carried out by agents on their behalf. For these reasons, companies are advised to develop, implement and strengthen integrity systems and to carry out extensive due diligence before investing in and while doing business in Mexico.

The Federal Commission on Regulatory Improvement (COFEMER, in Spanish), operating under the Secretariat of Economy (SECON), is responsible for reducing the regulatory burden on business. The Quality Regulatory Agreement of 2006 allows for the creation of new regulations only when agencies are able to prove that these are needed because of emergencies, in order to comply with international commitments, or because of obligations established by law. Figures from the World Bank & IFC Doing Business 2011 show that starting a business and building a warehouse in Mexico is quicker and cheaper than in other countries in the region. According to Transparency International Global Corruption Report 2009, the shortening of the time required to start a company has resulted in a rise in registered companies, thus reducing the informal sector in the country. Moreover, Mexico has made much needed reductions in the number of payments and time spend on filing and paying taxes, which has traditionally been a competitive disadvantage in the country. Despite this, companies still cite bureaucratic bottlenecks and lack of administrative transparency as obstacles to business operations. In the World Economic Forum Global Competitiveness Report 2010-2011, the surveyed companies continually cite inefficient government bureaucracy as the most problematic factor for doing business in Mexico. In addition, surveyed business executives report that although it is relatively easy to get information on changes in government policy-making and regulatory changes, it can be extremely burdensome to comply with governmental administrative procedures. According to the World Bank & IFC Enterprise Surveys 2006, senior managers spend more than 20% of their time dealing with requirements of government regulation in Mexico. However, it must be noted that several surveys indicate that the level and type of regulatory burden and related corruption differ widely between Mexican regions and states (see this profile's special page on regional differences in the Mexican regulatory environment).

Despite some regulatory constraints, Mexico has made progress in simplifying procedures in relation to foreign investment. The Ministry of Economy (SE) has established the ProMexico portal through which companies can access information and forms, links, import/export permit applications, online tax payments and advice on investment and trade-related questions. The portal also provides companies with links to the Rapid Business Start-Up System which reduces the number of formalities required to open a company in Mexico. Similar initiatives have been developed in some of the states. The Foreign Investment Law 2006 (in Spanish), which is consistent with the foreign investment chapter in the North Atlantic Free Trade Agreement (NAFTA), regulates investments, and there are only a few restrictions on foreign investment. To strengthen ties between Mexican and foreign companies, the government-owned development bank Nacional Financiera (in Spanish) promotes Mexican-foreign joint ventures for the production of capital goods. Nacional Financiera provides loans to companies in priority development areas and industries. Companies investing in export processing zones, such as the maquiladora industry, should follow the Ministry of Economy's IMMEX guidelines (in Spanish) from late 2006 closely, preferably in close consultation with locally-based legal advisors.

Business executives surveyed by the World Economic Forum Global Competitiveness Report 2010-2011 report that the legal framework for private companies to settle disputes and challenge the legality of government actions and/or regulations, be it in relation to property rights or contract enforcement, is relatively inefficient and may be subject to manipulation. In addition, the US Department of State 2011 reports that commercial disputes, especially in real estate transactions, often take years to resolve in Mexican courts. Dispute settlement is provided for in Chapter 11 of the NAFTA agreement which states that investors may initiate arbitration under both the New York Convention 1958 (UNCITRAL) and the International Centre for Settlement of Investment Disputes (ICSID) rules. The Mexican government and courts generally recognise and enforce arbitral awards. Companies should also note that Mexico struggles with issues of falsification, i.e. infringements of intellectual property rights (IPR), which are poorly protected in practice. Many efforts are put into improving the protection of IPR, but corruption among customs officials, police officers and in the judicial system blocks many well-intentioned initiatives in this field.