Mexico's New Incentive Makes Waves
It's a boon to the local industry - but is it enough to lure US productions south of the border?
Mexico’s new production incentive made a splash this week, with Mexican President Claudia Sheinbaum and Oscar-nominated actress, producer, and director Salma Hayek taking the stage for the big announcement.
What we know:
The tax credit offers big benefits to the Mexican production community, requiring that at least 70% of suppliers be local for productions to qualify.
A complication: the credit’s project payout cap of $2.3M US (40M pesos) is relatively low for features compared to various other jurisictions, while the $1.1M (20M peso) minimum spend may be high for certain categories of unscripted and docs, which could limit the incentive’s appeal.
But for projects with budgets in that sweet spot, whose editorial calls for one or more of Mexico’s diverse locations (think Caribbean beaches, colonial architecture, bustling cities, ancient ruins, stunning landscapes) - it’s enticing. Layer on Mexican state incentives like Jalisco’s 40% cash rebate and the right production could save a nice chunk of change.
More details:
Qualifying formats: Live action, animated features, series (including qualifying unscripted), docs, VFX, post
Form: 30% income tax credit
Requirements:
Project must use a of minimum 70% local suppliers
Minimum local spend:
Live action & animated features and series episodes: $2.3M (40M peso)
Documentary features and series: $1.1M (20M pesos)
Select animation, VFX, and post: $291K (5M pesos)
Project Cap: $2.3M US (40M pesos)
Who’s eligible: Mexican individuals/entities, foreign individuals/entities with permanent establishment in Mexico, and foreign individuals working through a Mexican individual (eg service provider) or legal entity
The new incentive is a boon to the local film industy.
But when it comes to location-agnostic foreign productions, can it compete with incentives elsewhere…
…especially as beefier US incentives are luring runaway productions back?
Witness New Jersey, which saw the biggest % growth in film production in the US in 2025, with a 75% increase in productions YOY. New Jersey’s incentive - with its hefty 30-35% base credit, plus diversity and opportunity zone uplifts and select sales tax exemptions, are helping drive that growth (we’ll have more on NJ’s incentive in our upcoming Jurisdiction Spotlight).
The Garden State’s studio partnerships, infrastracture tax credits, and the extension of its incentive until 2049 all offer a stable foundation for industry growth. Designated studio partners enjoy an enhanced 40% base tax credit, which has already inspired Netflix to reroute eleven projects previously slated to film abroad to New Jersey. The state’s Aspire Program incentivized Netflix to transform a former army base into a billion-dollar, 292-acre, state-of-the-art New Jersey production facility, Netflix Studios Fort Monmouth, creating thousands of jobs and generating an estimated $3.8-4.6B in economic activity in the state in the coming two decades.
It’s just the kind of long-term commitment and investment that might keep more US productions from moving abroad - even as jurisdictions like Mexico sweeten the pot.
Producing across borders?
Hosting foreign crews?
Be prepared.
International productions and co-productions deliver significant financial benefits, but cultural misunderstandings can quickly erode those savings through miscommunication, project delays, and team friction.
Globally Minded helps production companies, crews, film commissions, and service providers turn cultural differences into strategic advantages. With 25+ years of leading multicultural teams across five continents and delivering millions in cost savings through international partnerships, we provide:
For Production Companies & Crews: Cultural intelligence training, location culture research, and team playbooks that prevent costly miscommunications, accelerate team cohesion, and maximize the ROI of your international shoots and partnerships
For Film Commissions & Service Providers: Tools to better serve foreign clients, differentiate your location, and build lasting production relationships that bring crews back
Whether you’re shooting abroad, collaborating with international partners, or hosting foreign productions, cultural agility isn’t just nice to have - it’s a competitive edge.
Learn more at Globally Minded, or reach out to Carrie directly at carrie@carrieregan.com to find out more.
Film commissions: Time to brag about your own incentive! We’re featuring Jurisdiction Spotlights in upcoming issues of Production Incentives Insider.
Just reach out to us at the email above, or via our website.