Overall, Mexico enjoys a high degree of political stability. Government transitions at federal, state, and municipal levels take place in a generally peaceful manner through the ballot box. The political system is a functioning electoral democracy – unlike during the long period of Institutional Revolutionary Party (PRI) hegemony that ended with the 2000 presidential elections – but has structural weaknesses and shortcomings. The National Regeneration Movement (MORENA) has a majority in both houses of Congress and in the majority of the 32 state congresses. This gives Morena (and López Obrador) unprecedented political powers and the ability to pass constitutional amendments. In June 2021 legislative elections will be held to renew the composition of the Chamber of Deputies. The elected Congress will determine the second half of the AMLO presidency. If MORENA succeeds in increasing its representation in Congress after the mid-term elections, AMLO may try to roll back the energy reform (a two-thirds majority in Congress is required), hurting investors’ confidence in the economy.

Recent economic sluggishness, political infighting, corruption scandals, and social unrest are unlikely to affect overall stability. The country's business-friendly stance is recognized by international investors and Mexico is considered one of the most attractive investment destinations in the region. However, this business-friendly stance is being challenged by the uncertainty generated by AMLO government, whose policies could discourage investment in some sectors. Government-led spending is  increasing during the presidential administration of AMLO, particularly on welfare and social programs. Consequently, public debt as percentage of GDP has increased from 53,6% in 2018 to 65,5% in 2020. 

Mexico is considered a Flawed Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 73 out of 167 countries scored.

The country ranks 76 at the 2019 Human Development Index developed by the United Nations Development Programme.

There are several concerns relating to Mexico’s operating environment. There are infrastructure limitations, especially in southern states. There are few restrictions on property ownership but the judicial system is not considered to be fair and independent of the government, especially at state and municipal levels. Companies operating in Mexico are likely to face operational challenges when dealing with state and municipal governments. These range from barriers in obtaining environmental and land-related permits to corruption. Bureaucracy and red tape remain significant, though many steps have been taken to improve efficiency and reduce processing times and procedures. The ineffective number of bureaucratic procedures involved in doing business increases opportunities for corruption, with continuous scandals concerning local and federal authorities.

Firms also face non-payment risks when dealing with financially troubled states. Authorities estimate there are 2,873 rules, procedures, and regulations that private companies need to follow to operate in Mexico, with local business groups openly calling for a reduction in the regulatory burden. In addition, labour and environmental activism is a relevant risk to operations, particularly in areas with indigenous communities or protected natural reserves; activism is strongest in the energy and mining sectors. However, the largest protests in recent years have targeted the public sector. Labor-related risks are likely to intensify because of rising job insecurity and economic recession. In addition, it is important to mention that it is common for trade unions to offer protection contracts, being a type of extorsion.

The COVID-19 pandemic is likely to cause significant operational disruption in the coming months. The government has declared that all non-essential business should close for the time being.

Regarding transportation in Mexico, travelers should be aware that Mexico suffers from a high rate of traffic accidents; the country experiences over 16,000 traffic fatalities per year. Mexico City is notorious for road congestion. Traffic conditions have gotten progressively worse over the past decade and traffic can prove dangerous for pedestrians and cyclists.

Security conditions on highways can vary considerably from place to place. Highway banditry is not uncommon in areas lacking adequate national police or army presence. In general, national highways - particularly highways with tolls (cuotas) - are the safest choice for travelers. If attacked, obey all orders and never attempt to drive around a roadblock, which are frequently manned by highway bandits.

For security reasons, individuals should not hail taxis on the street but should instead order them in advance from a reputable (licensed) company or use a taxi stand. Public transit should be avoided in some areas due to high rates of crime (e.g. pickpocketing and armed robberies) reported on municipal and intercity buses; in Mexico City, the metro and Metrobus services are generally considered safe, especially during the day.

Due to high rates of air pollution, permanent driving restrictions are in place in the capital region. Cars that are nine to 15 years old are banned from the streets between 05:00 and 22:00 (local time) one day per week as well as two Saturdays per month. Cars older than 15 years are banned one day per week and every Saturday. All cars with foreign license plates, no matter what their model year, are also banned from the roads between 05:00 and 11:00 one day per week and every Saturday. There are no driving restrictions on Sundays and there are no restrictions for driving hybrid and electric vehicles, as well as domestically registered cars that are eight years old or newer. The "Hoy No Circula" schedule regarding driving restrictions for older and foreign cars, based on license plate numbers, is available online. Additional driving restrictions are regularly implemented during periods of high air pollution.

The following recommendations are applicable to all automobile journies in the country:

Before getting in or out of a vehicle, take note of your surroundings. Always drive with doors locked, windows rolled up, and a sufficiently full gas tank. Leave room to maneuver between your car and the car ahead (particularly in traffic) to avoid becoming inadvertently or intentionally trapped (and thus vulnerable to criminals). Parking well-lit, secured areas whenever possible. Avoid making your car particularly recognizable (e.g. bumper stickers, etc.).Vary your hours, commute, etc., to avoid becoming a predictable target. If you believe you are being followed or threatened in some way, drive to a busy and/or secured area (not home).

Government and police checkpoints are common. As such, you should always carry your passport, visa/residency card (if applicable), the original copy of your Forma Migratoria Múltiple (FMM) - issued to foreign visitors upon entry into Mexico - and car registration/insurance documentation. If you approach a checkpoint, remain calm and follow all instructions. If you are detained, immediately ask to contact your embassy.

Police corruption is a major issue in Mexico. As this may be frequent, never attempt to bribe an officer but be prepared to be propositioned. Similarly, traffic cops (tránsitos) are notorious in some areas for demanding excessive "fines" (mordidas), a type of extortion, from foreign drivers. Generally speaking, corruption is a more significant issue within municipal and state police forces, and less so within the army or the federal police.

Protests are common in Mexico and demonstrators commonly erect makeshift roadblocks to disrupt. As violence is relatively common, never attempt to cross a roadblock or drive around one without permission. A "toll" may be demanded. 

Overall, Mexico ranks 60 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 124 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

In Mexico, crime-related and organized-crime-related activities are the ones who will most likely represent a threats to business. 2019 was the most violent year as measured by total murders since public security records began, and the security environment will remain complicated throughout 2021. Rates of petty crime and organized criminal group-related crime are high and there are significant threats of theft, fraud, kidnapping, assault and murder, particularly in major cities. Mexico is Latin America’s primary kidnapping hotspot. Moreover, prevalence of almost every type of crime recorded has increased, most notably business robberies and carjacking. It is estimated that both national and foreign firms spend between 4% and 7% of operating profits on security and crime prevention measures, depending on the economic sector, location and logistic needs. 

The security forces' focus on drug trafficking has often created security vacuums, and common criminals and smaller-scale gangs have taken advantage to carry out crimes with increasing impunity. This is most evident in areas of Mexico that have been heavily affected by organised criminal groups and where the security forces have been forced to prioritise their response to such crime. 

Street robbery is also frequent, with victims risking injury or death if they offer resistance. Criminals target individuals using the public transport system, those in vehicles not moving due to traffic, or leaving bank branches, including in areas frequented by business people. The use of illegal taxis increases express kidnapping risks. Several of Mexico's drug cartels have alliances with smaller gangs nationwide, which also engage in activities such as micro-trafficking of drugs, extortion, vehicle theft, pedestrian theft, home robberies, and kidnapping. While a majority of crimes are committed in urban areas, some states in the west, south and south-east exhibit sustained, high rates of crime in rural areas. Additionally, although the vast majority of victims are nationals, members of large expat communities are likely to occasionally fall into the general pool of victims. 

Protests are increasingly likely to affect private companies and supply chains. The profile of groups driving demonstrations varies by location but includes trade unions, local communities, teachers, and public-sector workers. They generally demonstrate by blocking highways, disrupting cargo, and blockading commercial sites and airports. Looting incidences, particularly targeting department stores, are rising nationwide. Mining and onshore hydrocarbon projects face community unrest and social investment demands, as well as surface rights’ negotiations with rural landowners. Local communities at times disrupt projects when environmental disputes arise.

The last politically motivated terrorist attack in Mexico was carried out by the Popular Revolutionary Army (EPR), which claimed responsibility for three waves of IEDs targeting pipelines in 2007. The group has not carried out any attacks since. There are no other terrorist groups in Mexico with the known intention to target commercial or government-owned property due to political, religious, or ideological reasons. Mexican drug cartels, however, engage in armed confrontations with members of the security forces and have damaged property in extortion-related attacks. The Mexican government does not consider them terrorists, but US President Donald Trump threatened to designate them as such in 2019.

Mexico is unlikely to initiate inter-state war. However, the killing of a US-Mexican family in November 2019 led US President Donald Trump to say that it was time for the United States to wage war against drug cartels in Mexico, despite the country opposing foreign intrusions in its territory. The US designation of the cartels as terrorists has been put on hold, but if it comes into effect it would increase the probability of US unilateral actions in Mexico, most likely via the capture of drug lords or targeted operations. Even if such unilateral action were to happen, military conflict between both countries is highly unlikely.

The war on drugs in Mexico is an asymmetrical conflict in which government forces confront criminal groups who, in turn, fight over various illegal activities such as drug trafficking, drug dealing, human trafficking, illegal immigration, oil theft, extortion, kidnapping and murder. Given the state's inability to prevent the escalation of violence, Community Self-Defence Groups have been organised in some rural areas, made up of armed civilians who in several cases have been legalised and have become part of the Mexican Rural Police.

The dispute over the control of these activities and territories poses a major threat both to the country itself and to those geographically closer to it. Since 2015, the security situation in Mexico has deteriorated significantly and homicides have multiplied by 86%, and are now the leading cause of death among people aged 15-44.

Due to its location, Mexico is a transit zone between the main areas of coca production (especially Colombia) and consumption (USA). Drugs are transported along three main routes: the Pacific, the Gulf (Atlantic) and the central route. The states with the highest current levels of insecurity are Guanajuato, Jalisco, Baja California, Michoacán and Chihuahua.

As of 2018, the main cartel in the country is the Jalisco Cartel - New Generation (CJNG), which operates in at least 25 of Mexico's 32 states. Other major cartels, such as the Sinaloa Cartel, Los Zetas or El Cartel del Golfo also control large territories. These groups have also made agreements with international criminal organisations, in particular with the Chinese mafia for the distribution of synthetic drugs and with Central American maras and Colombian cartels to control the production and transportation of cocaine to the US.

Although the aforementioned threats would not directly affect FCC projects in the country, these types of activities are commonly related to extortion, theft and intrusions that would have a negative impact.

Overall, Mexico ranks 137 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

Mexico is currently among the most cyber-attacked countries in the world. According to Kaspersky cyber threat map, it is ranked the 11th most attacked country.

No vaccinations are required to enter the country. Nonetheless, routine vaccinations like tetanus, diphtheria or tuberculosis recommended for all travelers. Other vaccinations like typhoid fever or hepatitis A is recommended for most travelers and hepatitis B or malaria vaccines are recommended for some travelers.

Mexico ranks 28 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

The coastal and low-lying regions of Chiapas and Yucatan states have a hot and humid climate with a rainy season from June until September. The climate is more temperate along the Central Mexican Plateau. The north is dry, even arid (very hot summers, cold winters, little rain). It is cool all year long at high elevations (2,000 meters).

Mexico's hurricane season on the Pacific (west) coast extends from May 15 to November 30 and on the Atlantic/Caribbean (east) coast from June 1 to November 30; the largest concentration of storms typically occurs between August and October. Hurricanes have the potential to cause major damage and loss of life, as well as travel disruptions, particularly in Mexico's coastal states. In August 2016, Tropical Storm Earl and its remnants resulted in flooding and landslides in central and southeastern Mexico, leaving more than 50 people dead. Several storms struck the country in 2017, although none resulted in catastrophic material damages or a significant number of casualties. Regularly updated information regarding all tropical storms is available at the website of the US-based National Hurricane Center. If a storm is forecasted, follow all instructions issued by local authorities, in particular evacuation orders. Distance yourself from natural bodies of water and mountainous areas as much as possible as a precaution against floods and landslides.

More generally, flooding and landslides are common following heavy rains, including within Mexico City. Be aware that the risk of contracting water- and mosquito-borne diseases tend to rise after periods of heavy rains. 

Additionally, the south and west of Mexico are located in an active seismic zone. Two powerful earthquakes struck the country in September 2017. An 8.2-magnitude earthquake struck off the southwestern coast in September 2017, causing deaths and major destruction in the states of Oaxaca and Chiapas. This was followed less than two weeks later by a 7.1-magnitude earthquake that struck Mexico City and nearby states (epicenter in Puebla). In total, the earthquakes destroyed some 60,000 buildings, damaged more than 100,000 others, and left nearly 500 dead. These were the most devastating to hit the country since 1985 when an 8.0-magnitude earthquake rocked the capital region, leaving some 10,000 people dead and billions of dollars in damages.

Tsunamis are possible along the Pacific coast in the event of an offshore earthquake.

Mexico is also home to 16 active volcanoes, notably Colima/Volcán de Fuego (485 km [300 mi] west of Mexico City) and Popocatépetl (60 km [40 mi] southeast of Mexico City). Volcanic activity at Popocatépetl sometimes disrupts flights at nearby Puebla International Airport (PBC) and ash can reach as far as Mexico City.

If you plan to visit Mexico, stay informed by the Atlas Nacional de Riesgos.