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[null,"Prepared By:","Contributors:"]
[null,"Basham, Ringe Y Correa, S.C.","Carlos Velazquez de Leon"]
[null,null,"Daniela Sofia Garza Aguirre"]
[]
[]
["Doing Business Latin America"]
[]
["Report Generated: 5/2/2025"]
[]
["View your report results on next tab"]

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["Question","Mexico"]
["Country Overview"]
["Country Overview","Population\nMexico ranks as the 10th most populous country globally, with a population of 126 million, according to the latest figures from the National Institute of Statistics (\"\nINEGI\"). By the close of 2023, the economically active population had expanded to 60.7 million residents.\nLocation\nAccording to INEGI Mexico is located in the south of North America, sharing a border with the United States of America to the north, the Pacific Ocean to the south and west, Guatemala, Belize, and the Caribbean Sea to the southeast, and the Gulf of Mexico to the east. Its 1.973 million square kilometers of extension make Mexico one of the largest Spanish-speaking countries in the world.\nClimate and Ecosystems\nAccording to the National Commission for the Knowledge and Use of Biodiversity (\"\nCONABIO\"), Mexico’s large size and varied geography result in a wide range of climates, from tropical in the south to arid in the north and temperate in the central highlands. The country has distinct seasons, with temperature and rainfall varying by region. Average temperatures range from 28°C (82°F) along the coasts to 16°C (61°F) in the central areas. Mexico’s diverse ecosystems include deserts, forests, and mountains, making it one of the most biodiverse countries, home to nearly 10% of the world’s species.\nInfrastructure\nMexico has initiated several infrastructure projects to improve its transportation network. Key projects include the “Tren Maya”, which aims to connect the main cities in the Yucatan Peninsula, and the “Dos Bocas” refinery project, intended to strengthen energy infrastructure. As well as Felipe Ángeles International Airport which is located in Mexico City and is currently in development although is currently operating. These efforts are part of broader plans to enhance national connectivity and support economic development.\nPorts and Waterways\nUnder the current regulatory framework in Mexico, specifically the Federal Ports Law (Ley de Puertos), any entity intending to develop or operate a port facility, whether for public or private purposes, must submit a port concession application to the Ministry of Marine.\nAirports\nMexico is served by numerous international airports, with significant traffic concentrated at hubs in Mexico City, Cancún, Guadalajara, Monterrey, and Tijuana. Notably, Mexico City has recently opened the Felipe Ángeles International Airport (Aeropuerto Internacional Felipe Ángeles, \"\nAIFA\"). It opened on March 21, 2022, and is located about 45 kilometers (28 miles) north of central Mexico City.\nWater and Sanitation\nIn recent years, Mexico’s government has focused on enhancing water and sanitation infrastructure, prioritizing improvements in coverage and quality. Challenges such as outdated technology and inefficient management have created opportunities for private sector involvement in the construction, operation, and maintenance of water treatment facilities.\nElectricity\nThe electric power supply in Mexico is a public service, with generation, transmission, distribution, and operational control of the National Electric System (\"\nSEN\") considered public utilities. The government prioritizes universal access to electricity to support social and economic development. The \nSEN, serving over 129 million people, is one of the largest integrated electrical systems globally. The Ministry of Energy (\"\nSENER\") ensures continuous and future-proof energy supply by planning with a focus on efficiency, reliability, and sustainability, addressing the country’s growing needs and regional disparities.\nTourism\nAccording to Mexico’s Tourism Ministry In 2023, Mexico registered approximately 39 million international arrivals. The majority of visitors came from the United States, making up about 68% of the total. Significant increases in tourist arrivals were observed from Canada (up 30%), the United Kingdom (up 20%), and Germany (up to 15%). Compared to 2022, international arrivals to Mexico rose by 9% and were about 85% higher than in 2020.\n"]
["Establishing a Business: Cross-Cutting Matters"]
["Companies"," There are different structures that investors may use for investment vehicles in Mexico. They range from setting up or acquiring a Mexican entity, or branch to forming a joint venture or a trust. \n Corporations The General Corporation Law ( Ley General de Sociedades Mercantiles ) recognizes seven types of commercial organizations or structures. However, in daily corporate practice in Mexico, the types of companies most utilized are (a) stock corporations or “Sociedad Anónima” and (b) limited liability companies or “ Sociedad de Responsabilidad Limitada ”. \n Any of these types of companies may be organized with variable capital, which allows the business to alter its capital (the variable portion) with minimum formalities. \n The general main characteristics of these entities are as follows: \n \n Management Mexican entities are legally required to have a management body, which can consist of one or more managers or directors, as well as any number of officers, all of whom can be Mexican nationals or foreigners. \n Partner Liability Liability is limited to the monetary value of the partners’ equity contributions to the entity. \n Minimum Initial Equity There is no statutory minimum equity. \n Partners Mexican entities must have at least two partners (except for the Sociedad por Acciones Simplificada entity, which is a specific structure for very small companies), who may be national or foreign individuals or entities. There is no minimum equity percentage for each partner, any of them can have a nominal interest in the entity solely for compliance purposes. \n \n Stock Corporation or by its Acronym in Spanish (S.A.) The Stock Corporation is one of Mexico’s most used business structures. It operates as a corporation under a company name, and its ownership is represented in the form of shares in the company’s capital. Liability is limited to the monetary value of the shareholders’ contributions to the entity. \n Creating a Stock Corporation requires a minimum of two shareholders and no minimum capital for setting up the company. The authorized capital must be fully subscribed to within one year of the company’s establishment. \n The corporation’s management is entrusted to a sole director or a board of directors and the company must have a statutory auditor. Although this is not required by law, officers may be appointed, which would have the faculties indicated by the shareholders or board of directors. This type of entity has specific requirements that must be complied with under the law, such as holding annual shareholder’s meetings where the financial situation of the company is presented, having certain quorum and notice requirements at meetings and respecting formalities regarding capital variations. This type of entity is intended for companies that have many shareholders and require additional rules on how the company will be managed. Specific rules on the operation of the entity are included in the company’s bylaws. Although the Stock Corporation permits certain flexibility in the rules included in the company’s bylaws, another type of entity the “ Sociedad Anónima Promotora de Inversión ” is the type of entity that permits and regulates additional rights of shareholders such as “tag along” and “drag along” rights. This other type of entity is for companies that are in the process of possibly becoming public companies and thus they are regulated to promote an increase in investments and shareholders. \n Limited Liability Company or by its acronym (S. de R.L.) The Limited Liability Company is formed by members/partners whose obligations are limited to the payment of their contributions to the company’s equity but in which ownership interests cannot be represented by share certificates, either in “registered” or “bearer” form. Such contributions are transferable only in the specific cases provided by the General Corporation Law. \n The main advantages of this type of entity are: (1) being subject to minimal regulations, which facilitates corporate compliance; and (2) the entity may be considered as a pass-through entity for US tax purposes. A limited liability company must have at least two partners but may not have more than 50. The company’s capital must be divided into “parts” or “interests” which may be unequal in value and rights but must always represent one peso or a multiple of such amount. \n This is the type of entity that is most convenient for wholly owned subsidiaries, since these entities have fewer administrative obligations (for example, it is not mandatory to have a statutory auditor), and is intended for it to be used for entities with fewer amount of owners. \n Incorporation Procedure \n In general terms, the process to incorporate any kind of Mexican entity (“ Newco ”) is as follows: \n \n Investor provides information for new entity (name, owners, capital, etc.). \n Authorization to use the Newco ’s corporate name is requested by Mexican authorities, which is granted based on name availability. \n The Newco ’s partners grant special powers of attorney to individuals in Mexico to appear before a Mexican Notary Public to execute the certificate of incorporation. This is the most cumbersome part of the process; below for in-detail explanation. \n Newco ’s bylaws are drafted. \n Newco ’s partners provide beneficial ownership information (discussed in detail below). \n Newco ’s physical place of business is identified (discussed in detail below). \n A certificate of incorporation is issued by Notary Public. \n A certificate of incorporation is recorded in the Public Registry of Commerce. \n Newco obtains its initial registrations:\n \n Tax authorities to obtain Tax ID and official e-signature. ( Newco will require a physical address to complete this step). \n Labor and social security authorities (if it will have employees). \n Foreign Investment Registry (if it has foreign capital). \n State Taxpayer Registration (if it will have employees). \n \n \n \n Upon completion of these steps, the entity exists and has the legal capacity to carry out basic operations (i.e. open bank accounts, hire employees, execute agreements, receive payments, pay taxes, etc.). \n Powers of Attorney for Incorporation In case a Mexican entity has foreign companies as partners or shareholders, these entities will need to grant powers of attorney (\" POA s\") to individuals who will appear before a Mexican Notary Public to execute the certificate of incorporation. \n The specific requirements for the POA s will depend on the identity and nationality of the partners. However, in general terms, the procedure is as follows: \n \n Investors provide basic corporate information of the partners, such as:\n \n Documents evidencing incorporation and good standing, as applicable according to the partners’ local jurisdiction. \n Current bylaws (only applicable if the partner is a company). \n Documents evidencing the authority of the corporate body or officer granting the POA (only applicable if the partner is a company). \n Passport of the partner or legal representative of the partner. \n \n \n A POA is drafted according to the information provided. \n Once reviewed and approved, the POA is executed before a local Notary Public (if applicable) in the place of execution. \n The POA and attachments must be then authenticated and legalized in their place of origin to be valid in Mexico. \n The POA and attachments are translated into Spanish by a Mexican-certified translator and notarized with a Mexican Notary Public. \n The Spanish version of the POA is notarized in Mexico. \n \n Beneficial Owner Information Under regulations recently enacted in Mexico, the partners of any Mexican entity must provide personal information of its beneficial owners, that is, the individuals up the corporate chain who ultimately control and benefit from the business. \n Powers of Attorney in Mexico In Mexico, apparent authority is not recognized, thus powers of attorney must be specifically granted to any individual that will represent a Mexican company. The following are some of the types of POA s that are recognized under Mexican law and regularly granted to employees within an entity: \n \n General Power of Attorney for Acts of Administration. \n Special Power of Attorney for Labor Matters. \n General Power for Litigation and Collections. \n General Power of Attorney for Acts of Ownership. \n Special Power of Attorney for Banking Operations. \n Special Power of Attorney for Exchange Operations. \n Special Power of Attorney to Appear before Authorities. \n \n Each POA may optionally be granted with restrictions to secure proper corporate control of the company. This will depend on the level of authority included in each POA and the level of trust in each attorney-in-fact. Any of these restrictions can be tailor-made to any of the abovementioned types of POA s. "]
["Taxes","The Tax Administration Service (“\nSAT”) is the Mexican governmental agency responsible for collecting taxes in compliance with the country's regulations.\n\n\nFederal Taxes\nThe main taxes applicable to companies in Mexico are the Income Tax and the Value Added Tax.\nCorporate Income Tax (“CIT”)Individuals and legal entities are subject to the payment of \nCIT when: (i) they are Tax Residents of Mexico with respect to their worldwide net income; (ii) they are foreign tax residents with a permanent establishment in Mexico with respect to the income attributable to such permanent establishment; and (iii) they are foreign tax residents with Mexican-sourced income but do not have a permanent establishment in Mexico, or if such income is not attributable to a permanent establishment.\nThe general \nCIT rate is 30% for legal and corporate entities.\nThe gross income of a legal entity resident in Mexico includes all revenues received in cash, in kind, services or credit, including any revenues obtained abroad.\nThe determination of net profits involves subtracting the authorized deductions, as stipulated by law, from the total taxable income earned in the fiscal year. The law allows, among other things the deduction of the sale of goods, expenses, investments and interest.\nDividend Tax\nRegarding the distribution of dividends, there are two different taxes to be considered:\nCorporate Dividend Tax\nDividends from profits already taxed at the corporate level are tax-free in México from the corporate dividend tax. For this purpose, companies should create an “after-tax profits account” or “Cuenta de Utilidad Fiscal Neta” (“\nCUFIN”).\nIf the dividends do not come from the \nCUFIN, the corresponding \nCIT on that dividend must be paid. For this purpose, the paid dividend will be multiplied by the factor of 1.4286, and the result thereof shall be multiplied by the rate of 30%.\nThe payment shall be definitive and shall be made no later than o17 day of the month immediately following that in which dividends or profits are paid.\nSuch tax can be used as a credit to offset the legal entity´s income tax for the fiscal year in which the tax is paid or in the immediately following two years to offset the annual tax and the monthly payments of estimated income tax of those years\nIndividuals or Foreign Residents Dividend Tax\nA 10% withholding tax applies to dividends paid to individuals or foreign residents.\nValue Added Tax (“VAT”)VAT is imposed on (i) the sale of goods, (ii) the provision of independent services within Mexico, (iii) the importation of goods and services, and (iv) the temporary use or enjoyment of goods within Mexican territory.\nThe general rate is 16% of the value of the subject matter transaction. A 0% rate applies in certain limited cases, mainly related to the exportation of goods and services.\nThe \nVAT is paid to Tax Authorities on a monthly basis through a tax declaration. It differs from the \nCIT in the sense that \nVAT is only paid on a monthly basis without the need for an annual declaration.\n\n\nTax Considerations for Opening a Business in Mexico \n\nApplying to the Federal Taxpayers Registry (“RFC”)Registering with the \nRFC is a legal obligation. The \nRFC is a precise alphanumeric code assigned to every individual and legal entity in the country. Obtaining one allows Mexican authorities to track and monitor taxpayers' activities and ensures efficient tax administration and enforcement.\nElectronic Signatures, Digital Seal Certificates and the Issuance of Digital ReceiptsThe E. signature, also known as (\"\nFIEL\"), is a collection of files issued by the \nSAT that, when used together, work as an electronic signature. Having an E. signature allows companies to use \nSAT’s webpage to obtain a digital seal certificate.\nA company will have to acquire a certificate for the use of digital seals which will in turn be used for the issuance of digital tax receipts. The digital seal will authenticate the authorship of the digital tax receipts issued by individuals and legal entities over the Internet.\nWhen tax laws require the issuance of tax receipts for transactions, activities, income received, or tax withholdings, taxpayers must issue these receipts as digital documents through SAT´s website.\nOpening Notice (“Aviso de Apertura”)The\n Opening Notice is a mandatory notice under \nArticle 29 of Mexico’s Regulation of the \nFederal Tax Code. It must be filed by the end of the first month of operations and allows for Tax Authorities to monitor the economic activity and location of businesses.\n"]
["Labor"," The Federal Labor Law regulates employment relationships in Mexico. It applies to all individuals rendering subordinated services anywhere in the Mexican Republic (both Mexican and foreign nationals), and Mexican nationals in Mexico hired to perform personal services abroad. \n The law provides two general types of employment relationships: individual and collective. An individual employment relationship is created upon a person being hired to render services in a subordinated position, whether on a temporary, task-specific, season, initial training, or permanent basis. Collective employment relationships are established when the employees are organized representing their interests before the employer. \n Individual Employment Relationship In Mexico, an employment relationship is deemed to exist, even without a contract or formal offer, under any arrangement or understanding where an individual has the obligation of performing personal subordinated services. \n Employment in Mexico is presumed to be permanent, except in certain cases where temporary employment is justified, such as seasonal engagements or covering for temporary absences, among others. Specific instances where non-permanent employment is permitted must be confirmed case-by-case. As such, employment-at-will does not exist in Mexico. \n Statutory Non-Waivable Employee Benefits The following are the minimum, non-waivable benefits that must be provided by the employer to all its union and non-union personnel from the moment of employment: \n \n Minimum Wage The law mandates payment of a minimum wage payable weekly to all employees in cash, without deductions or withholding (with certain limited exceptions). The current general minimum wage in 2024 is $248.83 pesos per day for all of the Mexican Republic, except for regions bordering the US, which have a minimum wage of $374.89 pesos per day. \n Maximum Work Shift and Overtime Pay The maximum daily and weekly hours an employee may be required to work without overtime pay, is:\n \n Day Shift (6 A.M. to 8 P.M.) - 48 hours per week. \n Night Shift (8 P.M. to 6 A.M.) - 42 hours per week. \n Mixed Shift (shifts overlapping day and night shifts with no more than 3½ night hours per day; shifts exceeding 3½ night hours are deemed night shifts) - 45 hours per week. Companies must pay overtime for work performed exceeding the maximum hours for a shift. For the first 9 hours of overtime per week, 200% of the base wage must be paid. Overtime exceeding 9 hours per week is paid at 300% of base wage. \n \n \n \n \n Weekly Rest Day and National Holidays An employee is entitled to at least one full day of paid rest per week, Sunday being the legally preferred day of rest. Work performed on a Sunday is subject to a 25% premium over the normal daily wage if the employer and employee agree to have a different weekly rest day. Employees who work on their weekly rest day are entitled to double pay. Employees may enjoy the following legally mandated paid holidays: (a) January 1; (b) the first Monday of February; (c) the third Monday of March; (d) May 1; (e) September 16; (f) the third Monday of November; (g) December 25; (h) Presidential Inauguration Day; and (i) election days. Employees working on public holidays are entitled to triple pay. \n Vacation and Vacation Premium Employees are entitled to the following days of paid vacation for a full year of services. Vacation Days Awarded Based on Years of Seniority: \n \n \n \n \n 1 year = 12 days \n 2 years = 14 days \n 3 years = 16 days \n 4 years = 18 days \n 5 years = 20 days \n 6-10 years = 22 days *2 additional days accrued per five years of rendered services* Employees are also entitled to a vacation premium of 25% over their normal salary during their vacation period. \n \n \n Year-End (Christmas) Bonus: Employees are entitled to an annual year-end bonus of fifteen days of wages. This bonus is payable before December 20 of each year. \n Profit Sharing Employees are entitled to a pro-rata portion of 10% of their employer’s fiscal year pre-tax profit. 50% of the distributable amount is divided in proportion to the number of days worked during the employer’s fiscal year by each employee, and the other 50% is divided based on each employee’s wage. Payment of the distributable amount must be made within the 60 days immediately following the date for filing the employer’s year-end income tax return. Payment of profit sharing is capped at the highest of: (a) the average payment of the past three years; or (b) 3 months of the employee’s base salary. \n Health and Safety Employers must provide a safe and healthy working environment. A Health and Safety Commission consisting of representatives of the employer and employees must be established to investigate the causes of work-related illnesses or accidents and to propose means to avoid them. \n Paid Maternity/Paternity Leave Pregnant employees are entitled to 6 weeks of paid maternity leave prior to the approximate delivery date and 6 weeks thereafter. During the leave period, provided the employee has been properly registered with the Mexican Social Security Institute, the latter covers all maternity expenses and the employee’s compensation during the leave periods. Likewise, male employees have 5 business days of paid paternity leave. \n Social Security Benefits Employers are legally required to enroll all employees with the Mexican Social Security Institute (Instituto Mexicano del Seguro Social - “ IMSS ”). Both employer and employee are then required to pay contributions to IMSS , which are based on the employee’s consolidated daily wage, capped to a certain amount. Likewise, contributions are calculated based on the risk that the employees are exposed to as a result of their employment; higher-risk activities trigger a higher contribution. Benefits arising from enrollment with IMSS include:\n \n Medical care insurance. \n Maternity insurance. \n Pension for non-occupational illness. \n Severance and pension for occupational illness and accidents. \n Retirement pension. \n Death benefits (caused by work and unrelated causes). \n Childcare benefits. \n Widowhood pension. Medical expenses are conveyed to the employer. \n \n \n \n Mandatory Employee Housing Fund (“INFONAVIT”) INFONAVIT is a government agency charged with operating housing funds for employees. Employers are obligated to make bimonthly contributions to INFONAVIT at 5% of the consolidated daily wage (with certain exceptions) of each employee. \n If an employee obtains a loan from INFONAVIT for the purchase of a residence, the employer must withhold from the employee’s compensation the required installments under such loan. \n Retirement Savings System (“SAR”) SAR is a government agency charged with operating retirement funds for employees. Employers must make bimonthly contributions to SAR computed at 2% of the consolidated daily wage of each employee capped to a certain amount. \n Mandatory enrollment to Workers’ Personal Consumption Fund (“INFONACOT”) INFONACOT is a Mexican government institution that provides financial support to workers for personal consumption. Its mission is to offer accessible credit options to employees across various sectors, enabling them to acquire goods and services that enhance their quality of life. Employers are required to enroll in INFONACOT ’s program, which allows employees to access payroll-deducted loans. \n Termination of Employment and Severance Payments Employment may be terminated without liability only under specific termination causes provided under law, except for employees in management positions who may be terminated for “loss of trust” when there are reasonable grounds for it. \n Mexican labor law tends to be highly protective of employees. As a result, regardless of the existence of a justified termination cause, employee terminations must be carried out according to certain procedures and formalities in order to be considered justified. Likewise, the employer must have proper evidence of the termination cause. If such procedures and formalities are not followed, or the justified cause is unable to be proven, the termination is deemed unjustified. We do not recommend terminating a Mexican employee without counsel from our specialists. \n Collective Labor Relationships A collective relationship exists when the workforce is organized under a union and a collective bargaining agreement has been entered into between such union and one or more employers or employer associations. \n All unions must obtain a representation certificate to enter into a collective bargaining agreement. Representation certificates are granted by labor authorities and are valid for up to six months. \n Two unions can file a request for the representation certificate. The union with the most votes will be the one to bargain and enter into a collective bargaining agreement with the employer. The collective bargaining agreement must be legitimized. \n Collective bargaining agreements and their revisions must be registered with labor authorities. A collective bargain relationship can also be terminated only for specific reasons, as the termination of an individual labor agreement "]
["Foreign Exchange and International Investment Regime","Not applicable.\n"]
["Establishing a Business: Specific Matters"]
["Customs"," Customs and Trade Mexico’s trade agreements and memberships with organizations like the WTO, APEC, G-20, OECD, USMCA, TPP, and Pacific Alliance have significantly reduced tariffs and trade barriers with numerous developed countries. Companies involved in foreign trade must obtain a General Importers Registry and, if handling sensitive materials, a Specific Sectors Importer Registry. They must also use authorized customs brokers for import operations, who are limited to four customs ports. Compliance with the Harmonized System for tariff and non-tariff regulations is required, and imports are subject to a 16% VAT, which can be credited or refunded. Mexico also offers promotion programs to lower import duties on raw materials and streamline administrative processes for export-oriented businesses. \n IMMEX Program The IMMEX Program , authorized by the Ministry of Economy, allows companies to temporarily import goods, like raw materials, for use in manufacturing in Mexico, with the condition that the finished products are either exported, transferred to another IMMEX -authorized company, or changed to definitive status with duty payment. Maquila Companies under this program can defer import duties and enjoy other benefits if their goods are intended for export. However, they must undergo regulatory audits, maintain detailed records, and have robust inventory controls. Companies should evaluate their sourcing and operational models before applying for IMMEX authorization to ensure its feasibility. \n VAT and Excise Tax Certification VAT and Excise Tax Certification provides Maquila Companies with a 100% credit on VAT and Excise Tax for temporary imports. The benefits and terms of the certification depend on the company’s operational history, the number of employees, and the frequency of temporary imports that are exported. The certification uses a three-tier rating system: \n \n “A” Certification Offers immediate VAT credit for temporary imports, valid for one year with renewal possible. \n “AA” Certification Provides immediate VAT credit, allows 30 days to correct any tax or customs irregularities, valid for two years with renewal. \n “AAA” Certification Includes immediate VAT credit, a 60-day correction period, an \"invitation letter\" for self-correction before an audit, the option to file consolidated customs declarations monthly, and customs clearance from the company’s domicile. This certification is valid for three years with renewal. Companies should assess their operational models and other factors to determine the feasibility of obtaining this certification. \n \n PROSEC The PROSEC Program allows companies that produce or manufacture goods of certain industrial sectors, to import goods, machinery, and/or equipment to be used in their productive process with a preferential ad-valorem tariff or duty, regardless of whether the finished goods are destinated to be exported or for the domestic market. The medical equipment industry is part of the sectors covered by PROSEC . However, the specific items to be imported and manufactured need to be reviewed in order to confirm eligibility. \n Local and Tax Incentives Local governments in Mexico can provide various tax incentives, such as reductions on property and payroll taxes, financial assistance with startup costs like street pavement, water and electricity installations, and discounts on government property purchases. Additionally, the Mexican federal government has recently introduced new Income Tax and VAT incentives specifically for businesses operating in the northern border region, a key area for cross-border transactions with the United States. These incentives include a reduction in the Income Tax rate from 30% to 20% and a decrease in VAT from 16% to 8%, subject to certain conditions being met. These measures are designed to boost economic activity and attract investment in the strategically important border area. "]
["Migration"," According to the Mexican Immigration Act , a foreign national can enter Mexico temporarily to perform a gainful or non-gainful activity, as long as it is legal, and falls under one of the following general conditions: \n \n When the foreign national is planning to live during his/her stay, with resources brought from abroad. \n When his/her purpose is analyzing investment alternatives. \n When she/he performs scientific, artistic, technical, advising or sports activities, including human rights observation and election processes. \n When she/he pretends to occupy confidential employee positions. \n When she/he pretends to attend Board of Directors meetings and assemblies. \n Any other legal activity. \n \n Foreign nationals may enter Mexico either temporarily to conduct business or to live and work, provided they are in possession of the appropriate visa and/or immigration document authorizing the activities that they will carry out while in Mexico. It is also important to bear in mind the substantial discretion that Mexican immigration authorities have in applying immigration law and regulations, and the information provided below should be viewed with this limitation in mind. \n Temporary Visitor Visa Citizens of countries that the Department of the Interior, in coordination with the National Immigration Institute, considers as “unrestricted entrance nationalities” do not require a previous visa to enter the country as tourists or business persons, provided that their stay in the country does not exceed 180 calendar days. \n On the other hand, individuals holding a restricted nationality must request a visa at a Mexican Consulate, prior to their trip to Mexico. \n In general terms, this type of visa is valid for a maximum period of 180 calendar days following the entry date into the country and in specific cases, may be granted for up to 10 years. The 10-year visa may be granted to foreign nationals in any of the following situations, among others: (a) frequent traveler; (b) economically solvent person; (c) permanent supervisor of a foreign company having an affiliate in Mexico; (d) executive of an affiliate or business office of Mexican company abroad, or (e) person holding an invitation from a public or private entity or a government or private institution to participate in non-gainful activities in the country. \n Moreover, the visa allows the foreign national to attend conferences and seminars; hold business meetings with private institutions, individuals, employees or representatives from Mexican or foreign companies, seeking for investment opportunities or potential clients; advise and consult colleagues on specific projects and provide training, conduct interviews and negotiation of deals and agreements. \n Temporary Resident Visa This visa allows the holder to reside in the country for a minimum period of 180 calendar days and a maximum of four years. The foreign individual must be sponsored by a Mexican or foreign entity, or a government or private institution in order to render services in Mexico. It is of the utmost importance to determine whether the foreign individual will perform the activities under the wing and subordination of a foreign or local company since such circumstances will trigger labor, social security, tax and immigration implications both for the company and the foreign individual. \n Permanent Resident Visa This visa allows the holder to reside in Mexico for an indefinite period of time and has the Mexico. The holder ought to maintain a regular temporary immigration status for four consecutive years, or by having family ties in Mexico (Mexican spouse, children, etc.). "]
["Environmental","The regulatory framework governing environmental matters in Mexico encompasses a complex system of federal and local regulations, posing compliance challenges that could result in penalties for non-compliance.\nEach state in Mexico has jurisdiction over environmental regulations within its territory. They enact laws, regulations, and local standards enforcing environmental matters within their jurisdiction.\nEnvironmental disputes are typically resolved in judicial and administrative courts specializing in environmental cases.\nThe Environmental Protection and Natural Resources Department (“SEMARNAT”) \nSpearheads federal environmental policy and issues permits for projects under federal jurisdiction, except in the hydrocarbon industry. It is supported by agencies such as:\nThe Federal Environmental Protection Agency (“PROFEPA”)\nResponsible for enforcing federal environmental regulations, conducting inspections, and audits, and imposing administrative sanctions.\nThe National Water Commission (“CONAGUA”)\nManages national water resources, grants authorizations for water use, and oversees activities related to water bodies. The National Agency for Industrial Safety and Environmental Protection in the Hydrocarbon Industry (“\nASEA”) regulates and supervises safety and environmental policies within the hydrocarbon industry.\nProjects in Mexico require several federal and local permits, licenses, and approvals related to environmental matters. Common authorizations include Environmental Impact and Risk Authorizations, Operating Licenses, and Wastewater Discharge Permits, among others.\n"]
["Real Estate","The \nMexican Federal Civil Code (“\nCódigo Civil Federal”) provides that the sale of real property must be formalized in writing before a notary public. Consequently, adherence to this formality is requisite for any real property transaction. Additionally, the public deed transferring title to real property requires registration with the Public Registry of Property of the State where the real property is located; otherwise, the sale will not be effective concerning third parties.\nIt is important to point out that federal law also provides that the offices of the Public Registry of Property are to be located in the seats of the judicial districts of each Mexican state. As a result, there is not a singular federal Public Registry of Property; instead, there are numerous offices around the country where real property and related matters are recorded.\nGiven these considerations, a search in the Public Registry of Property is a crucial step in the due diligence review before acquiring any real estate property. As all real property must be registered before the corresponding Public Registry of Property, the latter is responsible for providing information on the status of the property in question, this includes, without limitation any guarantees, liens or mortgages that may impact the property. With respect to the leasing of industrial real estate, careful consideration of local practices and legal requirements is essential, as these may vary depending on the property’s location. Key factors include the need for the placement of insurance and bonds, along with the payment of a rent deposit, and compliance with other applicable local dispositions. Some local regulations may mandate the registration of lease agreements, as well as obtaining operation permits. Successfully navigating his process hinges on a comprehensive understanding and strict adherence to the distinct requirements of the respective locality.\n"]
["Intellectual Property","Trademarks\nIn Mexico, a trademark is any symbol perceptible through the senses that distinguishes products or services within the same category. This encompasses wordmarks (words/numbers), design marks (non-word elements), three-dimensional marks (like packaging), sounds, scents, holograms, trade dresses, or composite marks (combinations). Exclusivity is obtained through registration with the Mexican Industrial Property Institute (“\nInstituto Mexicano de Propiedad Industrial”). The registration process involves filing a written application, which is reviewed for formal and novelty criteria under the \nFederal Law for the Protection of Industrial Property (“\nLey Federal de Protección a la Propiedad Industrial” or “\nFLPIP”). Third parties can oppose the registration, and any issues raised must be addressed within approximately four months.\nTypically, registration for national applications takes 4-6 months, while international designations may take up to 18 months. If issues arise, the process can extend by up to a year and a half. Mexico, a member of the \nParis Convention for the Protection of Industrial Property, allows applicants to claim priority if the same mark was filed in other convention countries within six months. Priority is based on the foreign application’s filing date, office, and serial number, and applies only to the products or services specified in the foreign application. The IMPI issues a registration certificate as proof, valid for ten years for national marks and according to the international renewal date for international marks.\nTo maintain trademark rights, use must be declared within three months of the third anniversary of registration. For instance, a trademark registered on November 6, 2023, must declare use between November 6, 2026, and February 6, 2027. Failure to declare use will result in loss of protection for unused items. National trademarks must be renewed six months before expiration with a statement of use, listing used products or services. For international marks, use must be declared within three months after renewal notification by WIPO. Registrations may lapse if not renewed or if use is not declared. Additionally, trademarks are vulnerable to cancellation for lack of use after three years, so regular use and enforcement are crucial.\nSlogans and Trade Names\nUnder the \nFLPIP, slogans are phrases used to promote products, services, or establishments and are protected through registration with the \nIMPI, following the same process as trademarks. Trade names, that identify an establishment, are protected in their “effective zone of clientele” without needing registration, though registering with the \nIMPI can establish good faith. Trade names are less commonly used today, as service marks offer broader protection across the entire country, making trademark registration generally a more effective option for protection.\nLicensing of Industrial Property Rights\nThe owner of a trademark may issue licenses to authorize its use to third parties. The license can be recorded with the \nIMPI. A recorded license has effects against third parties such as creditors, assignees or heirs of the parties. Although it is optional, recording a license can be very helpful in defending a registration from a challenge for lack of use.\nPatents, Utility Models, and Industrial Designs\nIn Mexico, inventions are defined as human creations that transform matter or energy for practical use, and may be patented if they are new, involve inventive activity, and are capable of industrial exploitation. However, certain items are excluded from patent protection, such as discoveries, theoretical principles, aesthetic creations, and biological or genetic material found in nature. An invention must be novel, meaning it must not be part of the “state of the art”, which includes all publicly available technical information. If disclosed, the invention must be filed for patent within twelve months to retain its novelty.\nA patent grants exclusive rights to an invention for twenty years from the filing date. This allows the patent holder to control the use, manufacture, sale, or import of the invention, though exceptions exist for academic research and rights exhaustion after the first sale. To obtain a patent, the applicant must submit a detailed application with the invention's description, drawings, and claims. The Mexican Industrial Property Institute (\"\nIMPI\") then examines the application to ensure it meets all requirements, issuing up to four substantive official actions if necessary.\nUtility models and industrial designs are additional intellectual property protections in Mexico. Utility models, which involve modifications to objects that improve their functionality, provide a fifteen-year right of exclusive use from the application date. Industrial designs, which encompass new aesthetic qualities of products, include industrial pictures and models and can be protected for up to twenty-five years from the filing date. Both utility models and industrial designs follow a registration process similar to patents.\nIndustrial Secrets\nIndustrial secrets are confidential commercial or industrial information that provides a competitive advantage and is protected by the owner’s efforts to maintain its secrecy. This information must be documented in physical or electronic formats, and information in the public domain cannot qualify as an industrial secret. Unauthorized disclosure or misappropriation of industrial secrets is typically a criminal offense, making confidentiality clauses and non-disclosure agreements essential for safeguarding such information. Implementing robust confidentiality policies and systems is crucial to demonstrate the protection of industrial secrets.\nIndustrial secrets do not require formal registration or acts from authorities for protection, as long as the confidentiality criteria are met. Employers hiring individuals to access a third party’s industrial secrets may be jointly liable for any misuse or unauthorized disclosure. In legal proceedings involving industrial secrets, judges and officials must ensure the secrecy of the information, with strict restrictions on its use or disclosure by involved parties. Misappropriation claims are not valid if the information was independently discovered, derived from publicly available products, or lawfully obtained from a source without confidentiality obligations.\nImage Rights\nIn Mexico, individuals have the exclusive right to authorize the use of their personal image, which applies universally and does not depend on the individual’s fame or public relevance. This right lasts for the individual's lifetime plus 50 years after their death. Authorization can be revoked at any time unless it was granted in exchange for payment. Courts have determined that such authorization must be specific, and any use beyond what was expressly permitted is not allowed. This right covers various forms of depiction, including photographs, videos, drawings, paintings, and impersonations.\nUnauthorized use of an individual's image can lead to legal action, either through infringement proceedings with the Mexican Institute of Industrial Property (\"\nIMPI\") or civil claims for damages before a civil judge. Additionally, for images used in advertising, authorization is valid for no more than three years. After this period, new permission must be obtained for continued use of the image in advertising contexts.\nEnforcement\nThe \nFederal Law for the Protection of Industrial Property offers extensive protection for intellectual property rights, ensuring that enforcement is both efficient and swift. Under this law, patents are safeguarded for twenty years, while trademarks receive protection for ten years. Additionally, trade secrets are protected, with their unauthorized disclosure considered a criminal offense punishable by two to six years in prison. This law imposes stringent penalties for unfair competition and intellectual property violations. To promptly address infringements, the law allows for the immediate seizure of goods without needing prior decisions from the Institute or investigations by the public prosecutor, with such actions managed directly by the Mexican Institute of Industrial Property (\"\nIMPI\").\n"]
["Consumer","The Federal Consumer Protection Agency (“\nPROFECO”) in Mexico is dedicated to safeguarding consumer rights and ensuring fair market practices. Under the \nFederal Consumer Protection Law, consumers are entitled to clear and accurate information about products and services, safety, fair treatment, complaint resolution, and privacy protection. \nPROFECO helps consumers by investigating complaints, mediating disputes, and enforcing regulations to ensure that businesses adhere to these rights.\nProviders in Mexico must comply with several key obligations, including offering truthful information, maintaining quality and safety standards, engaging in fair business practices, and respecting consumer rights to refunds or repairs. They are also required to protect consumers' personal data. \nPROFECO enforces these obligations, ensuring that businesses operate transparently and address consumer issues promptly.\n"]
["Compliance","Not applicable.\n"]
["Personal Data","The \nData Protection Law has the purpose of regulating the legitimate, controlled, and informed processing of personal data and of ensuring the right to privacy and the right to informational self-determination of individuals, and it applies to all individuals or private legal entities that process personal data, except (i) credit bureaus that are governed by the\n Credit Information Companies Act and other applicable laws, and (ii) individuals carrying out the collection and storage of personal data exclusively for personal use, without purposes of disclosure or commercial use.\n“Personal Data” is defined as all information concerning an identified or identifiable individual, whereas “Sensitive Personal Data” is personal data that refers to the most intimate areas of a data subject’s life or which misuse might lead to discrimination or involve a severe risk to the data subject. In particular, data that may reveal racial or ethnic origin, present and future health condition, genetic information, religious, philosophical, and moral beliefs, union membership, political views, and sexual orientation. “Processing” is the collection, use, disclosure, or storage of personal data. Use covers any action of access, management, exploitation, transfer, or disposal of personal data.\nSome of the essential obligations established by the \nData Protection Law about the processing of personal data are (i) the making available of a privacy notice to all data subjects (clients/ consumers, employees, Internet users, etc.) before the processing of their data; (ii) collecting consent from data subjects for the processing of their data; (iii) maintaining physical, organizational and technological security measures to protect personal data against unlawful processing, disclosure or access; (iv) transferring personal data in compliance with applicable requirements; and (v) appointing a person or department of Personal Data.\nThe Data Protection Authority, i.e., the National Institute of Transparency, Access to Information and Protection of Personal Data (“\nINAI”), is responsible for the enforcement of the \nData Protection Law, either acting ex officio or upon a complaint from the data subject.\nFailure to comply with the \nData Protection Law may result in fines of up to 320,000 days of the minimum wage in Mexico City. and up to five years of imprisonment. If sanctions are imposed due to failure to comply with the \nData Protection Law when processing sensitive personal data, fines and criminal penalties may double.\n"]
["Antitrust","The \nFederal Antitrust Law is intended to promote free competition. It regulates concentrations and absolute and relative monopolistic practices similarly to antitrust law in the United States, upon which Mexico’s antitrust law is based.\nThe Commission may penalize concentrations and monopolistic practices as follows: (i) order the suspension, alteration, or ending of a concentration or monopolistic practice; (ii) order the reverse, partially or totally, of a concentration; (iii) levy fines on those engaging in prohibited activities.\n"]
["Infrastructure and Public Utilities","Infrastructure is an essential axis for boosting a country’s growth. Infrastructure projects include works and projects in areas such as transportation (airports, roads, ports, railroads), energy (electricity, renewable energy, mining, oil and gas), real estate developments (hotels, housing, commercial) and social developments (water treatment plants, aqueducts, energy projects, social rehabilitation centers, hospitals, schools), among others.\nThe Mexican government has prioritized infrastructure development as a key component of its economic strategy. Recent investments focus on modernizing transportation networks, expanding energy infrastructure, and improving digital connectivity.\nPublic-Private Partnerships (“\nPPPs”) are used in Mexico to leverage private sector expertise and investment in infrastructure. The \nPublic-Private Partnership Law governs these arrangements, outlining the processes for project planning, risk allocation, and contractual obligations. \nPPPs are used in various sectors.\n\nState and municipal governments play a significant role in local infrastructure projects, including urban development, local transportation, and public utilities. They are responsible for obtaining permits, land use planning, and enforcing local regulations.\nMexico's infrastructure sector is governed by a complex legal framework designed to ensure efficient, transparent, and sustainable development. The interplay between federal, state, and municipal regulations, coupled with ongoing reforms and the emphasis on public-private partnerships, shapes the landscape of infrastructure development in the country. As Mexico continues to invest in and modernize its infrastructure, adherence to legal standards and effective governance will be crucial for achieving long-term economic and social benefits.\n"]
["Termination of a Business "]
["Voluntary Liquidation","Dissolution and Liquidation\nIn Mexico companies may be dissolved for various reasons, including a unanimous or majority decision by the shareholders, as specified in the company’s bylaws. Other reasons for dissolution include the expiration of the term established in the company’s articles of incorporation, the impossibility of achieving the corporate purpose, or if the company merges or splits into separate entities. Additionally, a company may be dissolved if it is declared bankrupt.\nTo formalize the dissolution, the shareholders must agree on the dissolution. This act must then be registered with the Public Registry of Commerce to ensure that the dissolution is effective and recognized by third parties. This registration makes the dissolution publicly known and starts the legal process of liquidating the company's assets and settling its obligations.\nFollowing the dissolution, the next step involves appointing one or more liquidators. These individuals are responsible for managing the process of winding down the company’s operations, settling its debts, and distributing its remaining assets\nThe liquidator must notify creditors of the dissolution and open a period during which claims can be submitted. An inventory and final balance sheet of the company must be prepared, showing all assets and liabilities. Debts and financial obligations, including taxes, must be settled before distributing any remaining assets to the shareholders. Once these steps are completed, the liquidator prepares a final liquidation report, which is then registered with the Public Registry of Commerce and used to cancel the company’s registration. Additionally, the company must inform the tax authorities (\"\nSAT\") of the dissolution and liquidation.\n"]
["Insolvency and Bankruptcy Regime"," Bankruptcy Procedure Insolvency in Mexico is regulated by “ Ley de Concursos Mercantiles ” (“ LCM ”). The main benefit of the insolvency proceeding is to allow the debtors that have incurred a general inability of their obligations to comply with their payment and negotiate with their creditors an agreement in order to continue with the ordinary course of business and generate resources to repay their debts, and in the event of bankruptcy to make payments to creditors with the debtor’s estate, if possible, under its particular situation. \n According to LCM , insolvency proceedings can be initiated either by the debtor, debtor’s creditors (including Tax Authorities), or Attorney General Office (“ Ministerio Público ”), based on the debtor's current or potential (understood as to happen within the following ninety days of the petition) general inability to comply with its payment obligations. Under LCM , a general inability occurs when the debtor is in default of payment obligations of two or more different creditors, provided that: \n \n The unpaid obligations represent thirty-five percent or more of the debtor’s total payment commitments on the date on which the request for insolvency is filed. \n The debtor does not have enough assets to cover, at least, eighty percent of its due and payable obligations. Such assets are: i) cash and deposits payable on demand; ii) investments payable within ninety days following the date of filing for insolvency; iii) accounts receivable payable within ninety days following the date of filing; and iv) securities that can be sold within thirty business days from the date of filing for insolvency. \n \n In the event that the company has more than two creditors and the requirements set forth in letters a) and b) are met, a request for insolvency can be filed before a Federal Court. "]