New Rules in Mexico for Foreign Companies

Alfonso Romo, the Mexican President´s Chief of Staff, stated that the world situation due to the coronavirus pandemic could be used to attract foreign investment, based on the difficulties suffered by Asia, mainly China, to supply the international market.

In order to facilitate the establishment of foreign legal entities in Mexico to provide a service, the National Commission on Foreign Investments has deemed convenient to update and simplify the pertinent regulations. On March 25, 2020, the National Commission on Foreign Investments issued a general resolution expanding the possibilities for foreign legal entities to regularly carry out acts of commerce in Mexico or for their establishment.

According to the Foreign Investment Law, foreign legal entities that intend to regularly carry out acts of commerce in Mexico, or those foreign corporations regulated by the Civil Code, must obtain authorization from the Department of Economy for such purposes.

Pursuant to the recently issued general resolution, foreign legal entities satisfying certain presumptions shall be exempt from the authorization established in the Foreign Investment Law, provided that they file a document under affirmation stating that:

1.  Their articles of incorporation and other incorporation documents do not violate public order, and the main activity they intend to conduct must be reported;

2. They have been incorporated under the laws of their country of origin;

3. In the event that such entities are to be established in Mexico, they must provide the address of their agency or branch to be established;

4.  In case they are regulated by the Civil Code, they must specify the name of the representative authorized to comply with the obligations and the address of the place of operations.

Please feel free to contact us if you have any further questions about whether a company can enjoy the benefits of the above resolution, or the manner to conduct the necessary proceedings.