Article 17 of the Foreign Investment Law sets forth that both foreign legal entities that intend to habitually carry out acts of commerce in Mexico and foreign legal entities of private nature that intend to establish in the country and which are not regulated by special laws, shall obtain authorization from the Ministry of Economy.
In August 2012 and May 2014, general resolutions were published in the Federal Official Gazette setting forth criteria to exempt certain foreign entities from the obligation to obtain the authorization referred to in the preceding paragraph from the Ministry of Economy, if they were incorporated pursuant to the laws of countries: (i) with which Mexico has entered into a free trade agreement with an investment chapter; or (ii) Members of the World Trade Organization in application of the principle of national treatment included in the General Agreement on Trade in Services entered into within the framework of such Organization;
In compliance with the above-mentioned resolutions, on March 25, 2020, a general resolution was published in the Federal Official Gazette, by virtue of which the application of the aforementioned exemption was acknowledged to foreign legal entities incorporated in accordance with the laws of the following countries.
a. United States of America, Canada, Republic of Chile, Republic of Costa Rica, Republic of Colombia, Republic of Nicaragua, Republic of El Salvador, Republic of Guatemala, Republic of Honduras, Oriental Republic of Uruguay, Japan, Republic of Peru, Republic of Panama, Australia, New Zealand, Republic of Singapore and the Socialist Republic of Vietnam; and
b. Members of the World Trade Organization and those that join said Organization subsequently. you will be able to review the list of said WTO Members.
Please keep in mind that to benefit from the relevant exception, a written under oath statement shall be filed before the Ministry of Economy through which the representative of the legal entity represents the following: (i) that its by-laws and other organizational documents are not contrary to the public order, and it shall provide the principal activity it intends to carry out in Mexico; (ii) that it has been incorporated or organized pursuant to the laws of its country of origin; (iii) in the case of foreign entities that intend to habitually carry out acts of commerce in the country, that such entities will be established in Mexico or will have an agency or branch in Mexico, and they shall provide the corresponding domicile; and (iv) in the case of foreign legal entities of a private nature that intend to be establishes in the country and that are not regulated by special laws, that such persons will have a representative domiciled in the place where they will operate, authorized to respond to the obligations that they contract, and shall provide the corresponding name and domicile.
Finally, please note that the relevant legal entities can be registered in the Public Registry of Commerce in Mexico by filing the document mentioned in the preceding paragraph with the relevant folio assigned to them by the Ministry of Economy.
If you have any questions or comments about this communication, please do not hesitate to contact any of our partners or associates.
Cannizzo, Ortiz y Asociados, S.C.