Mexico
Mexico is a developing country, ranking 74th on the Human Development Index, but has the world's 15th-largest economy by nominal GDP and the 11th-largest by PPP, with the United States being its largest economic partner. Its large economy and population, global cultural influence, and steady democratization make Mexico a regional and middle power; it is often identified as an emerging power but is considered a newly industrialized state by several analysts. However, the country continues to struggle with social inequality, poverty and extensive crime. It ranks poorly on the Global Peace Index, due in large part to ongoing conflict between the government and drug trafficking syndicates, violently competing for the US market and trade routes. This "drug war" has led to over 120,000 deaths since 2006.
Mexico ranks first in the Americas and seventh in the world for the number of UNESCO World Heritage Sites. It is also one of the world's 17 megadiverse countries, ranking fifth in natural biodiversity. Mexico's rich cultural and biological heritage, as well as varied climate and geography, makes it a major tourist destination Mexico is a member of United Nations, the G20, the Organisation for Economic Co-operation and Development (OECD), the World Trade Organization (WTO), the Asia-Pacific Economic Cooperation forum, the Organization of American States, Community of Latin American and Caribbean States, and the Organization of Ibero-American States.
Mexico has a mixed economy. Private enterprise is the principal factor in manufacturing, mining, commerce, entertainment, and the service industries, including construction and tourism. During the 80´s and 90´s the government sold to private enterprise a number of its holdings in what are classified as non-strategic industries. Foreign investment is found most frequently in the manufacturing, mining and financial sectors.
The economy is fairly broad-based and dedicated mainly to supplying the needs of the large and rapidly increasing population. However, proximity to the United States also provides a large market for the export of manufactured and semi-manufactured goods, as well as substantial income from foreign tourists. Federal taxes on oil production and export provide a substantial portion of the total resources of the federal government.
Mexico has an effective financial system that privileges consumption capacity and investment. The Mexican financial system has a capitalization ratio that exceeds international standards, and is regulated under a modern legal framework that includes best practices in terms of prudential standards, risks, accounting and corporate governance. In 2013 Mexico implemented in advance Basel III regulatory framework to consolidate its financial system regulation, supervision and risk management, and is considered as one of the most solid financial systems in the world.
The Mexican banking system is composed of 50 banks, all of which comply with international regulation standards, and are supervised by the National Banking Commission (CNBV) under a prudential framework.
Mexico's individual income tax rates range from 1.92% to 35%. Non-residents (those in Mexico on a work visa/permit) pay 15% to 30%. Mexico's corporate tax rate is a flat 30%.
Mexico has different types of corporation that allow the structuring of foreign investments and to start-up a business in Mexico. These options can vary from legal entities to representation offices that generate no revenues. The gap between these two extremes is covered by joint venture agreements and commercial trusts.
The main legal entities (corporations) that foreign investors who wish to do business in Mexico can use are:
• Business Corporation (S.A.)
• Limited Liability Corporation (S. de R.L.)
• General Partnership
• Limited Partnership
Each of these may adopt the form of a variable capital corporation. These entities may be used to structure wholly-owned subsidiaries, as well as joint companies with both Mexican and foreign partners.
Another type of corporation available for investors is the limited partnership, which may perform economic but not profitable activities. This means that a limited partnership may not enter into trading activities.
Consequently, this type of company is used by professional service providers and charity organizations, etc. and other similar entities.
The following investment vehicles are also available and although they are not formally recognized as legal entities in Mexico, they offer attractive features for foreign investors:
• Joint corporation (joint venture)
• Trust agreement (trust fund)
• Branch
• Representation office
As a general rule, the Foreign Investment Law allows foreign investors and Mexican companies controlled by foreign investors, without prior approval, to own up to 100% of the equity of Mexican companies; purchase fixed assets from Mexican individuals or entities; engage in new activities or produce new products; open and operate establishments; and expand or relocate existing establishments.
Mexico is a civil law country, meaning that the Mexican system does not rely on stare decisis or considers case law as binding precedent. As a result, the Mexican intellectual property statues are significantly more detailed than their US compliments. Mexican law recognizes only intellectual property that has industrial uses. For example, Mexico recognizes and protects patents, utility models, industrial design, trademark, trade secret, slogan, trade name, and origin identification.
In general, legislation follows the pattern of codified law originally based on the Napoleonic Code, with separate federal and state civil and other codes, in addition to separate laws and decrees covering specific subjects. Corporate law, as well as foreign investment, intellectual property protection, and income and value-added tax laws, among others, are federally created.
Our law firm VLO provides legal services for corporate and private clients in Mexico. These services include mergers and acquisitions, business and debt restructuring, tax and tax disputes, corporate disputes, investments, bankruptcy, litigation and arbitration.
If you have questions, please us right now.
E-mail: vlolawfirm@gmail.com
Mexico ranks first in the Americas and seventh in the world for the number of UNESCO World Heritage Sites. It is also one of the world's 17 megadiverse countries, ranking fifth in natural biodiversity. Mexico's rich cultural and biological heritage, as well as varied climate and geography, makes it a major tourist destination Mexico is a member of United Nations, the G20, the Organisation for Economic Co-operation and Development (OECD), the World Trade Organization (WTO), the Asia-Pacific Economic Cooperation forum, the Organization of American States, Community of Latin American and Caribbean States, and the Organization of Ibero-American States.
Mexico has a mixed economy. Private enterprise is the principal factor in manufacturing, mining, commerce, entertainment, and the service industries, including construction and tourism. During the 80´s and 90´s the government sold to private enterprise a number of its holdings in what are classified as non-strategic industries. Foreign investment is found most frequently in the manufacturing, mining and financial sectors.
The economy is fairly broad-based and dedicated mainly to supplying the needs of the large and rapidly increasing population. However, proximity to the United States also provides a large market for the export of manufactured and semi-manufactured goods, as well as substantial income from foreign tourists. Federal taxes on oil production and export provide a substantial portion of the total resources of the federal government.
Mexico has an effective financial system that privileges consumption capacity and investment. The Mexican financial system has a capitalization ratio that exceeds international standards, and is regulated under a modern legal framework that includes best practices in terms of prudential standards, risks, accounting and corporate governance. In 2013 Mexico implemented in advance Basel III regulatory framework to consolidate its financial system regulation, supervision and risk management, and is considered as one of the most solid financial systems in the world.
The Mexican banking system is composed of 50 banks, all of which comply with international regulation standards, and are supervised by the National Banking Commission (CNBV) under a prudential framework.
Mexico's individual income tax rates range from 1.92% to 35%. Non-residents (those in Mexico on a work visa/permit) pay 15% to 30%. Mexico's corporate tax rate is a flat 30%.
Mexico has different types of corporation that allow the structuring of foreign investments and to start-up a business in Mexico. These options can vary from legal entities to representation offices that generate no revenues. The gap between these two extremes is covered by joint venture agreements and commercial trusts.
The main legal entities (corporations) that foreign investors who wish to do business in Mexico can use are:
• Business Corporation (S.A.)
• Limited Liability Corporation (S. de R.L.)
• General Partnership
• Limited Partnership
Each of these may adopt the form of a variable capital corporation. These entities may be used to structure wholly-owned subsidiaries, as well as joint companies with both Mexican and foreign partners.
Another type of corporation available for investors is the limited partnership, which may perform economic but not profitable activities. This means that a limited partnership may not enter into trading activities.
Consequently, this type of company is used by professional service providers and charity organizations, etc. and other similar entities.
The following investment vehicles are also available and although they are not formally recognized as legal entities in Mexico, they offer attractive features for foreign investors:
• Joint corporation (joint venture)
• Trust agreement (trust fund)
• Branch
• Representation office
As a general rule, the Foreign Investment Law allows foreign investors and Mexican companies controlled by foreign investors, without prior approval, to own up to 100% of the equity of Mexican companies; purchase fixed assets from Mexican individuals or entities; engage in new activities or produce new products; open and operate establishments; and expand or relocate existing establishments.
Mexico is a civil law country, meaning that the Mexican system does not rely on stare decisis or considers case law as binding precedent. As a result, the Mexican intellectual property statues are significantly more detailed than their US compliments. Mexican law recognizes only intellectual property that has industrial uses. For example, Mexico recognizes and protects patents, utility models, industrial design, trademark, trade secret, slogan, trade name, and origin identification.
In general, legislation follows the pattern of codified law originally based on the Napoleonic Code, with separate federal and state civil and other codes, in addition to separate laws and decrees covering specific subjects. Corporate law, as well as foreign investment, intellectual property protection, and income and value-added tax laws, among others, are federally created.
Our law firm VLO provides legal services for corporate and private clients in Mexico. These services include mergers and acquisitions, business and debt restructuring, tax and tax disputes, corporate disputes, investments, bankruptcy, litigation and arbitration.
If you have questions, please us right now.
E-mail: vlolawfirm@gmail.com
