UNITED STATES-MEXICO CHAMBER OF COMMERCE - NORTHWEST CHAPTER Home Contact Us Contact Us Contact Us
ABOUT US MEMBERSHIP EVENTS BUSINESS  OPPORTUNITIES NEWS
User ID:
Password:
Lost Your Password?
Email:
 
BUSINESS DEVELOPMENT CENTER / INVESTMENTS
Trade                             Investments                            Tourism                             Links                            Webinars                             Video/Audio
Investing in Mexico Summary of Foreign Investment Law
Checklist for investing in Mexico

I. Initial Investment Considerations

  • A. Assess goals and objectives
  • B. Analyze target market(s)
  • C. Contact and retain local Mexican professional assistance
  • D. Learn local customs and business practices
  • E. Develop a proposed structure for operations
  • F. Prepare a checklist of pending matters

II. Start-Up Considerations

  • A. Market Studies
    • Logistics:
      • 1) Identify, select, and assess target markets
      • 2) Determine the market share of the company and its competition
    • Operations:
      • 1) Site selection
      • 2) Identify and assess operational factors
      • 3) Identify permitting and logistical issues
      • 4) Take advantage of Mexico’s Trade Agreements
  • B. Cultural Differences

III. Foreign Investment Considerations

  • A. Analyze foreign investment restrictions, if any (geographic location, if within restricted zone; substantive if within restricted industry)
  • B. Determine whether local equity participation is necessary or desirable
  • C. Analyze incentives and disincentives for foreign investment
  • D. Prepare a list of governmental approvals required for foreign investment

IV. Financing Considerations

  • A. Assess availability of:
    • - foreign loans
    • - local loans
    • - enforceable security devices
    • - Export Credit Agency or Multi-Lateral Lending Agency
  • B. Determine currency to be used
  • C. Determine role of Mexican banks

V. Corporate Structure

  • A. Corporate organization
  • B. Type of entity in Mexico (e.g. land-owning trust, stock corporation, limited liability company)
  • C. Determine ownership of Mexican entity (e.g. individual owners or parent entity?)
  • D. Perform complete legal and tax analysis of proposed structure to ensure maximum benefits under Mexican and foreign law

VI. Legal Analysis
With the assistance of legal counsel as necessary:

  • A. Become acquainted with applicable Constitutional provisions, laws, decrees, and regulations affecting the proposed entity and investors
  • B. Analyze issues of specific concern to investors:
    • Corporate-Commercial Issues
      • 1) rights of investors against third party creditors
      • 2) treatment of minority shareholders or partners
      • 3) ability to secure property and assets in Mexico
      • 4) impact of Mexico's anti-trust law
      • 5) price or materials controls
    • Litigation issues:
      • 1) rights of private action in Mexico
      • 2) product liability
      • 3) ability to enforce foreign judgments and arbitral awards in Mexico
    • Environmental issues:
      • 1) Become aware of environmental legislation, decrees and regulations that may affect operations
      • 2) Compile list of environmental licenses, approvals, environmental impact statements, etc., required for project
    • Tax issues:
      • 1) Become aware of Mexico's tax system and filing requirements (i.e., income tax rates, value-added taxes, property taxes, asset taxes, etc.)
      • 2) Evaluate the impact of Mexico's new intercompany transfer pricing rules
      • 3) Assess the applicability and benefits of international tax treaties
      • 4) Analyze the corporate organization of the project from an overall tax planning point of view, incorporating legal, accounting, and financial advice from both Mexican advisors and home country advisors
    • Intellectual Property issues:
      • 1) Identify IP requiring protection within Mexico
      • 2) For IP requiring protection compile a list of applicable registration requirements and extent of protection offered by same
      • 3) If applicable to the business plan determine whether there are any restraints on the freedom of contract for the licensing of intellectual property

VII. Accounting/Financial Analysis

  • A. Become acquainted with local financial reporting requirements
  • B. Identify appropriate Mexico advisor for assisting with reporting
  • C. Identify and establish procedures for compiling accounting and financial data sufficient to meet accounting and reporting requirements

 

Prepared by Chapter member David D. Spencer, www.davidspencerlaw.com
 
 
ABOUT US
Mission
History
NW Chapter Structure
Binational Office
MEMBERSHIP
Benefits
Membership Dues
& Application

Members Roster
EVENTS
BUSINESS
OPPORTUNITIES

US Companies
Seeking

Mexico Companies
Seeking

CONTACT US
HOME

© 2011 USHCCNW - UNITED STATES-MEXICO CHAMBER OF COMMERCE - NORTHWEST CHAPTER. All rights reserved