[ESTABLISHING A BUSINESS ENTITY IN MEXICO] 333
of their Government, under the penalty, in case of failure to honor such commitment, to forfeit such interest or equity participation to the benefit of the Mexican Nation), may acquire property located in the restricted zone for non- residential purposes, in which case, they would require to give a notice to the SRE of such acquisition within the next sixty (60) days following the date of the acquisition. Non-residential purposes pursuant to the regulations of the LIE are considered as those destined to time sharing, industrial, commercial or tourism related activities and generally those used by entities pursuant to their corporate purpose, such as sales or transfers, urbanization, construction or development of real estate projects. Foreigners may acquire real estate properties outside of the “restricted zone” provided that they must obtain a permit from the SRE for such purposes. (2) Permitted Activities. According to the LIE there are three different types of reserved activities regulated by such law: (a) activities reserved to be performed exclusively by the Mexican State, which include, among others, petroleum, hydrocarbons and electricity (provided that private investment is allowed in such activities in accordance with the Energy Reform passed on 2013); (b) activities reserved to the Mexican State and to Mexican companies with “Foreigners Exclusion Clause” 37 provided in their by-laws, 37 An express agreement or covenant forming part of the company’s corporate by -laws and setting forth that such corporation shall not admit, directly or indirectly, foreign
which include, among others, national transportation of passengers in Mexican territory; and (c) activities with specific regulation were foreign investment can participate only in the percentages establish by the LIE, such as national air transportation in which case a maximum forty-nine percent (49%) of foreign investment in the capital stock of the company is allowed or broadcasting companies in which case up to forty-nine percent (49%) of foreign investment in the capital stock of the company is also allowed. Also, the LIE states activities that require the authorization of the National Foreign Investment Commission ( Comisión Nacional de Inversión Extranjera ) in order for Mexican companies with foreign investment to participate, directly or indirectly, in a proportion higher than forty-nine percent (49%) of its capital stock, as such as the private education, public railway transportation, airports and ports services. Furthermore, and in order to control and regulate the provision set forth in the LIE and its regulations, the Mexican government through the SE created the RNIE in which, according to the LIE, the following entities are obliged to be registered: i. Mexican companies in which foreign investment participates;
investors or corporations with foreigners’ admission clause, as partners or stockholders.
ILN Corporate Group – Establishing a Business Entity Series
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