Doing Business

Doing Business in Mexico 2015

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3 Doing Business in Mexico 2015 Political system Mexico is now a federal democratic republic divided into 32 states, including the Federal District (Mexico City). The federal government has somewhat greater powers than its counterpart in the United States, particularly in one area: the principal types of tax revenues are reserved to the federal government, which distributes certain revenues to the states. The chief executive is the President, who is elected for a period of six years and may not be re-elected. There is a bicameral legislature as well as a judicial branch. The mayor of Mexico City is elected by popular vote for a single six year term since 1997. The Legislative Assembly (formerly the Assembly of Representatives) of the Federal District is elected every three years. This assembly is empowered to issue ordinances regarding the day-to-day administration of the District. In view of the size and economic importance of the District, its annual budget is considerably larger than of any of the other states. For the last 16 years the Federal District has been governed by the PRD, a leftist socially focused political party. The state governments are headed by popularly elected governors, who also serve for single six-year terms. The states have their own legislatures and judicial systems. Legal system 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. Population and social patterns Population The population of Mexico is estimated at approximately 112,000,000 inhabitants, reflecting a net annual increase in recent years of about 1.4%. Mexico is the most populous country in Latin America after Brazil. The total population of the country has more than tripled since 1940. There has been a substantial movement of people from rural areas to towns and larger cities. The urban population is now considered to represent well over 70.3% of the total. Although the average population density in the country as a whole is only about 57 inhabitants per square kilometer, that of the individual states of the republic varies widely, from about 8 inhabitants per square kilometer in the state of Baja California Sur, in the southern half of the Baja California peninsula, to nearly 6,000 per square kilometer in the Federal District, consisting largely of the capital, Mexico City. Mexico City and its environs continue to be the largest and most concentrated population center, with a disproportionate share of economic activity. However, some efforts have been made by both the federal and local governments to decentralize industry and foster the growth of other regional population and business centers. 1

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