Doing Business

Doing Business in Mexico 2015

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34 Tax and Legal Services - PwC Mexico Currency accounts No special currency accounts are required for foreign investors or traders. Repatriation of capital and earnings There are no exchange control limitations on remittances in foreign currency for repatriation of capital investments and repayments of intercompany loans or for remittance of dividends, intercompany interest or branch profits. However, all corporations are required to set aside from their profits a legal reserve amounting to 5% of yearly earnings until an amount equal to 20% of the capital stock of the entity is reached. Foreign currency for remittances of royalties and technical assistance fees, as well as for payments of imported merchandise, may be freely obtained in the exchange market. Guarantees against inconvertibility There are no guarantees against inconvertibility, and all transactions in the exchange market depend on the availability of foreign currency funds. Restrictions on foreign investment Definition of foreign investment The following activities are considered as foreign investment for purposes of the foreign investment law: • Participation by foreign investors, in any percentage, in the capital stock of Mexican companies. • Investments by Mexican companies in which foreign investors have a majority interest and, • Participation by foreign investors in activities and acts described in the foreign investment law. This law provides that foreign individuals residing in Mexico with the status of permanent immigrants (inmigrados) will be considered domestic investors for purposes of this law, except in regard to those activities reserved to Mexicans or to Mexican companies that prohibit ownership of shares by foreigners, or in the cases of investments involving ownership of residential real estate in the border or coastal areas. Industries closed to private enterprise and foreign investors In accordance with the Foreign Investment Law, foreign investors may, as a general rule, invest in Mexico without any prior authorization or restriction, except as provided in law. Specifically, the law establishes that foreign investors may do the following: • Participate in any proportion in the capital stock of Mexican companies. • Acquire fixed assets. • Participate in new fields of economic activity or manufacture new product lines and, Open, operate, expand, and relocate existing establishments, except in the case described in this chapter.

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