Doing Business

Doing Business in Mexico 2015

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42 Tax and Legal Services - PwC Mexico Regulation of business The regulation of business enterprises is distributed among a number of government agencies operating under various cabinet ministries, the more important of which are referred to below. The states do not have the authority to incorporate corporations. In some cases where foreign investment is involved, approval is granted only after authorization by the Foreign Investment Commission, a part of the Ministry of Economy (SE) as described in Chapter 5. Competition Policy The antitrust law (Ley Federal de Competencia Económica or Federal Law of Economic Competition) prohibits monopolies, monopolistic activities and unlawful business concentrations. One of its main objectives is preventing such monopolistic activities as price-fixing, selective distribution, anticompetitive concerted practices and the elimination of competition. Severe penalties are imposed on violations. A Federal Competition Commission (Comisión) imposes penalties or conditions or subjects "concentrations" to total or partial divestiture. Its mission is to protect the process of competition and market access by eliminating monopolies, monopolistic practices and other restrictions on the efficient functioning of markets. This legislation is consistent with U.S., Canadian and European antitrust principles. Price controls Article 28 of the Political Constitution of the United Mexican States (Constitución Política de los Estados Unidos Mexicanos) provides that Mexican Laws will establish the basis for fixing maximum prices for items, materials or products considered as necessary either for the economy or for popular consumption. The law shall protect consumers and legally organize them to take better care of their interests. The Federal Law of Economic Competition sets forth the rules for determining prices for products and services necessary for the economy or for popular consumption in terms of said Article 28. A considerable number of products are still subject to what is considered variable price "controls". These include basic petrochemicals, certain chemical products for industrial use and the products of a number of basic industries, including, among others, cellulose and fertilizers. The prices of these products may be varied upon authorization of the SE or the Ministry of Energy. Pharmaceutical products All pharmaceutical products must be authorized by the Ministry of Health (Secretaría de Salud) for their production, import and sale. Maximum selling prices must also be approved by the SE. Such prices have, in most cases, allowed for reasonable profit margins on products sold in what is considered the private market and to a lesser degree on the products included in the basic list of medicines for the public sector. A third and preponderant market for generic products for the lowest income groups is supplied at the lowest possible prices.

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