Doing Business

Doing Business in Mexico 2015

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43 Doing Business in Mexico 2015 The Mexican Government is interested in promoting the consolidation of companies in the industry, with a view to increasing the participation of Mexican investors and reducing costs, for both export and local market purposes. Increased production of raw materials for the industry is also desired. It is recommended to seek the advice of a competent specialist when considering a possible investment. Mergers and acquisitions In the past, many foreign investors in Mexico preferred to purchase an interest in an established local concern rather than to form a new company that might enter the market at a competitive disadvantage. In any event, it is advisable to contact our Legal Area for competent legal advice when considering an acquisition or a merger. For a discussion of the tax consequences of mergers and acquisitions, see Chapter 17. Securities markets (stock exchange) Public offerings of securities, the stock exchange, brokers, and dealers are regulated under the Securities Market Law (SML), which governs the operations of the National Securities Commission. Only securities approved by the Securities Commission and included in its National Register of Securities and Intermediaries may be offered to the public. The Securities Market Law was enacted on June 28, 2006. This new securities market legislation establishes regulations in accordance with modern international standards governing the fundamental principles of the securities market. Among other objectives, the new law aims to incorporate medium-size corporations in the securities market, establishes minority shareholders' rights and corporate governance standards, as well as the regulation of the conduct of the participants in the securities market, with the final purpose of reducing the cost for the issuer. Requirements for Securities Commission approval In addition to details and documentation of the organization of a company, information as to its officers and a description of its business, a company desiring to have its equity or debt securities approved by the Securities Commission is required to furnish to the Commission, among other documentation, audited financial statements. Final approval can be expected to take from one to four months under normal conditions. Subsequently, audited annual financial statements must be published and furnished to the Commission. Mexican Stock Exchange The Mexican Stock Exchange is operated by a corporation whose shareholders used to be the brokers and broker-dealers registered to do business through the Mexican Stock Exchange, but which went public in 2008. The principal requirement for listing a company's securities is the prior approval of the Securities Commission. Each listed company is required to provide annual audited financial statements as well as unaudited interim statements on a quarterly basis. No special rules exist for a foreign acquisition of an interest in a local publicly held enterprise, other than the restrictions that may still apply with respect to corporations engaged in certain activities where foreign ownership is limited or not permitted. See Chapter 5 for details. 6

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