Doing Business

Doing Business in Mexico 2015

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56 Tax and Legal Services - PwC Mexico Foreign entities other than foreign government agencies may hold capital in AFOREs or participate in their management. Direct or indirect foreign participation of foreign financial institutions in the capital stock of AFOREs is regulated by the applicable international treaties and agreements, and will be subject to the regulations issued by the Ministry of Finance concerning compliance with such treaties and agreements. The only party permitted to participate in the fixed capital portion of a SIEFORE's capital stock is the AFORE that requests its creation and its members. In no case may the participation of an AFORE in the capital stock of the SIEFORE it operates be less than 99% of the fixed portion of the capital stock of the SIEFORE. In addition to AFOREs, only workers investing in the resources of the individual accounts contemplated in the Social Security laws may participate in the variable portion of the capital stock of SIEFOREs. Financial markets Securities market The amount of local capital available for investment in new or expanding industrial enterprises has increased considerably in recent years. A number of factors, including, principally, the rapid expansion of mutual funds (see above), which opened the market to small investors, created interest in equity shares traded on the Mexican Stock Exchange. In addition, the Intermediate Securities Market (Mercado Intermedio) was created to trade the capital stock of smaller and medium-size businesses. Foreigners are authorized to participate (buy and sell) in the Mexican Stock Exchange or in special funds created specifically for this purpose. The securities market law (Ley de Mercado de Valores) establishes international standard regulations covering stock market activities. See Chapter 6 for further discussion of the securities market and the Mexican Stock Exchange. Specialized financial markets Investment interest in Mexico has soared in the past several years and Mexican equities have been some of the most actively traded in the world. Mexican peso futures and options are traded on the Chicago Mercantile Exchange, providing the means for investors to make the most of the opportunities in Mexico today. The addition of futures and options on the Mexican peso represents a significant advance in risk management for all investors in Mexico, because they provide nearly limitless possibilities and combinations for trading and hedging in the Mexican peso. Some of the advantages are: Investors can trade forward foreign exchange on the Mexican peso, profits and losses are denominated in U.S. dollars, and there is an exchange of Mexican pesos for U.S. dollars at delivery. The Mexican Derivatives Exchange (Mercado Mexicano de Derivados MexDer) and the Mexican Clearing House (ASIGNA) are the result of the collaborative efforts of Mexico's Ministry of Finance (SHCP), the CNBV and the Mexican Stock Exchange (BMV). MexDer and ASIGNA were designed to facilitate the modernization of the Mexican financial system and to ultimately turn Mexico into the major financial center of Latin America. MexDer and ASIGNA, pursuant to regulations promulgated by the SHCP, CNBV and the BMV, are established as for-profit corporations with self-regulatory mechanisms to

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