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Review procedure

As briefly mentioned in Section II, certain economic activities are capped at a certain percentage of foreign investment participation. These restrictions are found in the FIL and include the following:

  1. a limit of up to 10 per cent foreign investment in the case of cooperative companies for production; and
  2. a limit of up to 49 per cent foreign investment in:
    • explosives and firearm-related industries;
    • printing and publishing of national-circulation newspapers;
    • equity representing land for agriculture or cattle use;
    • freshwater fishing, and fishing within the coast and economic exclusive zone;
    • port administration;
    • port piloting services of vessels to perform inland navigation transactions;
    • shipping companies dedicated to the commercial exploitation of vessels for inland navigation and coastal shipping, except for cruises;
    • supply of fuels and lubricants for vessels, aircraft and railway equipment;
    • broadcasting; and
    • domestic air transportation and specialised air transportation.

The limits on foreign investment participation in the above-mentioned economic activities may not be surpassed directly or through trusts, contracts, partnership or by-law agreements, pyramiding schemes or other mechanisms granting any control or higher participation than that established. However, neutral investment, which is a sort of preferred non-participatory financial investment equity that is not characterised as foreign investment for the purposes of the limitations provided by the FIL, has made it possible to have equity participation in spite of these restrictions.

Neutral investment allows economic rights but very limited corporate rights and it will not grant the foreign investor control over the corresponding company or trust. Therefore, foreign investors may participate in Mexican companies or in trusts through a special class of stock that the Ministry of Economy authorises and that is not taken into account in determining the percentage of foreign investment in the company's capital stock.

Moreover, a foreign investor must obtain approval from the CNIE for participation higher than 49 per cent in:

  1. port services of vessels to perform inland navigation transactions;
  2. navigation companies dedicated to the exploitation of vessels;
  3. entities that are concessionaires or holders of permits of public-service airports;
  4. private education services;
  5. legal services; and
  6. construction, operation and exploitation of railways.

Further to the above, foreign investors require authorisation from the CNIE whenever they acquire, directly or indirectly, equity of a company whose assets are above the amount fixed each year by the CNIE (currently, around 19.5 billion Mexican pesos or US$1 billion). The time taken by the CNIE to authorise such transactions may vary but is not usually considered to be a relevant obstacle. The CNIE may demand certain undertakings of a foreign investor related to employment, technology transfer or investment, as conditions of granting authorisation; however, 95 per cent of all foreign investment transactions in Mexico do not require government approval and it is considered as one of the most open and competitive in the world.

As further discussed in Section V, in general terms and subject to the restrictions discussed in Section II, foreign investors receive the same treatment as domestic investors when acquiring or becoming involved in restricted areas, including in matters such as antitrust approvals, where the focus would be on the nature of the transaction and not necessarily on the nationality of the parties involved. The only difference for foreign investors is the percentage of ownership interest that they can hold, either directly or indirectly.

For information purposes, the Mexican government relies on statistics provided by the RNIE, which monitors foreign investment, collects statistics and carries out surveys relating to foreign investment in the country. Specific information about investors and investments is not generally available to the public, except for the statistical data available through general publications or aggregate data available on the RNIE website. Some recent modifications to the General Law of Commercial Companies require information about equity structure to be made available to the federal government.

All foreign investors and Mexican companies with foreign participation in their ownership are subject to registration. Upon registration before the RNIE, periodic reporting obligations arise; failure to comply with these obligations may trigger the imposition of fines.