Foreign entities from the 158 member countries of the World Trade Organisation that wish to carry out commercial activities in Mexico can now benefit from a simplified process to establish a branch or agency in the country. The simplified procedure is also available to civil entities that do not carry out business activities.
One of the decisions that an investor must make is to choose the form of company through which it will do business in Mexico. A decisive factor in choosing a form of company is often the liability that its members may incur. Another significant issue is whether the members of the company can compete with the company's business.
Following a common international trend, the Senate has approved a bill that authorises the formation of stock corporations and limited liability companies with a single shareholder or member. The bill indicates some of the advantages for small businesses, which can limit the liability of their members and deal with public entities that are required to contract with companies rather than individuals.
Mexico City's legislative assembly has approved amendments to the Civil Code of the Federal District on contracts. Conceived as a response to the economic crisis, they provide that if an exceptional and unexpected event on a national scale has the effect of making one party's obligations more onerous, that party may request modification or recission of the agreement.
Mexican law requires that Mexican corporations have no fewer than two shareholders or partners. If a new proposal to allow the existence of single shareholder corporations is approved by Congress, Mexican and foreign investors will not be required to have two buyers when acquiring an existing company or creating a new one.
Foreign investors sometimes enter the Mexican market through a Mexican limited liability company. This form of company has become more common in the past few years since income derived from it is treated as derived from a partnership for US tax purposes. A limited liability partnership may be incorporated with not less than two and not more than 50 partners.
There are three main areas of non-contractual liability, according to Mexican Law: subjective non-contractual liability, strict liability and moral damage. This update explores the legislation related to each area.
This update gives a general description of the regulations governing breach of contract actions and the remedies for contractual liability in the Mexican legal system according to the rules set forth in the Civil Code of Mexico.
There is a new trend whereby US and other foreign jurisdiction courts are considering cross-border liability for foreign operations with Mexican subsidiaries. This may have far-reaching implications to the way that subsidiaries are structured.
Including: Unincorporated Presence; Incorporated Presence; Advantages and Disadvantages