Corporate Articles

May 25, 2013

The Hiring of Independent Contractors on a Commission Basis or Commercial Agents in Mexico by Foreign Companies

By Fransisco Peña

The hiring of independent commissioned contractors or those known as commercial agents in Mexico is an issue that must be analyzed very carefully by companies interested in entering into such arrangements, even if these companies are foreign. Parties seeking to hire independent commissioned contractors to carry out certain economic activities in Mexico, or who already use such, should take into account different aspects of Mexican law to avoid falling into situations that can lead to obligations for which such parties may not be prepared. The hiring of independent commissioned contractors may have implications not only of a labor nature, but also with respect to social security and fiscal matters. In this regard, in accordance with that established in Article 285 … read more

May 25, 2013

Digital Television. Modifications to Mexican Official Standards with Respect to Commercial Information for Electronic, Electric and Home Appliance Products

By Iker Dieguez

On April 23, 2013, the Mexican Department of the Economy published in the Official Journal of the Federation the “DRAFT of Mexican Official Standard PROY-NOM-024-SCFI-2013, commercial information for packaging, instructions and warranties for electronic, electric and home appliance products.” Its purpose is to make the contents of the Draft known so that all interested parties may submit comments to the draft within 60 calendar days following its publication, pursuant to the methods indicated therein. Therefore, comments to the draft standard may be considered at the meeting of the National Advisory Committee for User Safety, Commercial Information and Trade Practices, prior to the publication of the new rules as a final standard. Upon its publication as a final standard, this new … read more

March 10, 2013

Public Contracting in Mexico

By Adrián Salgado

Given the likelihood of a much commented and controversial energy reform that would allow greater participation by the private industry in the energy sector, it is necessary to be aware of the proceedings and formalities present when private parties enter into contracts with Mexican federal or local government bodies. On the federal level, the laws that govern public contracting are the Public Sector Acquisition, Leasing and Services Law and the Public Works and Related Services Law, depending on the subject matter of the contract in question. However, in 2008, various reforms were published, excluding acquisitions, leases and contracting of public works and services from the application of these laws, dealing exclusively with substantive production activities referred to in the Regulatory … read more

October 1, 2012

New Regulation for the Authorization to Use Corporate Names

By Jorge Ojeda

As a result of a recent amendment to the Foreign Investment Law, published in the Official Journal of the Federation on December 15, 2011, regarding the fact that authorizations to use corporate names by entities in Mexico have been transferred to the Department of Foreign Relations of the Department of the Economy, the Mexican Executive Branch published the Regulation for the Authorization to Use a Corporate Name on September 12, 2012, effective as of September 17, 2012 (the “Regulation”). The Regulation establishes the mandatory use of a new electronic on-line system to process requests for authorizations related to the use of corporate names, including those necessary for entity formations and entity name changes, as well as for notices of authorization … read more

August 1, 2012

New Criteria for the Establishment of Foreign Entities in Mexico

By Iker Dieguez

On August 8, 2012, the Department of the Economy (SE) published the “General Resolution establishing the criteria for the application of Article 17 of the Foreign Investment Law with respect to the establishment of foreign entities in Mexico.” In accordance with Article 17 of the Foreign Investment Law, foreign entities seeking to establish agencies or subsidiaries to regularly carry out business activities in Mexico must obtain authorization from the SE, including those foreign entities that intend to establish representative offices without income in Mexico. Additionally, such foreign entities should register with the Public Registry of Commerce in order to legally transact business in Mexico. By means of such resolution, the SE, through the National Foreign Investment Commission, has eliminated the … read more

October 8, 2011

Extension of Tax Benefits granted to the Maquiladora Industry

On October 12, 2011, the Mexican Department of Finance and Public Credit published the Decree, in the Official Journal of the Federation, by which the tax subsidies granted to the maquiladora industry are extended until December 31, 2013. Such tax subsidies were the result of the Decree granting various tax benefits with respect to income tax and the single rate business tax published on November 5, 2007. The tax incentive granted to the maquiladora industry is in the form of a tax credit applied against the final accumulated single rate business (IETU) tax due by the taxpayer for the fiscal year. This tax incentive was originally in place from 2008 through 2011, but the new Decree extends the tax benefits … read more

January 4, 2011

Important Amendments to IMMEX Decree

On December 24, 2010, Mexico published important amendments to the Decree for the Development of the Manufacturing, Maquiladora and Export Services Industry (IMMEX Decree) in the Official Journal of the Federation (Diario Oficial de la Federación or DOF). Among other important points, the amendments eliminate the ALTEX and ECEX Decrees, establish a new definition for the concept of “maquila operations,” as well as provide new causes for cancellation and suspension of IMMEX programs. The IMMEX Decree amendments will become effective 90 days following their publication in the DOF (except for the definition of the term “maquila operations,” which became effective January 1, 2011), and apply to all companies operating under the IMMEX program. Such companies should carefully review how the … read more

February 16, 2010

Recent Jurisprudence – Endorsement Requirements When Corporations are Involved

Recently, Mexico’s Supreme Court of Justice (Suprema Corte de Justicia de la Nación or SCJN) published in the Judicial Weekly of the Federation case decision Number VI.2o.C.J/315 entitled “Endorsements. Requirements when made by a legal entity.” In such case, the SCJN held that when a legal entity (such as a corporation) endorses a negotiable instrument, said endorsement must contain the entity’s name, as well as the nature of the legal authority of its individual representative who signs the endorsement. The foregoing, according to Mexico’s highest court, is designed to allow the signatory to be identified, even if the signature itself is illegible. The SCJN in this case, notwithstanding the clear policy goal that negotiable instruments be freely transferable in circulation … read more

August 12, 2009

Suspension of IMMEX Programs

On July 14, 2009, the Department of Economy (Secretaría de Economía or SECON) published in the Official Journal of the Federation orders for the suspension of certain IMMEX programs of various program participants. The reasons given for suspending such participant’s programs can be classified into two categories: i) failure to submit the annual sales and exports report for the fiscal year of 2008; and/or ii) failure to update their electronic signature, maintain an active tax identification number (Registro Federal de Contribuyentes or RFC), and/or to update the registered domicile and the domiciles of any additional locations for tax purposes. The first legal basis for suspension is set forth in article 25 of the Decree for the Development of the Manufacturing … read more

August 12, 2009

Amendment to the Social Security Law on Matters Related to Outsourcing Companies

On July 9, 2009, various amendments to the Social Security Law were published in the Official Journal of the Federation. One amendment, in particular, provides that companies hiring personnel services from an employee outsourcing company will assume, by operation of law, all employer obligations set forth in the Social Security Law with regard to the employees from the outsourcing company that are subordinate to such company contracting the outsourcing of personnel. The foregoing applies if the outsourcing company defaults on its obligations under such law and when the Mexican Social Security Institute provides notice to such outsourcing company requiring compliance with such law and the outsourcing company fails to comply with the required actions contained in such notice. Companies that … read more