Issue 119–January 2014

January 12, 2014

Energy Reform

By Sergio Mario Ostos and Antonio Franck

On December 21, 2013, the decree that reformed Articles 25, 27 and 28 of the Mexican Constitution relating to the energy, electric and hydrocarbon sectors came into effect. This decree is best known as the “Energy Reform.” In addition to reforming the three constitutional articles cited above, the Energy Reform decree contains 21 transitory articles which establish, among other things, that within the following 120 days, Congress must make the necessary modifications to applicable secondary legislation in order to fully implement the new Energy Reform decree. The Energy Reform encompasses both hydrocarbons and electricity. (A) Hydrocarbons: The Energy Reform does not open Petróleos Mexicanos (“PEMEX”) to direct private ownership and investment; however, it will allow PEMEX to develop as a … read more

January 12, 2014

The Importance of Designating Successor Trust Beneficiaries in Real Estate Management Trusts

By Marimar Perez-Cacheaux and Ramón Concha

There exist many trusts in Mexico that were created in order for foreigners to acquire and own real estate in the restricted zone (a strip of 50 kilometers – approximately 31 miles – along the coast, or 100 kilometers – approximately 62 miles – from the border). In any of these situations, a foreigner contracts a Mexican bank (the “Trustee”), so that real estate is transferred to the trust and the foreigner, in his/her capacity as trust beneficiary, has the right to use and enjoy the real property. If the trust was duly structured and formalized, the foreigner, as trust beneficiary, shall designate successor trust beneficiaries, meaning that he/she will name the person or persons who will replace him or … read more

Minimum Wage Increase
By Pablo Saenz

The minimum wage in Mexico has increased by 3.9 % On December 18, 2013 the National Commission on Minimum Wages (the “Commission”) approved a 3.9% increase in the minimum wage, the same which became effective on January 1, 2014. Such increase is relevant in that employees in Mexico have a right to receive wages that are not less than the general or professional minimum wages. The minimum wage is defined by the Mexican Federal Labor Law as the minimum amount to be received, in cash, by an employee for services rendered in a work shift, the same which should be sufficient to satisfy the normal needs of a head of household with respect to material, social and cultural matters and … read more