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Mexican Tax Law: Taxation of Foreigners
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 Mexico's tax treatment of income earned by foreigners is comparable to that of the US and other industrialized nations.
Mexico has negotiated international tax agreements with a number of its major trading partners, such as Canada and the US. These agreements have two basic objectives: (i) to ensure that each contracting state allows tax credits for income taxes paid to the other contracting state to avoid double taxation; and (ii) to reduce the taxes that each contracting state may impose on the nationals of the other (e.g. taxes on income from interest on loans, dividends, and royalties). Mexico signed and ratified a bilateral income tax treaty with Canada in 1992. The treaty was titled: The Convention between the Government of Canada and the Government of Mexico for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. It was signed April 18, 1991 and published in Mexico on July 17, 1992 and in Canada on May 28, 1992 (the Canada-Mexico Tax Treaty). Mexico signed a similar treaty with the US later that same year: The Convention between the US Government and the Government of the United Mexican States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income. It was signed Sept. 18, 1992 and entered into effect January 1, 1994 (the US-Mexico Tax Treaty). Return to top |
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Business in Mexico: Types of Companies in Mexico
The Ley General de Sociedades Mercantiles (Corporate Law) recognizes as business entities the general partnership (sociedad de nombre colectivo), the limited liability partnership (sociedad en comandita simple), the limited liability company (sociedad de responsabilidad limitada), the stock corporation (sociedad anónima), the limited liability stock partnership (sociedad en comandita por acciones), and the cooperative (sociedad cooperativa). The LGSM regulates the operations of the above-mentioned companies, except for the cooperative which, due to its nature, is governed by a special law.
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| | Invest in Mexico: Neutral Investment
Neutral investment is a mechanism through which foreign investment can participate in certain reserved or specially regulated activities.
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The LIE defines neutral investment as investment in Mexican companies or in authorized trusts that will not be taken into consideration for determining the percentage of foreign investment in the capital stock of Mexican companies.
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| | Economic Activities in Mexico Subject to Restriction
As a general rule, there are no legal restrictions on foreign individuals and entities engaging in economic activities in Mexico, either directly or as partners or shareholders in Mexican companies.
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However, the LIE (Ley de Inversión Extranjera or Foreign Investment Law) specifies certain activities in which foreign investment is not allowed and others in which it is limited.
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Here we will discuss the activities that are reserved or subject to a specific regulation. We will also refer to the concept, regulation, and scope of neutral investment, a mechanism through which foreign investment can participate in certain reserved or specially regulated activities.
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| Canadian Chamber of Commerce in Mexico
The Canadian Chamber of Commerce in Mexico (CCCM) is a non-profit organization founded in 1982 by a prominent group of Canadian and Mexican companies. The mission of the CCCM is to promote and strengthen the commercial, financial and investment relationships between Canada and Mexico. The primary aim of the CCCM is to serve as a home for Canadian businesspersons in Mexico.
| | British Chamber of Commerce in Mexico
The BritCham represents not only British business interests but other European chambers of commerce as well, and is the perfect connection when it comes to facilitating business in Mexico. Their extensive network is also the best way to get into contact with other British and European nationals living, working and doing business in the country. Below we've presented an introduction and information on how to get in touch with the BritCham.
| | Business Practices in Mexico: The Basics
Are you conducting business in Mexico? Are you aware of the most significant cultural differences? Refer to this page for a quick education in Mexican dress code, negotiations and business lunches.
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