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Corporate & Business
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New criteria for the establishment of foreing branches in M�xico August 2012

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New Criteria for the application article 17 of the Foreing Investment Law.

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Through Decree published in the Official Gazette on august 8^th, 2012, The Executive Power issued a resolution through the Foreign Investment Commission in which the criteria for the application of article 17 of the Foreign Investment Law, related to the establishment of foreign legal entities, is established.

Article 17 establishes that foreign legal entities seeking to engage in habitual acts of commerce in the Republic, and foreign legal persons of private nature, shall obtain authorization of the respective Ministry to do so.

The resolution states that foreign legal entities constituted under the laws of USA, Canada, Chile, Costa Rica, Colombia, Nicaragua, El Salvador, Guatemala, Honduras, Uruguay, Japan and Peru, shall not require the authorization of article 17, as long as they provide a letter under oath, stating that their social contract and related constitutive documents, are not against public order, in addition, they shall state that they have been constituted under the law of their respective country. Foreign entities seeking to engage in habitual acts of commerce in the Republic are also required to state that they will be established in the Republic or that they shall have an agency or branch here. Foreign legal persons of private nature are also required to state that they will have a proxy in the domicile where the foreign legal person will operate.

In order to get the inscription in the Public Registry of Commerce, it will be enough to submit the above mentioned letter with the respective seal and number from the Ministry of Economy.

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For additional information, you may contact any of the members of our Corporate & Business Practice Team.