Chihuahua, Chih., April 13th, 2020.

Dear Clients and Friends,

As a result of the resolutions published on March 25th, 2020, in the Federal Official Gazette, the scope of Article 17 of the Foreign Investment Law was amended, therefore we hereby inform you the following.

The referred article previously foresaw the obligation of foreign companies who intended to regularly perform acts of commerce in Mexico, to obtain the corresponding authorization from the Ministry of Economy prior to their establishment.

In an effort to facilitate the establishment of foreign legal entities in the Mexican Republic, the aforementioned resolution modified such article, in order to eliminate the obligation to obtain the referred authorization, only for those companies who were incorporated in a country member of the World Trade Organization (WTO) or in a country in which Mexico has entered into a Free Trade Agreement.

In order to avoid the need to obtain said authorization, it will be necessary to file, through the company’s legal representative or attorney in fact, a writ stating that:

1. Its bylaws and articles of incorporation are not contrary to the law, likewise they must provide the main activity that they intend to carry out in the Mexican territory, which must comply with the restrictions foreseen in the Foreign Investment Law;

2. It has been incorporated in accordance with the laws of their country of origin;

3. Foreign companies that intend to establish themselves and/or carry out commercial acts in Mexico through agencies or branches must provide the respective address;

4. Foreign legal entities of a private nature acting through a legal representative must provide the name and address of said representative, which must be domiciled in the place where the company will operate and authorized to be jointly responsible with the company regarding its obligations.

To register the bylaws and articles of incorporation before the Public Registry of Commerce it will be necessary to attach the aforementioned writ, with the corresponding stamp with date and entry number of the Ministry of Economy.

It is worth mentioning that, for purposes of these resolutions, commercial residence means any type of commercial or professional establishment, through the creation or maintenance of a branch or representative office within Mexican territory.

For further information you can contact either, Rolando Castellanos-Macal at rcastellanos@iclmx.com; and Jorge Almanza-Ríos at jalmanza@iclmx.com.