• MEX GVT seeks to amend aspect of foreign ownership in Mexican companies.

Foreign Investment Limit

• Under article 9 of the foreign investment law, MEX national foreign investment commission must approve foreign acquisition that exceeds certain parameters.
• A foreigner may invest over 49% in share capital in a Mexican company, if total asset value at time of a request for acquisition approval, exceeds a prescribed amount.

Asset Value Amount

• National foreign investment commission determine the asset value amount; MEX GVT proposed to adjust amount by 3.2% nominal growth of gross domestic product (GDP).
• The adjusted amount for the year 2020 would be $ 20,184,671,346.26 MEX pesos.

Applicability

• Applies to acquisition of shares or social shares of companies already established, and companies that do not carry out restricted activities or subject to specific regulation.

Rationale

• Mexico has signed international treaties with US, Canada, Japan, other countries.
• Pursuant to those treaties, Mexico committed to annually adjust the asset value amount applicable to the acquisition of over 49% by investors from those countries.