BAJA Trade and Investment

Legislation on Foreign Investment

The Foreign Investment Law in Mexico relaxes the regulations established for foreign investment and deals with it almost as it does with national investments.

In general, it consolidates the opening of economic activities to foreign investments and simplifies the administrative procedures that companies need to conduct. It only reserves the control over 11 strategic areas to the State, including oil and other hydrocarbons, basic petrochemicals, electricity, nuclear energy generation, radioactive minerals, as well as those functions pertaining to the State, such as coin minting, postal and telegraph services, radiotelegraphy, and the control and supervision of ports, airports, and heliports.

However, with the new structural reforms promoted by the Federal Executive Power in the matter of Economic Competency, Energy, and Telecommunications, among others, the State´s control over these activities is not strict, since it allows direct participation of private investments, by means of trusts or licenses. Such is the case of electricity, where various foreign companies have been granted with the authorization to execute projects of electricity generation.

Outside of these strategic areas and six more activities where only Mexicans can invest, foreigners may do so freely in any other economic activities, which offer many opportunities for profitability.

In addition, foreign companies may acquire the domain of fixed assets in the restricted area (that is the case of Baja California, as it is located at the borderline) destined to the execution of general business activities (except for the construction of residential dwelling) and may acquire rights over fixed assets when destined thereof.