Mexican corporate law, primarily governed by the Ley General de Sociedades Mercantiles (General Law of Commercial Companies or LGSM), recognises several forms of commercial entities. These include the sociedad anónima (S.A.), sociedad de responsabilidad limitada (S. de R.L.), sociedad por acciones simplificada (S.A.S.), sociedad en nombre colectivo, sociedad en comandita simple, sociedad en comandita por acciones and sociedad cooperativa.

In practice, however, the S.A. and the S. de R.L. are by far the most commonly used vehicles for domestic and foreign investment. Both provide limited liability to their shareholders or quota holders and are suitable for a broad range of commercial activities. Most companies may also adopt a de capital variable (variable-capital) regime, which facilitates capital increases and reductions without requiring a by-law amendment in every case.

For companies seeking greater flexibility in corporate governance, particularly in private equity, venture capital or joint venture transactions, the Sociedad Anónima Promotora de Inversión (S.A.P.I.), regulated under the Ley del Mercado de Valores (Securities Market Law or LMV), is frequently preferred. Publicly listed companies are generally incorporated as Sociedades Anónimas Bursátiles (S.A.B.) under the same statute.

The choice of corporate vehicle is primarily driven by the nature of the business, the profile of the investors, governance requirements, financing strategy, tax considerations and any applicable sector-specific regulation.

From a liability perspective, shareholders or quota holders of an S.A., S. de R.L. and S.A.S. are generally liable only up to the amount of their capital contributions, whereas partners in certain partnership structures may incur unlimited or subsidiary liability.

Governance considerations also play an important role:

• an S.A. follows a more formal corporate regime, with shareholders’ meetings and management vested in either a sole director or a board of directors, making it the preferred vehicle for businesses expecting external investment or future expansion;
• an S. de R.L. offers greater contractual flexibility, restrictions on the transfer of equity interests and a governance structure that is often better suited to closely held companies, family-owned businesses and joint ventures; and
• the S.A.S., which may be incorporated electronically by a single individual shareholder, is intended for small businesses meeting the statutory requirements established by the LGSM.

From a tax perspective, commercial companies are generally treated as separate taxpayers under the Ley del Impuesto sobre la Renta (Income Tax Law or LISR). As a result, the choice of entity is typically driven more by governance, liability and operational considerations than by material differences in tax treatment, although each structure should be evaluated based on the specific circumstances of the transaction.

Finally, certain regulated sectors including financial services, insurance, energy, telecommunications, transportation and healthcare, are subject to additional legislation that may impose foreign investment restrictions, licensing requirements or prior governmental authorisations, all of which should be considered when selecting the appropriate corporate structure.

The incorporation of a commercial company in Mexico is primarily governed by LGSM, together with the Código de Comercio (Commercial Code) and other applicable federal regulations, except for the S.A.S., which may be incorporated electronically.

The incorporation process generally involves:

• obtaining authorisation for the proposed corporate name from the Secretaría de Economía (Ministry of Economy);
• preparing and executing the company’s constitutional documents before a Mexican notary public;
• registering the incorporation deed with the Registro Público de Comercio (Public Registry of Commerce or RPC); and
• registering the company with the Servicio de Administración Tributaria (Tax Administration Service or SAT) to obtain its Registro Federal de Contribuyentes (Federal Taxpayer Registry or RFC).

Where foreign investors participate in the company’s capital, the company may also be required to register before the Registro Nacional de Inversiones Extranjeras (National Registry of Foreign Investments or RNIE), in accordance with the Ley de Inversión Extranjera (Foreign Investment Law).

Depending on the company’s activities, additional registrations or permits may be required before sector-specific authorities, as well as registrations with labour or social security authorities.

The timeframe for incorporation varies. Under ordinary circumstances, a standard incorporation can generally be completed within four weeks. Costs vary depending on the corporate structure, notarial fees, registration fees and the state in which the company is incorporated.

Once incorporated, companies are subject to ongoing corporate, tax and regulatory compliance obligations. Under the LGSM, companies must maintain their corporate books and records, including shareholders’ or partners’ meeting minutes, management resolutions and, where applicable, share registry books, partners’ registry books and capital variation records.

Commercial companies are generally required to hold at least one annual ordinary shareholders’ (or partners’) meeting to approve the financial statements, address the management report where applicable, appoint or ratify corporate officers and resolve any other matters required by law or the company’s by-laws.

Companies must also maintain accounting records and comply with their tax obligations before the SAT, including periodic tax filings and information returns, as applicable. In addition, amendments to the by-laws, changes in management, capital increases or reductions, mergers, spin-offs and other corporate acts may require notarisation and registration with the RPC to become enforceable against third parties.

The regulation of share capital in Mexico is primarily governed by the LGSM, while publicly listed companies and certain investment vehicles are also subject to the LMV.

Unlike many common law jurisdictions, Mexican corporate law does not recognise the concept of authorised share capital. Instead, companies have a subscribed capital that may be divided into fixed capital and, where the company’s by-laws so provide, variable capital. The variable-capital regime is widely used in practice because it allows capital increases and reductions to be implemented with fewer corporate formalities than changes to fixed capital.

Capital contributions are represented by shares (or equity interests, in the case of an S. de R.L.) that are subscribed by the shareholders. Mexican law generally contemplates shares with a stated nominal value and does not recognise the concept of no-par value shares. Corporate capital must be reflected in the company’s by-laws, corporate books and accounting records.

Capital increases and reductions must be approved by the competent corporate body in accordance with the company’s by-laws and the LGSM. Depending on whether the amendment affects fixed or variable capital, additional corporate approvals, notarisation and registration with the RPC may be required.

The LGSM allows companies to create different classes or series of shares, provided that the rights attached to each class are clearly established in the by-laws and comply with the applicable legal framework. In practice, different share classes are frequently used to accommodate investment structures, joint ventures and family-owned businesses.

Different classes of shares may provide for different economic or corporate rights, including preferential dividend rights, liquidation preferences, enhanced or limited voting rights, appointment rights in respect of directors or officers, and other governance arrangements permitted by law. The by-laws may also include transfer restrictions, rights of first refusal, tag-along and drag-along rights, approval requirements and other mechanisms commonly used to regulate shareholder relationships.

Where greater contractual flexibility is required, particularly in private equity and venture capital transactions, companies are often incorporated as S.A.P.I. under the LMV. The S.A.P.I. regime allows shareholders to adopt more sophisticated governance arrangements and shareholder rights than those typically available to a traditional S.A., making it one of the preferred corporate vehicles for investment transactions in Mexico.

Dividends may only be distributed from net profits reflected in the company’s approved financial statements. Before any distribution, companies must allocate 5% of their annual net profits to the legal reserve until it reaches 20% of the company’s share capital, as required by the LGSM. Dividend distributions must be approved by the shareholders’ meeting and comply with the rights attached to the relevant class or series of shares, as well as any applicable tax obligations under the LISR.

Returns of capital are subject to the procedures applicable to capital reductions under the LGSM, which may require corporate approvals, creditor protection measures and registration with the RPC, depending on the transaction.

The acquisition, redemption and cancellation of a company’s own shares are permitted only in the circumstances provided by the LGSM or other applicable legislation. Unlike some common law jurisdictions, Mexican law does not impose a statutory solvency test or a general prohibition on financial assistance. Instead, creditor protection is achieved through the rules governing distributable profits, legal reserves and capital maintenance. Accordingly, any share repurchase or financing structure should be assessed on a case-by-case basis to ensure compliance with the applicable corporate and regulatory framework.

Private companies in Mexico are not generally subject to public disclosure obligations regarding their ownership or control comparable to those applicable to publicly listed companies. However, they are subject to beneficial ownership reporting requirements under the Código Fiscal de la Federación (Federal Tax Code or CFF).

Companies must identify, obtain, maintain and update information regarding their beneficiarios controladores (beneficial controllers), including the individuals who ultimately own, control or benefit from the company, whether directly or indirectly. Such information must be kept available and provided to the SAT upon request, and any changes must be updated within the statutory timeframe.

In addition, companies must comply with applicable tax reporting obligations before the SAT, including maintaining updated information regarding their shareholders and ownership structure where required under the applicable tax regulations.

Corporate governance in Mexico is primarily governed by the LGSM, while listed companies and certain regulated entities are subject to additional requirements under the LMV and CNBV regulations.

Private companies generally have flexibility to structure their governance through their by-laws and shareholders’ agreements, whereas listed companies are subject to enhanced requirements regarding board composition, disclosure, minority shareholder protection and oversight.

Although not legally binding, the Código de Principios y Mejores Prácticas de Gobierno Corporativo (Code of Principles and Best Practices of Corporate Governance), issued by the Consejo Coordinador Empresarial (CCE), is widely recognised as a leading corporate governance benchmark and is commonly adopted by large private companies and institutional investors.

Directors’ duties in Mexico are primarily governed by the LGSM, with additional duties of care and loyalty under the LMV for listed and certain regulated companies. Directors are expected to act in the company’s best interests, exercise due care and diligence, avoid conflicts, protect confidential information and comply with applicable law and corporate documents.

Courts generally assess liability based on the directors’ conduct and the circumstances of each case, rather than merely on the outcome of a business decision. Directors may face personal civil, administrative or, in certain cases, criminal liability for breaches of their duties, exceeding their authority, misuse of corporate assets or information, bad faith, gross negligence or unlawful acts causing damage.

Private companies generally have flexibility regarding board size and composition, and Mexican law does not generally impose nationality, residency, independence or diversity requirements for their directors. These matters are typically addressed through the bylaws and shareholders’ agreements, with board independence and diversity increasingly recognised as best practices.

Listed companies are subject to additional requirements under the LMV, CNBV regulations and applicable stock exchange rules, including a minimum of 25% independent directors and committees with predominantly independent members. Accordingly, private companies have greater contractual flexibility, while listed companies are subject to more prescriptive governance standards.

Mexico does not have a single comprehensive ESG framework. ESG obligations arise from the LGSM, LMV, environmental and labour legislation, and some sector-specific regulations.

For listed companies, ESG disclosures are primarily governed by LMV, CNBV regulations and applicable financial reporting standards. Private companies generally have no equivalent public disclosure obligations.

Mexican law does not impose a separate fiduciary duty requiring directors to pursue ESG objectives. However, boards should consider material ESG risks affecting the company’s operations, compliance or long-term sustainability. Best practices include board oversight, ESG policies, risk monitoring and consistent disclosure.

Under the LGSM, directors are expected to act in the best interests of the company and perform their duties with loyalty and due care. Directors who have a personal interest in a matter under consideration should disclose the nature of the conflict and, where appropriate, abstain from participating in the corresponding deliberation or decision. In practice, many companies supplement these statutory rules through their by-laws, shareholders’ agreements or internal corporate governance policies.

For private companies, the approval of related-party transactions is generally governed by the company’s by-laws and internal governance structure. Depending on the nature and materiality of the transaction, approval may be required from the board of directors, the shareholders’ meeting or both.

Publicly listed companies are subject to a more comprehensive framework under the LMV, which establishes additional approval, oversight and disclosure requirements for related-party transactions. These include the involvement of the board of directors and, where applicable, the corporate practices committee, as well as ongoing disclosure obligations designed to promote transparency and protect minority shareholders.

Shareholder rights in Mexico are primarily governed by the LGSM, the company’s by-laws and, where applicable, shareholders’ agreements. Shareholders generally have voting rights, rights to receive duly declared dividends, pre-emptive rights in certain capital increases, access to relevant corporate and financial information, and rights to participate in the distribution of assets upon liquidation.

The LGSM also provides statutory remedies, including the ability to challenge corporate resolutions adopted in violation of the law or bylaws and, subject to applicable thresholds, request shareholders’ meetings, appoint certain corporate bodies and pursue liability against directors. Listed companies benefit from additional minority shareholder protections under the LMV.

Shareholders’ agreements are widely used in closely held companies, joint ventures and private equity transactions to regulate governance, voting, transfers and exit rights. Common provisions include rights of first refusal, tag-along and drag-along rights, lockups and consent requirements.

They are generally enforceable between the parties, provided they comply with mandatory provisions of LGSM and public policy. Provisions intended to bind the company, or third parties should generally be reflected in the by-laws.

Shareholder disputes may be resolved through negotiation, arbitration or judicial proceedings. LGSM provides statutory remedies, including challenges to unlawful corporate resolutions and certain minority shareholder rights, but does not provide a direct equivalent to common-law oppression or unfair prejudice remedies.

M&A in Mexico are primarily governed by the LGSM, which regulates corporate reorganisations, mergers, spin-offs and other corporate transactions. Public M&A transactions are additionally subject to the LMV, particularly with respect to tender offers, disclosure obligations, corporate governance and the protection of minority shareholders. Depending on the transaction, other statutes may also apply, including the LFCE, the LIE and sector-specific regulations.

Private M&A transactions are generally structured through negotiated agreements between the parties, while acquisitions involving publicly listed companies must comply with the mandatory procedures established under the LMV and the regulations issued by the CNBV.

The structure of an acquisition is typically driven by tax, regulatory and commercial considerations. The most common transaction structures are share acquisitions, asset acquisitions and statutory mergers. Share acquisitions are generally preferred where business continuity, licences, permits and contractual relationships are intended to remain in place, whereas asset acquisitions may be more appropriate when the purchaser seeks to acquire selected assets while limiting the assumption of liabilities. Statutory mergers are frequently used for internal reorganisations and post-closing integration.

Unlike certain common law jurisdictions, Mexican law does not provide for court-approved schemes of arrangement or similar judicial reorganisation mechanisms for corporate acquisitions. Mergers are implemented through the corporate approval procedures established under the LGSM, together with the applicable creditor protection and registration requirements. Public acquisitions involving listed companies may also trigger mandatory tender offer requirements under the LMV.

Regardless of the transaction structure, buyers typically conduct comprehensive legal, tax, financial and regulatory due diligence. Key considerations commonly include merger control clearance, foreign investment restrictions, sector-specific approvals, labour and employment matters, intellectual property, environmental compliance, tax contingencies and contractual change-of-control provisions. Transaction documents generally allocate risk through representations and warranties, indemnification mechanisms, covenants and, where appropriate, escrow or holdback arrangements.

One of the most significant recent developments affecting M&A practice was the reform to the LFCE, which replaced the former COFECE with the Comisión Nacional Antimonopolio (CNA) as Mexico’s competition authority. The reform also introduced changes to the merger control regime and strengthened the institutional framework for antitrust enforcement. In addition, recent amendments to the LMV continue to modernise the regulatory framework applicable to public companies and capital markets, with an impact on public M&A transactions.

Mexico’s capital markets are primarily governed by LMV and regulations issued by CNBV. The Secretaría de Hacienda y Crédito Público (Ministry of Treasury and Public Credit or SHCP) is responsible for broader financial policy and regulatory matters, while Banco de México exercises relevant powers concerning the functioning and stability of the financial system. Securities are principally traded through the BMV and the BIVA.

Public offerings generally require the relevant securities to be registered in the Registro Nacional de Valores (National Security Registry or RNV) and prior authorisation from CNBV, unless a statutory exemption or simplified regime applies. Issuers must generally prepare offering documentation and comply with applicable disclosure requirements, including financial and material information.

The process typically involves the issuer, legal and financial advisers, auditors, underwriters and, where applicable, the relevant securities exchange. Timing varies depending on the issuer, type of security, transaction structure, regulatory review and completeness of the information submitted.

Registration with RNV and listing on BMV or BIVA are distinct requirements, although they are generally co-ordinated as part of the same transaction. Issuers must comply with LMV, CNBV regulations, RNV requirements and the applicable rules of the relevant securities exchange.

LMV permits certain offerings to be conducted outside the ordinary public offering regime, including offerings made exclusively to institutional or qualified investors and certain other transactions meeting statutory requirements, such as specified offerings to a limited number of investors, employee stock plans and offerings to existing shareholders or partners. The availability and scope of these exemptions depend on the particular security and transaction.

Exempt offerings remain subject to applicable corporate, contractual, tax and other regulatory requirements. There is no general statutory holding period applicable to all securities offered under an exemption. However, securities that have not been registered for public offering may not subsequently be offered to the public without satisfying the applicable registration requirements, and contractual transfer restrictions may also apply.

Listed issuers in Mexico are subject to ongoing disclosure obligations intended to ensure that investors have timely and sufficient information regarding the issuer and its securities. These obligations are primarily governed by LMV, the applicable CNBV rules and the requirements of the relevant securities exchange. They generally include annual and quarterly financial reporting, corporate information and the disclosure of other information that may be relevant to investors’ decisions.

Issuers must also have appropriate internal procedures to identify and timely report material information. CNBV supervises compliance with these obligations, while the relevant securities exchange provides the principal mechanism for the dissemination of information to the market through its applicable electronic reporting systems.

Material events must generally be disclosed promptly once the issuer becomes aware of the relevant circumstances and the information is subject to disclosure under the applicable framework. The information is typically submitted electronically through the relevant securities exchange and subsequently made available to CNBV through the applicable regulatory reporting systems.

The applicable framework permits limited delays where the statutory conditions for maintaining confidentiality are satisfied. Once those conditions cease to apply, the issuer must make the corresponding disclosure to the market in accordance with the applicable requirements.

The LMV establishes a comprehensive framework addressing market abuse, insider trading and other conduct that may affect the integrity and proper functioning of the securities market. It prohibits the use or improper disclosure of inside information, as well as market manipulation and other practices intended to influence the price or quotation of securities through unlawful means. Inside information generally refers to non-public information relating to an issuer or relevant event that could materially influence the price or quotation of its securities.

These restrictions apply to persons who obtain inside information by virtue of their position, relationship with the issuer or other circumstances, and may extend beyond the issuer’s directors and officers to other persons with access to such information. Issuers and their relevant personnel are therefore expected to maintain appropriate controls over the handling and disclosure of sensitive information. Certain violations may also constitute criminal offences, including trading on the basis of inside information or unlawfully disclosing such information.

CNBV has broad supervisory, investigative and enforcement powers under the LMV. These include requesting information and documentation, conducting inspections and investigations, and imposing administrative sanctions for violations of applicable securities laws and regulations. Depending on the nature and severity of the violation, sanctions may include fines, suspension or disqualification from holding certain positions or participating in regulated activities.

The LMV establishes disclosure requirements designed to provide transparency regarding significant ownership positions and changes in shareholdings of listed issuers. These requirements apply primarily to issuers whose securities are registered in the RNV and to certain shareholders, related persons and other individuals whose positions or transactions may be relevant to the market. The applicable disclosure obligations may depend on the type of security, the nature of the person involved and the percentage or change in ownership.

For listed companies with ordinary shares, persons or groups acquiring, directly or indirectly, a position equal to or greater than 10% but less than 30% of the ordinary shares must generally disclose the acquisition to the public through the relevant securities exchange no later than the following business day. In addition, persons related to the issuer who directly or indirectly increase or decrease their participation by 5% are generally subject to a similar disclosure requirement. The LMV also establishes additional disclosure and reporting obligations for certain persons with access to inside information, directors, officers and other relevant persons, depending on their position and transactions.

These requirements are primarily applicable to listed issuers and the shareholders or other persons falling within the categories established by LMV and the applicable CNBV rules. The relevant information is generally disclosed through the securities exchange on which the issuer’s securities are listed, in accordance with the applicable reporting procedures and timeframes. Failure to comply with these disclosure obligations may result in administrative sanctions imposed by CNBV, including fines and other regulatory measures, depending on the nature and severity of the violation.

Mexico does not impose a single corporate compliance or internal control framework applicable to all companies. Requirements vary depending on the company’s activities and may arise from anti-corruption, anti-money laundering, tax, data protection, labour, environmental and sector-specific regulations. Listed and regulated companies may be subject to additional requirements concerning internal controls, risk management, and corporate oversight.

Companies should implement controls proportionate to their size, activities and risk profile, commonly including policies and procedures, assigned responsibilities, training, risk assessments, monitoring and reporting channels.

There is no general statutory whistleblowing regime applicable to all private companies. However, certain sectors and laws establish specific reporting obligations. Companies commonly adopt confidential reporting channels, investigation procedures and non-retaliation measures as a matter of good corporate governance.

Compliance risk should be overseen by the board or management through clear responsibilities, periodic risk assessments, internal controls, training, monitoring and escalation procedures. Listed and regulated companies should integrate these mechanisms into their broader governance and risk-management frameworks.

Secured transactions in Mexico are principally governed by the Ley General de Títulos y Operaciones de Crédito (General Law of Negotiable Instruments and Credit Transactions or LGTOC), together with the Código de Comercio and applicable civil and sector-specific legislation. Common security interests include pledges over movable assets, mortgages, security trusts and security assignments, including non-possessory security interests over movable assets.

Perfection generally requires compliance with the formalities applicable to the relevant collateral, which may include notarisation, delivery or control and registration. Movable security may be registered with the Registro Único de Garantías Mobiliarias (RUG), while real estate mortgages are generally registered with the relevant RPP. Priority is generally determined by applicable perfection and registration rules, including the timing of registration.

Acquisition financings commonly include pledges over shares or equity interests, security over material assets and receivables, guarantees and, where appropriate, security trusts. Where multiple lenders are involved, intercreditor agreements establish contractual payment priorities, enforcement rights and recoveries, while statutory perfection and priority rules continue to apply.

Recent amendments to the LGTOC, particularly those published in March 2024, have affected aspects of secured financing. Financing practice continues to focus on appropriate collateral selection, proper perfection and registration, and clear enforcement and intercreditor arrangements.

Commercial contracts in Mexico are primarily governed by the Código Civil Federal (Federal Civil Code or CCF), the Código de Comercio and applicable sector-specific legislation. Contracts are generally based on consent and freedom of contract, subject to mandatory law and public policy, and are binding once validly formed.

Valid formation generally requires consent, a lawful object and legal capacity. Consideration is not an independent requirement under Mexican law. Formalities depend on the transaction and may include written form, notarisation or registration.

Contracts may be invalid or subject to annulment due to defects in consent, lack of capacity, an unlawful object or purpose, or failure to comply with mandatory formalities. Consequences may include annulment, restitution and, where applicable, damages.

Interpretation generally considers the contractual wording, the parties’ intent and the agreement. Parties have broad flexibility to allocate risks through limitations of liability, indemnities, guarantees, termination rights and dispute-resolution provisions, subject to mandatory law and public policy. Good faith is relevant to contractual performance and interpretation, while Mexican law has no direct equivalent to the common-law doctrine of unconscionability.

The principal remedies for breach of contract in Mexico include specific performance, rescission or termination, damages and, where agreed, contractual penalties. The applicable remedy depends on the nature of the breach, the contract and the applicable law.

Termination or rescission may arise from a material breach, non-performance or other grounds established by law or contract. Commercial agreements commonly establish termination events, notice requirements and cure periods. Wrongful termination may result in liability for damages and other contractual consequences.

Mexican law recognises force majeure and acts of God where an unforeseeable or unavoidable event prevents performance without fault by the affected party. Depending on the circumstances, these events may suspend or exclude liability.

Mexico does not have a general statutory equivalent to the common-law doctrines of frustration of purpose or hardship applicable to all commercial contracts. Parties commonly address significant changes in circumstances through contractual mechanisms such as force majeure, material adverse change, price adjustments or renegotiation provisions.

Intellectual property considerations are an important part of commercial transactions in Mexico, particularly where the transaction involves technology, branding, content or proprietary information.

Industrial property, including patents and trade marks, is primarily governed by the Ley Federal de Protección a la Propiedad Industrial (Federal Law for the Protection of Industrial Property or LFPPI), while copyright is governed by the Ley Federal del Derecho de Autor (Federal Copyright Law or LFDA). Commercial agreements should clearly identify ownership and permitted uses of the relevant IP and address, as applicable, assignments, licences, territory, duration, confidentiality, improvements and enforcement rights. Assignments and licences should comply with the applicable statutory formalities and, where required or advisable, be recorded with the Instituto Mexicano de la Propiedad Industrial (IMPI). Trade secrets are protected under the specific regime established by LFPPI and through contractual confidentiality and information-security measures.

Ownership of IP created in a commercial relationship depends on the type of IP involved and the legal relationship between the parties. Employment, commissioned works and joint-development arrangements may be subject to different statutory rules, making it important for the relevant agreements to expressly address ownership, licensing rights, permitted uses, derivative works and rights to future developments. In joint-development projects, parties should also establish in advance how jointly developed IP will be owned, registered, licensed and commercialised, as well as how improvements and independently developed technology will be treated.

AI-generated content presents an evolving area of Mexican IP law. While the use of AI may raise questions concerning authorship, originality, infringement and ownership, the applicable framework should be assessed based on the degree of human contribution and the type of IP involved. Parties therefore increasingly address AI use contractually, including ownership of outputs, permitted uses of third-party models and training data, confidentiality, infringement risks and responsibility for AI-generated materials.

Infringement of IP rights may give rise to administrative, civil and, in certain circumstances, criminal consequences. IMPI has investigative and enforcement powers in relation to industrial property rights and may impose sanctions and order measures aimed at preventing or stopping infringement.

The principal consumer protection framework in Mexico is the Ley Federal de Protección al Consumidor (Federal Consumer Protection Law or LFPC), which regulates consumer contracts, information and advertising, unfair commercial practices and electronic commerce. Consumer-facing agreements must provide clear and accurate information and may not impose terms or practices prohibited by LFPC. The law also provides specific cancellation or withdrawal rights for certain transactions, including certain distance sales, and establishes additional protections for recurring subscriptions and memberships.

PROFECO is responsible for enforcing LFPC and may investigate complaints, conduct inspections, impose administrative sanctions and order corrective measures. Consumers may submit individual complaints and, where applicable, participate in collective actions or pursue judicial remedies.

LFPC prohibits misleading or abusive advertising and certain coercive commercial practices. In e-commerce, suppliers must generally disclose information regarding their identity, the goods or services, price, payment and delivery terms, applicable conditions and cancellation policies. PROFECO may monitor online businesses and require corrective measures or impose sanctions for non-compliance.

Merger control in Mexico is primarily governed by the Ley Federal de Competencia Económica (Federal Economic Competition Law or LFCE) and is currently administered by the Comisión Nacional Antimonopolio (CNA). The LFCE requires certain anti-competitive mergers to be authorised before closing where any of the statutory monetary or shareholding thresholds is exceeded. These include transactions exceeding 16 million times the applicable daily UMA, acquisitions of 30% or more of the assets or shares of an economic agent meeting the applicable 16 million UMA threshold, and transactions involving the accumulation of assets or capital exceeding 7.4 million UMA where the participating economic agents meet the applicable 40 million UMA threshold.

The CNA generally has 30 days to resolve a notified anti-competitive merger, calculated from receipt of the notification or, where applicable, the additional information requested. In exceptionally complex cases, the statutory period may be extended by up to 20 additional days. The substantive assessment focuses on whether the concentration may impede, diminish, damage or prevent competition and free market access, and the CNA may authorise the transaction, impose conditions or object to it.

An anti-competitive merger subject to mandatory notification may not be completed without prior authorisation. Transactions carried out in breach of the notification requirement do not produce legal effects, and the relevant acts may not be recorded in corporate books, formalised in a public instrument or registered with the RPC until the required authorisation has been obtained or the applicable statutory review period has elapsed. Failure to obtain the required authorisation may result in fines of up to 8% of the relevant economic agent’s income, while an unlawful anti-competitive merger may give rise to fines of up to 10% of income, in addition to potential civil or criminal liability where applicable.

The LFCE prohibits absolute and relative monopolistic practices, as well as unlawful anti-competitive mergers. The CNA may impose significant administrative fines, order the correction or suppression of anti-competitive conduct. Absolute monopolistic practices may result in fines of up to 15% of the relevant economic agent’s income, while relative monopolistic practices may result in fines of up to 10%.

Foreign investment in Mexico is primarily governed by the Ley de Inversión Extranjera (Foreign Investment Law or LIE). Foreign investors may generally participate in Mexican companies without a general ownership limit, subject to restrictions applicable to certain activities, and may be required to obtain CNIE authorisation or comply with registration and reporting obligations before the RNIE.

The LIE reserves certain activities to the Mexican State or Mexican nationals and establishes foreign ownership limits for others. Additional restrictions may apply in regulated sectors, including energy, telecommunications, broadcasting, transportation and financial services, as well as to certain real estate transactions.

Mexico does not have a standalone national security review regime comparable to CFIUS. National security and public-interest considerations may nevertheless be relevant under the foreign investment and sector-specific regulatory framework.

Mexico does not provide a general incentive programme exclusively for foreign investors. Incentives are generally sectoral, regional or project-specific, including tax incentives under Plan México 2025 and the Polos de Desarrollo Económico para el Bienestar. Recent policy has focused on attracting productive investment, strengthening supply chains and promoting nearshoring.

Private-sector data protection in Mexico is principally governed by the Ley Federal de Protección de Datos Personales en Posesión de los Particulares (Federal Law on Protection of Personal Data Held by Private Parties or LFPDPPP). The framework is supplemented by sector-specific rules, particularly in financial, healthcare and telecommunications activities. Following the 2025 institutional reforms, the Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales (INAI) was abolished, and its federal data-protection functions were transferred to other authorities, and LFPDPPP was amended accordingly.

Organisations must process personal data in accordance with the principles established by LFPDPPP, including lawfulness, purpose, proportionality, information and responsibility. They must generally provide a privacy notice explaining the purposes and conditions of processing and obtain consent where required, subject to statutory exceptions. Additional requirements apply to sensitive personal data. Organisations must also implement appropriate security measures, respect data-subject rights and properly address transfers of personal data to third parties.

Where a security breach materially affects individuals’ rights or interests, the organisation must notify the affected individuals and take the corrective measures required under the applicable framework. Organisations should therefore maintain appropriate procedures for identifying, assessing and responding to security incidents, including measures to mitigate their effects and address applicable notification obligations.

Mexico generally does not impose broad data-localisation requirements on private businesses. Cross-border transfers are permitted subject to LFPDPPP and its implementing rules, and businesses should ensure that their privacy notices and contractual arrangements properly address international transfers and that recipients assume the applicable data-protection obligations.

These requirements are particularly relevant for multinational groups using shared services, foreign affiliates or cloud providers. Businesses should assess the nature and purpose of each transfer, the parties involved and any applicable sector-specific requirements when structuring international data flows.

The principal anti-money laundering and counter-terrorist financing framework in Mexico is the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (Federal Law for the Prevention and Identification of Transactions with Resources of Illicit Origin or LFPIORPI). It applies to financial institutions and persons carrying out designated Actividades Vulnerables, including certain real estate, corporate, professional and high-value transactions. Obligations generally include identifying clients and beneficial controllers, maintaining records, implementing risk-based procedures and filing the applicable reports with the authorities. Recent amendments to LFPIORPI and its implementing regulations have strengthened beneficial-controller and compliance requirements.

Mexico does not operate a comprehensive autonomous economic sanctions regime equivalent to the US OFAC system. Restrictions may instead arise from Mexican foreign-trade, customs and export-control legislation, applicable permits and controls, and Mexico’s international obligations, including measures adopted through the United Nations. Businesses engaged in cross-border transactions should therefore assess counterparties, goods, destinations and applicable licences or restrictions. Non-compliance may result in administrative fines, seizure of goods, suspension or loss of permits and, depending on the conduct, criminal liability.

Anti-corruption and anti-bribery obligations arise primarily under the Ley General de Responsabilidades Administrativas (General Law of Administrative Responsibilities or LGRA), together with applicable criminal and sector-specific legislation. Companies may be subject to liability for certain serious administrative offences committed by individuals acting on their behalf to obtain a benefit for the company. Compliance programmes should therefore include a code of conduct, clear responsibilities, risk-based controls, training, monitoring and reporting mechanisms, with particular attention to interactions with public officials and third parties.

Enforcement powers vary according to the applicable regime. In AML, tax and customs matters, relevant authorities include the SAT and the Unidad de Inteligencia Financiera (UIF), while anti-corruption matters may involve federal or state administrative authorities and prosecutors. Depending on the applicable legislation, authorities may request information, conduct inspections or investigations, impose administrative sanctions and refer matters for criminal prosecution.

Environmental requirements in Mexico arise principally under the Ley General del Equilibrio Ecológico y la Protección al Ambiente (General Law of Ecological Balance and Environmental Protection or LGEEPA) and sector-specific legislation. Depending on the nature and location of a project, environmental impact authorisations, permits, licences and other approvals may be required. In corporate transactions involving industrial operations or potentially contaminated properties, due diligence should address historical contamination, permitting compliance, remediation obligations and potential environmental liabilities, as these risks may not be fully eliminated through contractual indemnities.

Mexico also has carbon-pricing mechanisms, including an emissions trading system and carbon-related fiscal measures. These requirements may be relevant to transactions involving industrial activities or businesses subject to emissions regulation and should be considered as part of the broader environmental and regulatory due diligence.

Climate-related litigation remains relatively developing in Mexico, although companies may face administrative or judicial proceedings concerning environmental damage, emissions, permits and regulatory compliance. Environmental liability may extend beyond the contractual allocation of risk between the parties, making historical contamination, permitting deficiencies and remediation obligations important considerations in acquisitions and other corporate transactions. Increasing regulatory and stakeholder attention to sustainability also makes environmental risks relevant to corporate governance and long-term business planning.

Employers must comply with the Ley Federal del Trabajo (Federal Labour Law or LFT) and applicable occupational health and safety requirements, including NOMs issued by the relevant authorities. Unlike jurisdictions with federal and provincial occupational health and safety systems, Mexico has a predominantly federal framework for labour and workplace safety matters, although state authorities may have enforcement or related responsibilities.

Licensing and permitting requirements vary significantly depending on the business activity and location. Common requirements may include environmental, land-use, construction, operating, health, customs and sector-specific permits. Regulated industries, including energy, financial services, pharmaceuticals, telecommunications and transportation, may be subject to additional authorisations, licences or concessions, and corporate transactions should assess whether these may be transferred, require prior regulatory approval or otherwise be affected by a change of control or asset transfer.

Mexico does not yet have a single comprehensive AI statute in force. The use of AI is currently governed through existing legal frameworks, including data protection, consumer protection, intellectual property, labour and sector-specific regulations, which may impose obligations relevant to transparency, responsible use and accountability depending on the application.

Several legislative proposals have been introduced to establish a broader AI framework addressing matters such as transparency, risk management and accountability. Accordingly, organisations should comply with the legal requirements currently applicable to their AI use while monitoring legislative developments and avoiding assumptions that a comprehensive AI-specific regime is already in force.

The applicable requirements will depend largely on the nature of the business and the transaction involved. Accordingly, companies should conduct a compliance assessment based on their specific activities and regulatory exposure rather than relying solely on a general corporate compliance framework.

Employment relationships in Mexico are principally governed by the LFT, together with the Constitution, social-security legislation and applicable NOMs. Mexican labour law establishes mandatory minimum standards regarding wages, working hours, rest periods, holidays, benefits, termination and workplace health and safety. Employers must also comply with social-security obligations before the Instituto Mexicano del Seguro Social (IMSS), as well as applicable housing, payroll and employment-related reporting requirements.

Termination of employment is generally governed by whether there is a legally recognised cause under LFT. Where an employer terminates without justified cause, the employee may generally be entitled to reinstatement or statutory severance, depending on the circumstances and applicable legal remedies. Where severance applies, it generally includes three months’ salary, together with other amounts required by law and, in applicable cases, 20 days’ salary per year of service.

Mexican law does not generally provide for a statutory notice period equivalent to those applicable in some common law jurisdictions; however, employers must comply with the formal requirements applicable to a justified termination and properly communicate the grounds for termination. Failure to establish the statutory cause or comply with applicable requirements may result in a wrongful dismissal claim. Constructive dismissal may also arise where the employer engages in conduct that legally entitles the employee to terminate the employment relationship and seek the corresponding compensation.

In M&A transactions, potential severance, reinstatement and other employment liabilities should therefore be reviewed as part of employment due diligence, particularly in connection with workforce changes and pending disputes.

Executive compensation arrangements in Mexico may include salary, bonuses, benefits, equity incentives and change-of-control arrangements, subject to applicable corporate, labour, securities and tax considerations. Equity-based compensation should be consistent with the company’s corporate documents and, where applicable, LMV and other securities requirements, particularly for listed companies. Change-of-control arrangements should clearly establish the applicable triggering events and payment or vesting consequences. The tax treatment will depend on the nature and structure of the compensation and should be considered when designing both cash and equity incentives.

Mexican law does not establish a broad statutory regime specifically governing post-employment non-compete covenants. Their enforceability must therefore be assessed in light of constitutional protections, including the freedom to work, as well as reasonableness and proportionality. Courts may scrutinise restrictions that disproportionately limit an individual’s ability to engage in lawful employment or business activities.

Confidentiality obligations are generally more defensible, particularly where they protect legitimate trade secrets or other confidential business information. Non-solicitation provisions may also be enforceable depending on their scope, duration, purpose and drafting. In practice, these restrictions should be narrowly tailored to protect legitimate business interests while avoiding unnecessary limitations on an individual’s ability to work.

Mexico recognises several forms of landholding, including private property, ejidal and communal land, and federal or other public property. Commercial real estate is generally held as private property and registered with the relevant public property registry. Ejidal and communal land is subject to a separate legal regime, including specific rules governing its use, conversion and transfer, which should be addressed as part of real estate due diligence.

The acquisition of real property by foreign individuals and entities is primarily governed by Article 27 of the Constitution and the LIE. Outside the restricted zone, foreign individuals and companies may generally acquire real property, subject to the applicable requirements and procedures before the Secretaría de Relaciones Exteriores (SRE). Foreign purchasers must also comply with the relevant registration, tax and notarial requirements applicable to the transaction.

Within the restricted zone, consisting of land located within 100 kilometres of Mexico’s borders or 50 kilometres of its coastlines, foreign individuals and entities may not directly acquire ownership of land. Residential property in the restricted zone may generally be acquired through a fideicomiso established with a Mexican financial institution and authorised by SRE, allowing the foreign beneficiary to use and enjoy the property while legal title is held by the trustee.

Mexican companies with foreign investment may directly acquire certain non-residential real property within the restricted zone, subject to the requirements established by LIE and applicable regulations. The structure of the acquisition intended use of the property and status of the purchaser should therefore be reviewed at the outset of a transaction, together with applicable registration, tax and regulatory requirements.

Commercial real estate transactions in Mexico are governed principally by the applicable state civil legislation, together with tax, zoning, environmental, planning and registration requirements. Ownership and encumbrances are generally recorded with the relevant RPP, typically through a folio real system. Real estate due diligence should confirm title, liens and other encumbrances, permitted use, easements, zoning, and the seller’s authority to dispose of the property.

Acquisitions and dispositions generally require review of title and encumbrances, zoning and permitted use, corporate authority, tax matters, environmental compliance, existing leases, permits and litigation. Environmental due diligence is particularly relevant for industrial properties or sites with potentially contaminated histories, as contractual indemnities do not necessarily eliminate statutory environmental liabilities. Title insurance is available in Mexico, although it is not as commonly used as in certain common law jurisdictions.

Commercial mortgage financing generally involves a properly documented and registered hipoteca over the relevant real property. Lenders should conduct title and lien searches and ensure that the mortgage is duly recorded with the applicable RPP, as registration is an important element in establishing priority against competing rights. Enforcement is generally judicial and may result in foreclosure and sale of the property, subject to applicable procedural and creditor-protection rules.

Commercial leases are largely governed by the applicable state civil legislation and the terms agreed by the parties. Lease agreements should clearly address the term, rent and adjustments, renewal rights, permitted use, assignment and subletting, maintenance, insurance, default and termination. Commercial parties generally have significant contractual flexibility, although mandatory local rules may apply; assignment and subletting should therefore be expressly regulated, and landlords commonly require prior consent.

Recent developments include the continued digitisation and modernisation of property-registration and investment procedures, together with regulatory developments affecting environmental, energy, infrastructure and foreign-investment matters. For transactions involving foreign investors or property in the restricted zone, current SRE procedures, fees and applicable filing requirements should be confirmed at the time of closing. More broadly, commercial real estate transactions increasingly require an integrated review of title, zoning, environmental, foreign-investment and sector-specific regulatory matters.