Doing business in Mexico

Mexico City
Paseo de los Tamarindos 150-PB
Bosques de las Lomas
05120, México, Distrito Federal
Tel. +52 (55) 5091-0000

Monterrey
Ave. Ricardo Margain 444
Torre Norte Mezzanine A
66265, San Pedro Garza García, N.L.
Tel. +52 (81) 8220-1500

DOING BUSINESS IN MEXICO
PREFACE .............................................................................................................................................................................................. 1
I.

ESSENTIAL FACTS ABOUT MEXICO ........................................................................................................................................ 2

A. Geographic and Historic Information ................................................................................................................................................. 2
B. Key Economic Information ................................................................................................................................................................. 2
C. Federal Government .......................................................................................................................................................................... 3
II.

LEGAL SYSTEM ......................................................................................................................................................................... 4

A. General .............................................................................................................................................................................................. 4
B. Civil Law and Comparison to Common Law ...................................................................................................................................... 4
C. Federal and State Legislation ............................................................................................................................................................ 4
III.

JUDICIAL SYSTEM ................................................................................................................................................................... 6

A. Mexican Courts & Litigation ............................................................................................................................................................... 6
1.
Federal Courts ......................................................................................................................................................................... 6
2.
The Federal Judiciary Council (Consejo de la Judicatura Federal “FJC”) ............................................................................... 7
3.
State Courts ............................................................................................................................................................................. 7
4.
Court Clerks ............................................................................................................................................................................. 8
5.
District Attorneys ...................................................................................................................................................................... 8
6.
Administrative and Tax Courts ................................................................................................................................................. 8
B. Criminal Law ...................................................................................................................................................................................... 8
C. General Comments about Litigation in Mexico ................................................................................................................................ 10
D. Arbitration ........................................................................................................................................................................................ 11
IV.
1.
2.
3.
4.
V.

IMPORTANT POSITIONS TO KNOW ..................................................................................................................................... 13
Lawyer ................................................................................................................................................................................... 13
Public Notary ....................................................................................................................................................................... 13
Customs Broker .................................................................................................................................................................... 14
Accountants and Auditors ..................................................................................................................................................... 14
PRACTICAL DIFFERENCES ABOUT DOING BUSINESS ..................................................................................................... 15

A. Introduction ...................................................................................................................................................................................... 15

B. Tips on Dealing with your Mexican Counterpart .............................................................................................................................. 15
1.
Avoid Misunderstandings ....................................................................................................................................................... 15
2.
Learn the Local Business Schedule....................................................................................................................................... 16
3.
Dress Appropriately ............................................................................................................................................................... 16
4.
Take the Time Necessary to Build Personal Relationships ................................................................................................... 16
5.
Be Polite ................................................................................................................................................................................ 17
6.
Expect Generosity and Be Prepared to Reciprocate ............................................................................................................. 17
7.
Understand the Importance of Meals and Other Social Events ............................................................................................. 17
8.
Select the Appropriate Means of Communication.................................................................................................................. 18
9.
Prepare for Uncertainty and Delay ........................................................................................................................................ 18
10.
Lack of Guidance ................................................................................................................................................................ 18
11.
Need for Bureaucratic Approval .......................................................................................................................................... 18
12.
Develop Realistic Time Lines .............................................................................................................................................. 19
13.
Need for Regular Follow-Up ................................................................................................................................................ 19
14.
Allow More Time.................................................................................................................................................................. 19
VI.

TRADE AND INVESTMENT TREATIES ................................................................................................................................. 21

A.

Introduction ............................................................................................................................................................................... 21

B.

Free Trade Agreements ............................................................................................................................................................ 21
General Overview .................................................................................................................................................................. 21
Free Trade Agreements in Effect ........................................................................................................................................... 21
Fundamental aspects of existing free trade agreements. ...................................................................................................... 23
Bilateral Investment Treaties ................................................................................................................................................. 24

1.
2.
3.
4.
VII.

REGULATION OF FOREIGN INVESTMENT .......................................................................................................................... 28

A.

Foreign Investment ..................................................................................................................................................................... 28

B.

Economic Activities that are Restricted under the FIL ................................................................................................................ 28

C.

Investment by Foreign Corporations .......................................................................................................................................... 29

D.

Neutral Investment ..................................................................................................................................................................... 29

E.

National Foreign Investment Registry ......................................................................................................................................... 29

F.

Acquisition of Real Estate .......................................................................................................................................................... 30
Mexican Companies .............................................................................................................................................................. 30
Mexican Corporations without Foreign Investment ................................................................................................................ 31
Non-Mexican Individuals ........................................................................................................................................................ 31

1.
2.
3.
VIII.

CORPORATE STRUCTURES FOR DOING BUSINESS ....................................................................................................... 32

A.

Representative Office ................................................................................................................................................................. 32

B.

Branch Office .............................................................................................................................................................................. 32

C.

Partnership Venture (a.k.a. “Contractual Joint Venture”) ........................................................................................................... 33

D.

Corporate Presence ................................................................................................................................................................... 33

E.

Limited Liability Company (Sociedad de Responsabilidad Limitada “SRL”) ............................................................................... 33

F.

Stock Company (Sociedad Anónima “S.A.”) ............................................................................................................................... 33

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G.

Variable Capital Companies (Capital Variable “CV”) ................................................................................................................. 34

H.

Process for Incorporating a Mexican Company.......................................................................................................................... 34
1.
Select Corporate Name ......................................................................................................................................................... 34
2.
Charter and By-laws .............................................................................................................................................................. 34
3.
Appearance before a Notary Public. Registration .................................................................................................................. 34
4.
Directors, Statutory Auditor and Officers ............................................................................................................................... 35
5.
Post Incorporation Registrations ............................................................................................................................................ 35
6.
Operating a Mexican Company ............................................................................................................................................. 36
7.
Minority Rights in a Stock Corporation (SA) .......................................................................................................................... 38
8.
Conflict of Interest .................................................................................................................................................................. 39
9.
Distribution of Earnings and Payment of Dividends. Legal Reserve..................................................................................... 39
10.
Accounting Records and Book-keeping .............................................................................................................................. 39
11.
Mergers and Spin-offs ......................................................................................................................................................... 39
12.
Dissolution and Liquidation of a Mexican Company ............................................................................................................ 41
13.
Corporate Governance Issues ............................................................................................................................................ 41
14.
Publicly Traded Companies ................................................................................................................................................ 43

IX.

GENERAL PRINCIPLES OF CONTRACT LAW ...................................................................................................................... 44
1.
General Principles of Contract ............................................................................................................................................... 44
2.
Construction of a Contract ..................................................................................................................................................... 45
3.
Termination of an Agreement ................................................................................................................................................ 46
4.
Contractual Liability ............................................................................................................................................................... 48
5.
Election of Jurisdiction ........................................................................................................................................................... 49
6.
Submission to Local Courts ................................................................................................................................................... 49
7.
Arbitration .............................................................................................................................................................................. 49
8.
Confidentiality Agreements .................................................................................................................................................... 49
9.
Non-Compete Provisions ....................................................................................................................................................... 50
10. Asset vs. Stock Acquisitions ..................................................................................................................................................... 51

X.

E-COMMERCE ........................................................................................................................................................................... 52

A.

Applicable Laws and Jurisdiction ............................................................................................................................................... 52

B.

E-Commerce Law ....................................................................................................................................................................... 52

C.

On-line Consumer Protection ..................................................................................................................................................... 53

D.

Privacy Notice............................................................................................................................................................................. 54

E.

Electronic Invoices...................................................................................................................................................................... 54

F.

Electronic Evidence in Judicial Proceedings .............................................................................................................................. 54

G

Domain Name Registration ......................................................................................................................................................... 55

XI.

COMPETITION LAW ................................................................................................................................................................ 56

A.

General ....................................................................................................................................................................................... 56

B.
1.
2.
C.

Specific Practices or Restraints .................................................................................................................................................. 56
Absolute Monopolistic Practices (Horizontal Restraints) ....................................................................................................... 56
Relative Monopolistic Practices (Vertical Restraints)............................................................................................................. 57
Concentrations ........................................................................................................................................................................... 58

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D.

Privatizations, Publications and Opinions .................................................................................................................................. 60

E.

Private Actions ............................................................................................................................................................................ 60

F.

Leniency Program and Settlement .............................................................................................................................................. 60

G.

Statute of Limitations .................................................................................................................................................................. 61

H.

Possible Amendments to Competition Regulation ..................................................................................................................... 61

XII.

LABOR ISSUES ...................................................................................................................................................................... 62

A.

General ....................................................................................................................................................................................... 62

B.

Legal Framework ........................................................................................................................................................................ 62

C.
1.
2.
3.
4.

The Concept of the Employment Relationship ........................................................................................................................... 63
Regulation of employment through written agreements ........................................................................................................ 63
Subjects of Employment ........................................................................................................................................................ 63
Term of Employment ............................................................................................................................................................. 64
Employer Substitution ............................................................................................................................................................ 64

1.
2.
3.
4.
5.
6.

Minimum Terms and Conditions for Rendering Services ........................................................................................................... 64
Salary. Base Salary & Integrated Salary............................................................................................................................... 64
Working Hours ....................................................................................................................................................................... 65
Vacations and legal holidays ................................................................................................................................................. 65
Christmas bonus .................................................................................................................................................................... 66
Profit sharing .......................................................................................................................................................................... 66
Contractual benefits ............................................................................................................................................................... 66

1.
2.
3.
4.

Collective Labor Relationships ................................................................................................................................................... 66
Unions .................................................................................................................................................................................... 66
Collective Bargaining Agreement .......................................................................................................................................... 67
"Contrato-Ley"........................................................................................................................................................................ 67
Internal Working Regulations ................................................................................................................................................. 68

D.

E.

F.

Health and Welfare of Employees at Work Sites ........................................................................................................................ 68

G.

Labor Conflicts in Mexico ........................................................................................................................................................... 68

H.

Individual Conflicts...................................................................................................................................................................... 69

I.

Collective conflicts ........................................................................................................................................................................ 70

J.

Termination of Employment ...................................................................................................................................................... 70
Individual labor relationships ................................................................................................................................................. 70
Collective Labor Relationships............................................................................................................................................... 71

1.
2.
K.

Social Security System ............................................................................................................................................................... 72

L.

Low Cost Housing Fund .............................................................................................................................................................. 73

XIII.
A.
1.
2.

TAXATION .............................................................................................................................................................................. 74
Income Tax ................................................................................................................................................................................. 74
Subjects of the Tax ................................................................................................................................................................ 74
Residency for Tax Purposes .................................................................................................................................................. 74

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3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
B.

Permanent Establishment ...................................................................................................................................................... 74
Determination of the Tax and Rate ........................................................................................................................................ 75
Offset or Credit of the Tax ..................................................................................................................................................... 75
Taxable Income ..................................................................................................................................................................... 76
Timing of Accruable Income .................................................................................................................................................. 77
Allowed Deductions ............................................................................................................................................................... 77
Net Operating Losses ............................................................................................................................................................ 79
Tax Consolidation................................................................................................................................................................ 79
Regime Applicable to Dividends Distributed ....................................................................................................................... 80
Income Tax Applicable to Resident Individuals ................................................................................................................... 80
Non-Resident Taxation ........................................................................................................................................................ 81
Tax Representative ............................................................................................................................................................. 82
Tax Treaties ........................................................................................................................................................................ 83
Agreements Regarding Exchange of Information ............................................................................................................... 83
Controlled Foreign Company .............................................................................................................................................. 84
Related party Transactions; Transfer Pricing ...................................................................................................................... 84
Mutual Administrative Assistance on Fiscal Matters ........................................................................................................... 85
USA/Mexico FATCA (Foreign Account Tax Compliance Act) ............................................................................................. 86

1.
2.

Single Rate Business Tax ("IETU") ........................................................................................................................................... 86
General Overview .................................................................................................................................................................. 86
Tax Elements ......................................................................................................................................................................... 87

1.
2.
3.
4.
5.
6.
7.

Value Added Tax (“IVA”) ............................................................................................................................................................ 88
General Characteristics of the VAT ....................................................................................................................................... 88
VAT Rates ............................................................................................................................................................................. 89
Taxed Transactions ............................................................................................................................................................... 89
Persons Required to Withhold the Tax .................................................................................................................................. 91
Obligations of Taxpayers ....................................................................................................................................................... 91
Filing of the Corresponding Tax Return ................................................................................................................................. 91
Crediting of the Tax ............................................................................................................................................................... 91

C.

D.

Cash Deposit Tax ....................................................................................................................................................................... 92

E.

Other Issues ............................................................................................................................................................................... 92
1.
Obligation to Register with the Federal Taxpayers’ Registry ................................................................................................. 92
2.
Supporting documentation
……………………………………………………………………………………………………….92
3.
Profit Sharing ......................................................................................................................................................................... 93
4.
Audits ..................................................................................................................................................................................... 93
5.
Late Payment Penalties ......................................................................................................................................................... 94
6.
Statute of Limitations ............................................................................................................................................................. 94
7.
State Taxes ............................................................................................................................................................................ 94
8.
Payroll Tax ............................................................................................................................................................................. 94
9.
Real Estate Transfer Tax ....................................................................................................................................................... 94
10. Excise Taxes ......................................................................................................................................................................... 94

XIV.

CUSTOMS ............................................................................................................................................................................. 95

A.

Background ................................................................................................................................................................................ 95

B.

Clearance of Goods .................................................................................................................................................................... 95

C.

Tariff considerations, Regulation Measures and Non-tariff Restrictions ..................................................................................... 95

D.

Customs Regimes ...................................................................................................................................................................... 96

E.

Customs Violations and Fines .................................................................................................................................................... 96

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F.

Customs Brokers and Attorneys ................................................................................................................................................. 96

G.

Dumping ..................................................................................................................................................................................... 97
Mexican Legal Framework ..................................................................................................................................................... 97
What is Dumping Practice? ................................................................................................................................................... 97
Standing to Petition an Anti-dumping Investigation ............................................................................................................... 98
Injury ...................................................................................................................................................................................... 98
Course of the Investigation .................................................................................................................................................... 99
Anti-dumping or Countervailing Duties ................................................................................................................................ 100
Appeals ................................................................................................................................................................................ 100
Review of Anti-Dumping Duties ........................................................................................................................................... 101

1.
2.
3.
4.
5.
6.
7.
8.
XV.

MAQUILADORA (IN-BOND ASSEMBLY PLANTS) AND EXPORT PROGRAMS .............................................................. 102

A.

Overview of Export Programs................................................................................................................................................... 102

B.

Maquiladoras ............................................................................................................................................................................ 102
Overview .................................................................................................................................................................................. 102
Special Customs Treatment ..................................................................................................................................................... 104
Process to Establish a Maquiladora......................................................................................................................................... 106
Maquiladora Sales to the Domestic Market ............................................................................................................................. 107
Transfer or Sale of Merchandise .............................................................................................................................................. 107
Value Added Tax (Impuesto al Valor Agregado) ..................................................................................................................... 107
Transfer pricing in the Maquiladora Industry ............................................................................................................................ 108

1.
2.
3.
4.
5.
6.
7.
XVI.

SECURITIES ........................................................................................................................................................................ 111

A.

General ..................................................................................................................................................................................... 111

B.

Mexican Stock Exchange ......................................................................................................................................................... 111

C.

Securities/Public Offers ............................................................................................................................................................ 111

D.

Approval and Registration of a Public Offer ............................................................................................................................. 112

E.

Listing with the International Quotation System of the BMV ..................................................................................................... 113

F.

Ongoing Reporting Obligations and other Relevant Information............................................................................................... 114

G.

Minority Rights ......................................................................................................................................................................... 114

H.

Underwriting Agreements ......................................................................................................................................................... 115

XVII.
A.

BANKING ............................................................................................................................................................................. 116
General ..................................................................................................................................................................................... 116

B.
1.
2.
3.

Authorities................................................................................................................................................................................. 117
Bank of Mexico .................................................................................................................................................................... 117
Ministry of Finance and Public Credit .................................................................................................................................. 117
National Banking and Securities Commission ..................................................................................................................... 117

1.
2.
3.

Protection of the Interests of the Public .................................................................................................................................... 118
National Commission for the Protection and Defense of Users of Financial Services ......................................................... 118
Institute for the Protection of Bank Savings ......................................................................................................................... 118
Credit Information Entities ................................................................................................................................................... 118

C.

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D.

Financial Agents ....................................................................................................................................................................... 118
Commercial Banks ............................................................................................................................................................... 118
Affiliates of Foreign Financial Entities .................................................................................................................................. 119
Development Banks ............................................................................................................................................................. 119
Non-Banking Financial Agents ............................................................................................................................................ 119

1.
2.
3.
4.

XVIII. SECURED TRANSACTIONS ................................................................................................................................................. 121
A.

Principles Applicable to Security Interests................................................................................................................................ 121

B.

Personal Property ..................................................................................................................................................................... 121
Personal Guarantee (Fianza) .............................................................................................................................................. 121
Pledge .................................................................................................................................................................................. 121
Trust Agreements ................................................................................................................................................................ 122
Chattel Mortgage ................................................................................................................................................................. 122

1.
2.
3.
4.
C.

Mortgage of Real Property ....................................................................................................................................................... 123

XIX.

GOVERNMENT PROCUREMENT ...................................................................................................................................... 124

A.

General Scope.......................................................................................................................................................................... 124

B.

Contracting Procedures ............................................................................................................................................................ 124
1. Competitive Bidding ................................................................................................................................................................. 124
2. Restricted Invitation and Direct Award ..................................................................................................................................... 125

C.

Execution of a Procurement Contract ....................................................................................................................................... 126

D.

Sanctions .................................................................................................................................................................................. 126

E.

Challenges and Remedies ........................................................................................................................................................ 127

F.

Conciliation Process ................................................................................................................................................................. 127

G.

Dispute Resolution ................................................................................................................................................................... 127

H.

Pemex ...................................................................................................................................................................................... 127

XX.

INTELLECTUAL PROPERTY .............................................................................................................................................. 129

A.

General ..................................................................................................................................................................................... 129

B.

Copyright .................................................................................................................................................................................. 129

C.

Trademarks .............................................................................................................................................................................. 130

D.

Trade Names and Slogans ....................................................................................................................................................... 131

E.

Patents...................................................................................................................................................................................... 131

F.

Trade Secrets ........................................................................................................................................................................... 132

G.

Franchising and Transfer of Technology .................................................................................................................................. 132

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H.

Enforcement ............................................................................................................................................................................. 132

XXI.

IMMIGRATION ..................................................................................................................................................................... 134

A.

Introduction ............................................................................................................................................................................... 134

B.

Immigration Status.................................................................................................................................................................... 134
Tourist .................................................................................................................................................................................. 134
Working Visas for Non-Immigrant and for Immigrant ........................................................................................................... 134
Permanent Resident (Inmigrado) ......................................................................................................................................... 135

1.
2.
3.
C.

Working Visa Options ............................................................................................................................................................... 135

D.

General Procedures for Securing Immigrant or Non-Immigrant Visas ..................................................................................... 136
Entrance Procedure ............................................................................................................................................................. 136
Change of Immigration Status or Characteristic .................................................................................................................. 137

1.
2.
E.

Documentation Requirements .................................................................................................................................................. 137

F.

Extension of Stay in Mexico ...................................................................................................................................................... 137

G.

Right to Import Personal Property ............................................................................................................................................ 137

XXII.

ENVIRONMENTAL LAWS ................................................................................................................................................... 138

A.

Overview .................................................................................................................................................................................. 138

B.

Authorities................................................................................................................................................................................. 139

C.

Areas of Exclusive Federal Jurisdiction .................................................................................................................................... 139

D.

Environmental Impact ............................................................................................................................................................... 140

E.

Air Pollution; the Sole Environmental License LAU .................................................................................................................. 141

F.

Hazardous Waste ..................................................................................................................................................................... 142

G.

Soil Contamination and Remediation ....................................................................................................................................... 143

H.

Water ........................................................................................................................................................................................ 144

I.

Environmental Audits and Voluntary Compliance ...................................................................................................................... 146

J.

Sanctions .................................................................................................................................................................................. 147

XXIII.

TELECOMMUNICATIONS ................................................................................................................................................... 150

A.

General ..................................................................................................................................................................................... 150

B.

Jurisdiction................................................................................................................................................................................ 151

C.

Radio-frequency Spectrum ....................................................................................................................................................... 151

D.

Telecommunications Networks................................................................................................................................................. 152

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E.

Satellite Communications ......................................................................................................................................................... 152

F.

Value Added Services ............................................................................................................................................................... 153

G.

Re-sellers (comercializadoras) ................................................................................................................................................. 153

H.

Dominant Carriers .................................................................................................................................................................... 154

I.

Broadcasting Services ................................................................................................................................................................ 154

J.

Foreign Investment Restrictions and Investment Mechanisms ................................................................................................. 154

K.

Special Tax ............................................................................................................................................................................... 155

XXIV.

A.

REGULATED INDUSTRIES ................................................................................................................................................. 156

I.
II.
III.

Ports ......................................................................................................................................................................................... 156
Authority………………………………………………………………………………………………..……………………………..156
Regulation ……………………………………………………………………………………………………………………………156
Foreign Investment …………………………………………………………………………………............................................157

I.
II.
III.

Navigation .............................................................................................................................................................................. 157
Authority……………………………………………………………………………………………………………………….. ……..157
Regulation ……………………………………………………………………………………………………………………………157

I.
II.
III.

Railroads ................................................................................................................................................................................ 158
Authority………………………………………………………………………………………………..……………………………..159
Regulation ……………………………………………………………………………………………………………………………159

I.
II.
III.

Highways ............................................................................................................................................................................... 159
Authority………………………………………………………………………………………………..……………………………..159
Regulation ……………………………………………………………………………………………………………………………159

I.
II.
III.

Aviation .................................................................................................................................................................................. 160
Authority………………………………………………………………………………………………..……………………………..160
Regulation ……………………………………………………………………………………………………………………………160

I.
II.
III.

Airports ................................................................................................................................................................................... 161
Authority………………………………………………………………………………………………..……………………………...161
Regulation …………………………………………………………………………………………………………………………….161
Foreign Investment ………………………………………………………………………………….............................................161

B.

C.

D.

E.

F.

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XXV.

MINING ................................................................................................................................................................................. 162

A.

General ..................................................................................................................................................................................... 162

B.

Priority of Mining Activities........................................................................................................................................................ 162

C.

Agencies / Authority.................................................................................................................................................................. 163

D.

Mining Concessions and Assignments ..................................................................................................................................... 163

E.

The Mining Public Registry ....................................................................................................................................................... 166

F.

Inspection, Monitoring and Sanctions ....................................................................................................................................... 166

XXVI.

BANKRUPTCY ..................................................................................................................................................................... 168

A.

Insolvency Proceedings ........................................................................................................................................................... 168

B.

Causes for Declaration in Reorganization (Concurso Mercantil) .............................................................................................. 169

C.

Procedure for the Declaration of Reorganization...................................................................................................................... 169

D.

Judgment Declaring Reorganization (Concurso Mercantil) ...................................................................................................... 170

E.

Existing Contracts ..................................................................................................................................................................... 170

F.

Acknowledgement of Credits .................................................................................................................................................... 170

G.

Bankruptcy or Liquidation Proceedings (Quiebra).................................................................................................................... 171

Acronyms Most Commonly Used ....................................................................................................................................................... 172

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Preface
Whether driven by national policies or new technologies, laws and regulations will frequently change, and
as lawyers and counsel a firm is required to respond to the needs of our clients. Since it was founded in
1948, Barrera, Siqueiros y Torres Landa, S.C. has been at the forefront in providing legal services with
excellence to its clients. At all times, we have endeavored to be in a position not only to respond, but to
be ahead and anticipate the needs of our clients.
In the course of providing services, a multitude of areas have been addressed and legal specialties have
arisen in the recent past. We have always attempted to be at the forefront of new legal developments
around investment, technology, financial services and products, export and trade programs,
privatizations, government procurement, telecommunications, e-commerce, labor, competition/antitrust,
securitization and financial structures, and more recently, energy. Some areas have continuously evolved
such as taxation with such speed and depth that keeping–up has been both a necessity and a challenge.
In celebration of our sixtieth anniversary in 2008 we endeavored to prepare for our clients and friends a
summary of Mexican laws affecting business. Many lawyers from the firm participated in the project,
contributing with their knowledge and expertise. We have committed to keep the summary updated.
Although we trust you will find this summary useful, the purpose of this publication is not to provide legal
advise nor present a complete analysis of the issues covered. The authors that participated in the
publication, as well as Barrera, Siqueiros y Torres Landa, S.C., are not responsible in any form for
decision or actions taken based on the content of this summary.

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I.

Essential Facts About Mexico

A. Geographic and Historic Information
•

Name. Although the conventional short form is “Mexico”, the official name of the country is “United
Mexican States.”

•

Population. Mexico’s population exceeds 112 million according to the 2010 census. The median age
is 26 years. It is the most populous Spanish-speaking country in the world. The population of the
metropolitan area of Mexico City alone is about 18 million, making it the largest urban concentration
of people in the Western Hemisphere.

•

Flag and Seal. The flag consists of three equal vertical bands of green (hoist side), white, and red.
The seal—an eagle perched on a cactus holding a snake in its beak—is centered in the white band.
The symbol on the seal comes from a legend at the time of the Aztecs. Guided by their god
Huitzilopochtli, the Aztec people sought a place where an eagle landed on a prickly-pear cactus,
eating a snake. After years of wandering, they found the sign on a small swampy island in Lake
Texcoco. They named their new home Tenochtitlan (“Place of the Prickly Pear Cactus”) and built a
city, now Mexico City, on the site in A.D. 1325.

•

Area. Mexico is one of the largest countries in the hemisphere with an area of approximately 2 million
square kilometers (1,972,500 square kilometers; 761,600 square miles).

•

Summary historical background. Mexico was originally inhabited by a number of Amerindian
civilizations, including the Olmecs, Mayas, Toltecs and Aztecs. Mexico came under Spanish rule for
three centuries before finally claiming independence early in the 19th century on September 16, 1821.
Contrary to popular belief abroad, independence was not on “Cinco de Mayo”. Shortly after
independence, a plan for a constitutional monarchy failed and a republic was proclaimed in December
1822.

•

In 1910, severe social and economic problems culminated in a revolution that lasted for ten years and
gave rise to the 1917 Constitution.
Although recent financial troubles in México and abroad threw Mexico into its worst recession in over
half a century, the nation continues to make a recovery. Ongoing economic and social concerns
include low real wages, underemployment for a large segment of the population, inequitable income
distribution, and few advancement opportunities for the largely Amerindian population in the
impoverished southern states.

•

Political Division. Mexico is a Federal Republic divided into 31 States and the Federal District
(“Distrito Federal”).
Mexico City is located precisely in the Federal District, although its metropolitan area extends into the
neighboring State of Mexico. Guadalajara and Monterrey are two major industrial hubs. Other
important cities include Tijuana, Ciudad Juárez, León, Querétaro, Puebla, Veracruz, Villahermosa and
Mérida.

B. Key Economic Information
•

In 2010, Mexico was the 12th largest economy in the world. It is an active member of the
Organization for Economic Cooperation and Development (“OECD”) and the World Trade

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Organization (“WTO”). Likewise, Mexico has an important bilateral and multilateral trade network,
including NAFTA, the European Union and the Asian Pacific Economic Council (“APEC”).

•

Mexico shares 2,000 miles of U.S. border, thus putting it in a unique strategic position for increasing
its trade with the greatest single national market in the world.

•

Mexico has 7,000 miles of seashores that, as noted in the European Union Political, Cooperation and
Free Trade Agreement, make it an ideal place to engage in trade regardless of the origin of materials
or destination of finished products.

•

Among the most prominent industries in the country are oil, tourism, mining, and automotive, textile,
steel and electronics manufacturing.

•

Expanding beyond its former export foundation in oil, Mexico has increased the size and variety of
exports, which now even span sophisticated technical devices and services, including construction
and financial services.

•

Reliance on oil has substantially been reduced. The basis of the Mexican economy is primarily
manufacturing, although the recent prices in the price of crude oil have provoked a greater share of
the exports of this commodity.

•

A large pool of Mexican companies participate in export-oriented activities. Foreign investors provide
training and technology to upgrade Mexican companies and bring them up to international standards.

C. Federal Government
•

The Federal Government is composed of three branches—executive, legislative and judicial—each
with specific powers granted by the Constitution.

•

The President heads the Executive Branch and is assisted by 18 Secretaries or Ministers as well as
by the Attorney General (whose appointment requires the consent of the Senate). The President is
both the Head of State and government. There is no Vice-President.

•

A bicameral federal congress comprises the Legislative Branch and is divided into:
(a) The Senate, with 128 members who serve six--year terms
(b) The House of Representatives (Cámara de Diputados), with 500 members is completely renewed
each three-year term.

•

The Mexican Supreme Court of Justice, comprised by 11 Justices, heads the Judiciary. After
nomination by the President and appointment by the Senate, Justices serve 15-year terms. Under
the Supreme Court sit federal Circuit Courts (Collegiate and Unitary) and District Courts.

3
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II.

Legal System

A. General
•

International business people and foreign-owned corporations doing business in Mexico must directly
and indirectly deal with the Mexican legal system, even if they do not have a local physical presence.
Businesses might encounter Mexico's system through an international contract—even one to be
wholly performed outside of Mexico—if a Mexican company or individual is also a party. Such
contracts may cover a wide variety of legal relationships, including distribution of products, the
granting of franchises, or the transfer of technology.

•

Accordingly, people and entities doing business in Mexico should have at least a general working
knowledge of its legal system. International legal counsel with clients doing business in Mexico
should have a more detailed knowledge of Mexican practices, laws and courts. All should understand
that if they are to accomplish their objectives they must work within the system, not against it.

B. Civil Law and Comparison to Common Law
•

Mexico is a so-called “civil law” country, while some other countries such as the United States of
America, Canada, and England are “common law” countries. Unlike common law courts, Mexican
courts do not follow “stare decisis” or precedent in the common-law sense. Furthermore, under the
Mexican system there are no trials by jury.

•

The origins of Mexico's legal system are both ancient and classical, based on the Greek, Roman,
Spanish and French legal systems. Due to this background, our reliance in form over substance is
usually over-estimated. Although the Mexican system shares more in common with other legal
systems throughout the world—especially those in Latin America and continental Europe—than it
does with the U.S. legal system, after NAFTA’s adoption, Mexico has modeled certain legislation after
U.S. law and practices (antitrust and environmental, among others). Likewise, Mexico’s participation
in the OECD and other international groups (e.g. the United Nations Commission on International
Trade Law “UNCITRAL”) has led to the to implementation of business practices and legislation in
accordance with international standards. Some examples of the above are the adoption of the
UNCITRAL Model Laws on International Commercial Arbitration, Transnational Insolvency and
Electronic Commerce.

C. Federal and State Legislation
•

The current Federal Constitution was enacted on February 5, 1917, and has undergone many
amendments since then to adjust to the changing realities of the country. The Constitution has been
amended continuously, especially during the last 30 years, adapting to Mexico’s full democracy
integration into the world trade arena.

•

The Constitution outlines a system where most major areas—including commerce, natural resources,
labor, mining, telecommunications, federal crimes and federal taxes—are reserved for regulation only
by legislative action of the Federal Congress. Given that states may not implement laws in those
areas, federal laws on such matters apply uniformly throughout the country. On the other hand,
4

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certain specific areas (education, health, environment, etc.) are subject to shared-authority among the
federal, state and local level of government.
•

States have their own Constitution, as well as their own civil and criminal codes for local matters.
Likewise, States legislate on local operating permits and environmental matters that are not otherwise
reserved for federal legislation. Municipalities issue zoning and land use regulations and levy real
estate taxes.

5
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III.

Judicial System

A. Mexican Courts & Litigation
1.

Federal Courts

Mexican courts are divided between federal and state levels of government. The 11-Justice Mexican
Supreme Court of Justice is the highest Court within our country. The Mexican Supreme Court sits either
in bloc (Pleno) or as a 5-member Chamber. The First Chamber deals with civil and criminal issues while
the Second Chamber deals with Administrative and Labor matters. One Justice is appointed among
his/her peers as a 4-year President. The President of the Supreme Court also serves as President of the
Federal Judiciary Council, which oversees and monitors ethical and administrative tasks of Federal
Judges and Magistrates. The Mexican Supreme Court has reserved jurisdiction itself to the most
important issues of constitutional law: (i) unconstitutionality of laws, regulations and treaties in those
parts where there has not been a previous and clear precedent; (ii) direct interpretation of the
Constitution; (iii) constitutional actions or controversies brought by other powers of the state (Legislative
or Executive).
Below the Supreme Court remain the Collegiate Circuit Courts, Unitary Circuit Courts and Federal District
Courts. Federal courts mostly deal with amparo actions, federal crimes, commercial and bankruptcy
cases and federal civil cases. Normally, federal courts have specialized subject matter jurisdiction but it is
not uncommon that they cluster all those subject within themselves. The constitutional suit or “amparo
proceedings” is the federal lawsuit commenced by a person (natural or legal entity) when there is a
violation of rights by a governmental authority. Filing a constitutional action is a right of a person that is
subject to high-technical scrutiny. The main principles of this action are: (i) it may only be asserted
against acts of authorities; thus, (ii) it is an action of a person against abuse of governmental deeds in any
of its spheres—Legislative, Judicial or Executive; local, state or federal; (iii) it is exceptional in nature and
normally there has to be an exhaustion of ordinary means of challenge; (iv) the individual involved must
provide evidence showing having been personal and directly “affected in its rights” or “expected rights.”
Amparos deal with constitutional issues. The amparo proceedings may be “direct” or “indirect.” Collegiate
Circuit Courts hear “direct amparos”. Direct amparos are filed against resolutions or judgments that end a
jurisdictional (labor, administrative and civil) procedure. Direct amparos most closely resemble an
ultimate challenge. On the other hand, District Courts hear “indirect amparos,” which result in a speedy
trial. Judgments rendered by District Courts may be challenged through a federal appeal that will be
heard by a Collegiate Circuit Court. Indirect amparos are highly technical and, basically, will be filed
against (ii) direct violations of individual rights; (ii) final resolutions not rendered by labor, administrative
and civil courts; (iii) irreparable harm caused in a judicial proceedings; and, (iv) acts or laws that have
been applied for first time in detriment of the individual.
The Federal Judiciary (through the Supreme Court and the Collegiate Circuit Courts) may create binding
precedents known as “jurisprudence” (jurisprudencia). To create jurisprudence there must be five-noninterrupted cases resolved in the same sense. Likewise, jurisprudence is created when the Supreme
Court resolves a “contradiction” held between two or more Collegiate Circuit Courts to settle for once and
all the proper binding precedent.
One of the most attractive features of the amparo is the possibility of obtaining a stay of proceedings or
court injunction. In no other area of law is a “stay of proceedings” more widely used with more precedent
created than in amparo proceedings. Thus, to be able to obtain an injunction or “suspension,” as called in
Mexico, is normally the appeal for lawyers to file an amparo. Any litigation undertaken in Mexico, whether
6
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in the private or public sector, will inevitably expose the parties involved to an amparo—what it is and how
it works.
There has been a quite recent amendment to the Mexican Constitution related to amparo proceedings
that will give rise to a new Amparo Law. The amendment is currently in the process of being approved by
at least 17 States of the Federation before becoming effective. If approved, a new amparo law will be
enacted with important amendments in the following topics: (i) standing; (ii) jurisdiction of the circuits to
create legal precedents; (iii) modifications of the 5-precedent rule of binding precedents or jurisprudence;
(i) to incorporate those human rights set forth in international treaties.

Mexico, particularly in its larger cities, is experiencing a trend of increasing judicial specialization: judges
presiding over specific areas. In larger cities, where this trend is more apparent—such as Mexico City,
Monterrey and Guadalajara—there are specialized courts for civil and commercial, labor, criminal, and
administrative cases. Nevertheless, despite the shift towards specialization, all cities still have a multiarea judge or magistrate charged with resolving civil, commercial, criminal, labor, and administrative
cases. Because multidisciplinary judges are responsible for presiding over such a broad swatch of cases,
they often lack the comprehensive knowledge specifically necessary to be effective in any particularly
specialized or highly regulated area.
Furthermore, Federal District Courts also hear cases as trial courts in commercial and federal civil cases.
Although commercial law is federal in nature, a constitutional provision authorizes dual-jurisdiction; i.e.
that both local and federal courts can hear commercial cases. Consequently, it is very common for local
courts to try the majority of such cases due to the fact that local courts outnumber federal courts and that
federal courts are devoted primarily to amparo proceedings. When federal courts hear federal civil or
commercial cases the Unitary Circuit Courts act as Court of Appeals.
Finally, bankruptcy is another jurisdiction that Federal Courts have absorbed. Thus, trying a bankruptcy
case (either as reorganization or bankruptcy) has to be filed before a federal court.

2.

The Federal Judiciary Council (Consejo de la Judicatura Federal “FJC”)

The FJC monitors performance of all members of the federal judiciary, except for the members of the
Supreme Court of Justice, to ensure propriety and compliance with ethics standards. There are 7
members of the Council headed by the President of the Supreme Court of Justice.
Unlike other countries, federal judges are not “elected” in Mexico but rather are appointed through a
selection process conducted by the FJC. Being part of the full judiciary for an extensive amount of time
typically serves both as a baseline qualification and manner to flag potential candidates. Low-salaries for
the Federal Judiciary—a vital fact that informs one’s understanding or justifying corruption—is slowly
becoming a reminiscence of the past. Currently, the Federal judiciary at all levels is well-paid. This fact
overrides the possibility for a Judge to have alternative sources of income that are currently forbidden.
Judges can participate in academic activities and lecturing as such.

3.

State Courts

State or local courts (i.e., courts within the Federal District) are usually devoted to civil and commercial
cases and they specialize depending upon the subject matter: family, leases, wills, and normal civil and
commercial cases. Depending upon the amount involved there are minor courts whose judgments are
not subject to appeal.

7
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Local Courts’ Judgments are subject to appeals before the Superior Court of Justice of each state and the
Federal District. Local/State Courts depend upon the government of each state. Since the budget of
each state so varies, then, salaries of Judges do too. Likewise, appointments differ form state to state.
Most of the states have a surveillance authority to monitor ethical and proper performance of Judges.

4.

Court Clerks

Federal or local judges have an extensive workload. It is not uncommon for a Judge to handle between
800 and 1000 dockets every year that could last from simple collection cases to very complex issues of
law. Likewise, proceedings are largely written and, therefore, the “day in court” as known in other
countries has not the same meaning in Mexico. Hearings are not normally presided by the Judge but
rather by the Court Clerk or Secretary to record the appearances and arguments in a hearing or can
certify as to the content of a docket. This flaw will change in the near future at least in the criminal area
due to important amendments within the Mexican Constitution that makes compulsory for the Judge to be
present in all hearings. Court clerks may prepare drafts of important rulings or the judgment itself.
However, the content of the judgment is the Judge’s primary responsibility. This activity provides Court
Clerks sufficient experience that serve them to escalate in the judiciary until such timing that they can be
appointed as Judges.

5.

District Attorneys

Public prosecutors or District Attorneys (Ministerio Público) are relevant actors in criminal proceedings as
shown below but they play certain role in bankruptcy, family, estate, and amparo proceedings. They
speak for the general public. In reality, it is odd that public prosecutors take a leading role in those
proceedings since they usually devote their time to criminal cases and their importance is underestimated
in those areas outside such scope.

6.

Administrative and Tax Courts

Administrative and Tax Courts have become more important since there has been an important growth in
governmental activity in all spheres: federal, state and local. Likewise, there has been an increasing
trend to increase jurisdiction to administrative and tax courts in order to decrease the workload of the
federal district courts. The Tax and Administrative Justice Court (Tribunal Federal de Justicia Fiscal y
Administratíva “TFJFA”) is comprised of a Superior Chamber located in the Federal District and twentyone Regional Chambers located within Mexico. The Tax and Administrative Court has jurisdiction to hear
cases related to definitive resolutions rendered in administrative law and federal taxes and general
ordinances different from regulations.
It is worth mentioning that most administrative authorities can serve as self-review authorities if the
individual challenges the resolution so rendered through the review-recourse. After this challenge, the
individual could normally file an action/challenge before the Tax and Administrative Court as set forth
above. Likewise, most states have a State Administrative Court dealing or that deals with resolutions
rendered by local/State authorities.

B. Criminal Law
•

Criminal law in Mexico has both Federal and State nature depending certain features provided by
statute. Thus, there is a Federal Criminal Code and Criminal Codes for each of the thirty-one states
and the Federal District. Notwithstanding, there are federal and state statutes that set forth criminal
provisions although not inserted within the criminal code in such areas as tax, labor, trademark and

8
12.2013

copyrights laws. Likewise, there is the same number of Procedural Criminal Codes. State Criminal
and Procedural Codes were mostly modeled after the Codes of the Federal District.

•

Mexican criminal law follows international standards and protects rights under the Constitution such
as: (i) there is no crime unless specifically provided by law “nullum crime sine lege penale”; (ii) a
Court of law is the only body entitled to impose punishment; (iii) no retroactive application of criminal
laws “ex-post facto laws”; (iv) the benefit for the accused to receive better conditions derived from ex
post facto laws; (v) all persons are innocent unless proven guilty (guilty beyond “reasonable doubt”);
(vi) in case of doubt, the accused must be acquitted/“in dubio pro reo”; (vii) possibility to obtain bail
when no serious crimes are involved; (viii) the right of the accused to remain silent during the
proceedings; (ix) the burden of proof falls under the public prosecutor; (x) the right to be put face-toface (careo) before the persons that testify against the accused; (xi) the right to offer all pertinent
evidence available; (xii) the right of the accused not to provide statements before the police and not
to remain for more than 48 hours under the District Attorney’s detention except for organized crimes.
This also encompasses an express prohibition and severe punishment of any torture or similar
practice (xiii) the right to receive from a competent Court of Law an order for holding a criminal
procedure (auto de vinculación a proceso) before a Judge or to be released –subject to further
investigation-; (xiv) the right to have a defense counsel and if defendant refuses to appoint one, then
the State will appoint a public defense attorney; and (xv) the right to be judged between four months
and one year.

•

Recently there was an important amendment to our Constitution to forbid the death penalty that was
held for many years in our Constitution as a reminiscence of the past since neither the Federal nor
the State Criminal Codes so implemented. Likewise, there is no life sentence as such. In the same
context, Mexico has neither jury trials nor grand jury to make formal indictments.

•

The Constitution provides that a person that is accused for committing a crime has the right to obtain
bail, subject to there being no serious crime involved. Federal legislature has followed a different
path from certain State Statutes. For example, the Federal Procedural Criminal Code sets forth a
detailed and exhaustive list of crimes that are considered serious where no bail will be allowed. On
the contrary, the Federal District Code of Criminal Procedural follows a simpler rule whereby if the
sum of the minimum and maximum imprisonment punishment divided into two neither equals nor
surpasses five years, then, bail is allowed (i.e. 3 to 9 years /2 = 6 years; therefore, the Judge will
deny bail).

•

Currently, the main parties within the criminal proceedings are the public prosecutor or District
Attorney, the defense counsel (defending the accused) and the Judge. Public or state defense
counsel are subject to workload and, unfortunately, time to defend effectively is minimal. Public
prosecutors (Ministerio Público) play a key role in the criminal proceedings since they have a dualrole. Once a crime has occurred notice should be given to the Public Prosecutor that will act as an
investigatory body and public faith authority. It has the authority to grant bail in those cases where no
serious crimes are involved and the person is under the public prosecutor’s detention. The public
prosecutor will have a group of policemen and investigators under his/her command. Once all
investigations have been carried out (including depose witnesses, experts and sub-poena relevant
persons), then, it will formally indict the accused person before a competent criminal Court. Once this
indictment has occurred (ejercicio de la acción penal), a competent criminal court will issue an arrest
warrant (orden de aprehensión), to detain the accused and put him/her before the trial-criminal court.

9
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•

Mexican lawmakers have tried to modernize criminal law and have implemented several important
amendments that tend to balance the rights of an accused person vis-a-vis the victim of a crime.
Currently, the “victim of a crime” has the right to be informed, collaborate with the District Attorney in
the proceedings, to offer evidence, to receive medical and psychological treatment and receive relief
in the form of monetary compensation. In the same token, other important amendments are aimed to
make federal criminal proceedings faster. As part of this speedy trial, there is a new emphasis in oral
proceedings and the Judge’s intervention to ensure that rights of the accused are duly respected.
Other States are reproducing this model in order to guarantee the respect to the rights to a fair trial
and due process.

•

Due to a recent constitutional amendment launched in mid 2008, the main features of criminal law will
modify drastically to have a more accusatory (in contrast to inquisitive) and to favor orality rather than
written proceedings.

C. General Comments about Litigation in Mexico
•

Mexico is not per se a litigious society. Largely because litigation is quite expensive (even though
courts do not charge filing fees), awarding damages and lost profits is not an easy endeavor, and
there are no punitive damages; proceedings tend to be quite lengthy with a strong reliance on form
rather than substance, and it is quite difficult to recover legal fees. Likewise, Mexican law provides a
different source for trying cases: civil, commercial, administrative, criminal, etc. although trial practice
has not reached the complexity and degree of specialization that other countries currently have.
Thus, a civil trial-lawyer will cover family, monetary, real estate, estate, professional malpractice and
related items. Commercial lawyers will encompass corporate litigation, bankruptcy, breach of
contracts, collaterals foreclosures and alike. Notwithstanding, it is more common to find true
specialists although they will also manage to handle other areas of law within certain degree of
expertise. Thus, there are three main types of legal counsel: (i) general practitioners; (ii) smalllitigation boutiques; and, (iii) one-stop or full-service law firms. Contingency fees are not uncommon
and are mostly used for collection cases. Combined fix-rates are more used nowadays.

•

However, there has been an increasing trend towards specialization and trying new cases.
Legislative changes have created a new kind of State liability (direct and objective) in federal, state
and local spheres. Unfortunately, it will only encompass “irregular administrative acts” and do not
include acts or omissions of the legislative and judicial errors. Another area that has experienced
certain potential is actions for minority protection that are not followed under labor but rather civil
laws. Likewise, there is a strong support to introduce newer and more effective rules for “class
actions”. Beware of the fact that most civil and commercial cases could end in a criminal court since
they could be subject to certain strategy from one of the parties to press the other to settle. One
common adage under Mexican law is “a bad settlement is better than a good litigation”.

•

Litigation in Mexico differs from trying a case abroad. There are no jury-trials. Proceedings are
written-based rather than holding the “day-in-court” as known in Anglo-Saxon countries. Pre-trial
discovery is very limited and not even close to what the practice in other countries is. Rules of
procedure are mostly considered a matter of public order, and, therefore, there is very little scope to
modify the statutory rules. Preparing a complaint (or a response) is probably the most important
activity during the proceedings since once filed it cannot be subject of subsequent modification or
amendment, unless there has not been service of process to the other party (in the case of the
complaint). The Court will not grant extensions to answer a pleading or otherwise since legal terms
10

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are mandatory. Cases are more written-based than oral, and therefore, it is important to write
pleadings with clarity. There are no amended complaints or responses.

•

Due to the fact that Mexican law has limited discovery and there are strict rules as to the filing of
evidence and cross-examination and no prior deposition of witnesses, procedures therefore tend to
follow more formal or legal defenses than important fact-disclosure. Among those formalities it is very
frequent to challenge the authority of the attorney-in-fact appearing on behalf of one of the parties. In
this token, powers of attorney coming from abroad are a common source of challenge and, therefore,
it is important to pay special care when drafting them.

•

Another important difference from trying cases in other countries is the fact that Courts will not award
punitive, consequential or indirect damages.
Mexican law follows a “direct-and-immediateconsequence”-of-the-breach test. This applies for both damages and lost profits. In practice, it is
difficult to obtain multi-million dollar awards on damages unless there is a “liquidated damages
clause” that will avoid proving the existence of damages and would rather be aimed to evidence the
existence of the breach, and hence, the penalty application. Arbitration cases pose a little more
damage-flexibility as to awarding damages but always subject to such “golden rule”.

•

Litigation in Mexico is not an easy task. Mexico’s statutes still rely heavily on formalistic issues over
the substance of the dispute. Judges are work loaded and the time to be devoted to the case is
minimal. Thus, there is a huge task for trial-attorneys to call the attention of the Judges and Court
Clerks to address the merits of the case in order not to have the case dismissed for formalistic issues
that will serve for the “statistic” but not for judgment-quality. Legal costs are outdated. Trying cases
outside of the big three cities becomes much more difficult for the lack of experience of the judiciary
for certain complex business contracts or torts. Thus, having all these ingredients altogether make it
difficult for a business person (and even to non-Mexican legal counsel), to understand the inner works
of litigation in Mexico. In fairness we must say that the Judiciary is making its best efforts to improve
facilities to dignify administration of justice, as in the case of the Federal District.

D. Arbitration
•

The complexities of a global world, and the difficulties present in convincing a foreign party to have a
forum choice-clause to Mexican courts, have led parties to choose arbitration to resolve disputes in
commercial transactions. Mexico is an arbitration-oriented country that has modeled its Commercial
Code to international standards (mainly the 1985 UNCITRAL Model Law. Mexico is a party to both
the 1958 New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards and
the 1975-Inter-Amercian Convention on International Commercial Arbitration).

•

International treaties ratified and adopted by Mexico, current legislation and an increasing and openminded support of the Mexican Courts will have to provide a growing confidence that arbitration
agreements and awards are to be recognized and enforced. There is an increasing consciousness
that only in exceptional circumstances these will be either set-aside or their recognition and
enforcement denied. Foreign judgments also can be indeed enforced although they follow different
rules since there is no international treaty dealing with those issues as, by contrast, the 1958 New
York Convention.

•

There are several domestic and foreign organizations specialized in arbitration such as the Mexican
Arbitration Center (Centro de Arbitraje de Mexico “CAM”), Mexican Chapter of the International
11

12.2013

Chamber of Commerce (“ICC”), and the Arbitration Commission of the National Chamber of
Commerce – (Cámara Nacionál del Comercio “CANACO”) that have been very active in fostering
arbitration in our country.
•

There has been a quite recent amendment in January 2011 to foster and improve arbitration. The
amendment’s scope extends to assistance of courts, referral to arbitration, provisional measures,
setting aside proceedings and recognition and enforcement of arbitration awards, among other
changes.

12
12.2013

IV. Important Positions to Know
1.

Lawyer

•

Mexican lawyers normally course a five-year law school program. While studying or immediately after
graduating from law school, individuals usually work for a firm or government agency as a clerks or
interns (pasante) until they write a thesis and pass an oral exam to become licensed (Abogado or
Licenciado en Derecho). After passing the licensing exam (that may be administered by the law
school attended), individuals are addressed as Licenciado, abbreviated as "Lic." when written before
the attorney’s name. There are no independent bar exams, and the Ministry of Education grants the
licenses (cédula profesional) to practice law.

•

In Spanish “licenciado” is the first degree awarded at the university level; it corresponds to a
bachelor’s degree. Although there are “licenciados” in numerous academic disciplines such as
economics, history, and business, the title is generally identified with the law degree.

•

Although teaching techniques are evolving, current teaching in law school is based on a modern
version of the lecture method, which allows students to ask questions and engage in classroom
discussion. Because case study is not part of the curriculum, the Socratic method is unknown,
although there has been an increasing interest for such system and a new impetus for gathering a
master degree-abroad and mainly in non-Spanish speaking countries. This is specially so in certain
areas where oral skills and rhetoric are essential (such as criminal law and arbitration).

•

Mexican lawyers are licensed to practice throughout Mexico, not in individual states. There is no
integrated bar or requirement to join a bar association. Rather, bar associations in Mexico operate as
voluntary associations. Thus, there is not a bar exam that has to be taken or admitted, but there is
current discussion to that end. Therefore, the “disbarment” concept does not resemble to the USEnglish concept and rather has to be treated as a civil-criminal behavior. The Mexican Bar
Association (Barra Mexicana de Abogados “BMA”) is the more serious and recognized bar
association.

2.

Public Notary

•

Public Notaries in Mexico are empowered by local governments with the authority to assert “publica
fides” upon the events they witness or as compulsory formality to certain legal acts.

•

Becoming a Notary Public is a lengthy process although in some states this may vary. In Mexico City
becoming a notary public implies an approval exam of his “peers” and members of the government.
In other entities, upon invitation by the government, a lawyer who has apprenticed for a number of
years with another Notary Public takes an exam and, if he passes, receives a governmental permit to
practice.

•

A number of documents and agreements need to be created or validated by a Notary Public in order
to be fully enforceable in Mexico - mainly real estate ownership transfers, real estate guaranties,
incorporations, powers of attorney and wills.
13

12.2013

Doing business in Mexico

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