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Mexican Legal Information Q & A

【Q & A on how to advance to Mexican Market】

Q1. What kinds of forms to do business in Mexico are?
A1: There are four ways to enter Mexico.
(1) sole proprietorship
(2) Local corporation
(3) Branch and representative office
(4) Joint venture (Asociación en Participación)

Q2. What will be the responsibility for sole proprietorship or joint ventures?
A2: Business owner of sole proprietorship are directly responsible for their business obligations. On the other hand, a joint venture is a business form that a partner (asociado) that provides products and services and a business partner (asociante) under a contract in a specific speculative business. Asociado will be responsible only for scope of own contribution and Asociente will be responsible for the business and related obligations.

Q3. What are the forms of company in Mexico?
A3: There are the following seven forms in accordance with the Commercial law “Ley General Sociedades Mercantiles”.
(1) Unlimited partnership (Sociedad en Nombre Colectivo)
(2) Limited partnership (Sociedad en Comandita Simple)
(3) Limited liability company (Sociedad de Responsabilidad Limitada)
(4) Corporation (Sociedad Anónima)
(5) Joint-stock limited partnership (Sociedad en Comandita por Acciones)
(6) Corporative (Sociedad Cooperativa)
(7) Simplified corporation (Sociedad por Acciones Simplificada)
In addition, there is a form of limited liability company called Investment promotion corporation (Sociedad Anónima Promotora de Inverción) in the Securities Market Law promulgated in 2005 (Ley de Mercado de Valores), but it is said that adoption of Japanese companies is extremely small.

Q4. What is the difference between a public company and a private company in Mexico?
A4: When a public company is defined as a listed company, the company becomes a public corporation (Sociedad Anónima Bursátil) or an investment promotion public corporation (Sociedad Anónima Promotora de Inversión Bursátil) and is also subject to the Securities Market Law. Listed companies are obligated to establish an auditing body, and various other rules such as information disclosure will be applied.

Q5. Is it possible for a foreign company’s branch to operate in the same way as a local corporation?
A5: Even if it is a branch of a foreign company, if it is established to satisfy legal requirements and has the necessary licenses and approvals, in principle it is possible to develop activities in Mexico. The flow of procedures for establishment is as follows.
(1) Preparation of notarial deed for representation rights to branch managers and lawyers and registration articles of incorporation
(2) Notice of branch establishment to the Foreign Investment Office of Ministry of Economy
(3) The Notarial deed of (1) and the confirmation of the notice of (2) are combined into one notarial deed.
(Although it is not a legally required procedure, it is a certificate that proves the legal establishment of a branch.)
(4) Commercial registration
(5) Acquisition of RFC number (cf. Q7)
(5) Foreign capital registration

Q6. What is the difference between a local corporation and a branch office?
A6: In the case of a local corporation, it has an independent legal entity different from its parent company, and the corporation is treated as a Mexican citizen. Also, since the parent company is a different entity from this local corporation, if the local corporation takes the form of a limited liability company, the responsibility of the parent company for its activities will be limited within the scope of investment. On the other hand, in the case of a branch of a foreign company, the subject of commercial registration in Mexico is a corporation outside of Mexico, and it will be treated as a foreigner, and will be subject to restrictions on foreigners such as land acquisition. In addition, since it is not an independent entity from a corporation outside of Mexico, the corporation that opened the branch must bear unlimited responsibility for the activities of its branch.

Q7. Is it possible for a foreign company's representative office to operate in the same way as a local corporation?
A7: So-called representative offices are foreign corporations stipulated in Article 2736 of the Civil Code according to the Foreign Investment Law (Ley de Inversión Extranjera), which is able to conduct gathering information or managing distribution, not to conduct commercial transaction. Therefore, it is not possible to conduct general business like a local corporation. In addition, as described in Q6., it will be treated as a foreigner, and of course you will be subject to restrictions on foreigners.

Q8. What is the difference between a representative office and a branch office?
A8: In Mexico, branches are considered to be “entities that conduct business activities under normal conditions” as stipulated in the Foreign Investment Law (Ley de Inversión Extranjera). In the case of a branch office, according to the Foreign Investment Law, it must be registered as a foreign capital (Registro Nacional de Inversiones Extranjeras).

Q9. Can the company be named freely?
A9: As a procedure for establishing a company, it is necessary to obtain a business name permit from the Ministry of Economy. This is because the use of a trademark that conflicts with a registered trademark as an element of its own business name or company name is a violation of the Industrial Property Law. When applying for permission, you can enter up to three trade names that you want to use in order of preference.

Q10. What kind of procedure is necessary for company establishment?
A10: Establishing a company in Mexico is a kind of contract, but it is necessary to make it a notarial deed. In other words, after drafting a notarial document containing a company establishment contract by a notary, the parties sign it in the presence of a notary, and the notary also signs it, then the company is legally established. In addition, since the perfection requirement for establishment of a company is registration, a commercial registration is made using a certified copy of the notarial deed of establishment. In addition, the registration for Federal Tax Authority (Registro Federal de Contribuyentes) is done to obtain a number (RFC number) issued by the National Tax Authority. In addition, companies with foreign capital must obtain foreign investment registration (foreign capital registration). Without an RFC number, administrative procedures, opening a bank account, issuing a regular invoice, etc. are not possible, and foreign companies without foreign capital registration cannot effectively carry out various legal acts. All of these procedures are essential.

Q11. What is a calvo clause?
A11: In Mexico, there is a calvo clause that is mandatory for companies that allow foreign investment to be included in the Articles of Incorporation. As a result, foreign shareholders, etc. of the company will be treated in the same way as the nationals with respect to their investment and any rights derived therefrom, and will not seek the protection of their own government, and if they violate it, they are considered that they agree to be confiscated their rights in Mexico.

Q12. Is it possible to issue classified stocks in Mexico?
A12: A company can issue different types of shares, each with different rights.

Q13. What is the minimum capital required to establish a company in Mexico?
A13: There is no minimum capital to establish a local corporation.

Q14. Is it necessary to include a Mexican as a shareholder when setting up a company in Mexico?
A14: In principle, there are no special restrictions on becoming a shareholder, regardless of whether you are a corporation, individual, nationality or Mexican resident. In addition, the Foreign Investment Law (Ley de Inversión Extranjera) prohibits some entries and regulates the entry rate. For more details, please refer to “Q & A on Mexican Foreign Capital Regulations”.

Q15. Is it necessary to appoint a corporate auditor in Mexico?
A15: In the case of a corporation, it is necessary to have a corporate auditor (Comisario) as a supervisory body. In addition, such auditor must not be i) persons lacking ability to act, ii) workers of the company, of shareholders who hold more than 25% of the company's capital, and of companies which the company holds more than 50% of the capital, iii) lineal relatives by blood of, collateral relatives by blood within the fourth degree of kinship of, and relatives by affinity within the second degree of the company directors, are not allowed.

Q16. What kind of company is a small company in Mexico?
A16: In Mexico, companies with 11 to 30 employees and annual sales of more than 4 million pesos and less than 1 billion pesos fall under the category of small companies (Pequeñas Empresas). In addition, companies with 10 or fewer employees and annual sales of 4 million pesos or less are micro companies (Microempresas), and those with 31 to 100 employees and annual sales of 1 billion pesos or more and less than 2.5 billion pesos are medium-sized companies (Medianas Empresas).

Q17. Is there a concept of a dormant company in Mexico?
A17: In the General Commercial Company Law, the word “Sociedad irregular” can be used to refer to a company that has not been registered as a corporation or a company that has been established for an illegal purpose. The word “Sociedad Durmiente” can be used to refer to a company that has not operated could not be confirmed. However, the Andres Manuel Lopez Obrador administration has also raised the eradication of this dormant company as an agenda, which is generally considered a concept.

Q18. Is it necessary to go to Mexico when establishing a corporation?
A18: The founder of a corporation is required to sign the articles of incorporation in the presence of a notary public, but it can also be delegated to a resident of Mexico. In case that the founder is in Japan, the power of attorney that obtained the notarization by notary public and the Apostille by the Ministry of Foreign Affairs in Japan, after being signed, will allow the Mexican resident's person to proceed.

Q19. “S.C.” can be found after the company name, what kind of corporate form is it?
A19: “S.C.” is a form of company under the Federal Civil Code (Código Civil Federal), and is often adopted by organizations that aim to provide professional services such as law, accounting, and consulting. However, it is not allowed to engage in certain commercial activities as stipulated in the Commercial Code (Código de Comercio).

Q20. Why are S.A. (Sociedad Anónima) and S.de R.L. (Sociedad de Responsabilidad Limitada) so popular in Mexican companies?
A20: It is considered as a major factor that in case of S.A. or S. de RL, even if the company goes bankrupt, the investor does not have to pay the full amount of the debt to the company creditors and investor's liability is limited which is liable to the extent of his/her investment.

Q21. What are the differences between S.A. (Sociedad Anónima) and S. de R.L. (Sociedad de Responsabilidad Limitada)?
A21: The major differences are the requirements for the transfer of equities or shares and the organizational structure. In case of S.A., the transfer of shares is unrestricted in principle, and its organizational structure requires the establishment of a shareholders' meeting, and the appointment of a director and an auditor. In case of S. de R.L., it is required the consent of the majority of the partners to transfer the equity, and its organizational structure is sufficient for the establishment of a partners’ meeting and executive officers. An auditor is optional.

【Q & A on Mexican Companies Act (Ley General de Sociedades Mercantiles)】

Q1: I heard that the Mexican Companies Act has recently changed. Is that true?
A1: Amendments to Article 73 and Article 129 of the Companies Act, which are expected to affect Japanese companies, were implemented on December 15, 2018. In the case of a Japanese company, it is likely to take the form of a corporation (Sociedad Anónima) or Limited Liability Company (Sociedad de Responsabilidad Limitada), The amendment has made it is to notify
shareholders or partners situation through the electronic system of the Ministry of Economy. At the same time, companies that have not registered with the electronic system must also be registered.

Q2: How many shareholders are needed?
A2: It is necessary to have at least two shareholders. However, in the form of simplified corporation (Sociedad por Acciones Simplificada), added by the amendment of the Companies Act on March 14, 2016, the establishment of a single company is permitted. Although it can be a person, since there is an upper limit on annual sales, it is considered that there is little merit in taking this form in reality.

Q3: Is there a face value stock system?
A3: There is a face value stock system. The company is prohibited from issuing shares discounted share price.

Q4: Is it possible for shareholders to make a written resolution?
A4: According to the Mexican Companies Act, if the general meeting of partners of a limited company stipulates that there is no need to convene in the Articles of Incorporation, a written resolution with a certificate of delivery can be made.

Q5: Is it difficult to reduce capital?
A5: By adopting a variable capital system, it is possible to reduce capital without changing the company's Articles of Incorporation. In the case of the variable capital system, the company's capital is divided into fixed capital that is required in the Articles of Incorporation and variable capital that is not required, and the capital can be reduced by changing the amount of variable capital with a few procedures. In this case, the procedures include notification of the capital reduction, the implementation of the general meeting of shareholders, and notarization of minutes of the general meeting of shareholders. In addition to these, however, in case of reduce of fixed capital, a commercial registration is also required.

Q6: Definition of directors
A6: Directors are appointed at the General Shareholders' Meeting as the management organization of the Company. There is no concept of “representative director” in Japan, and it is distinctive from the executive organization such as the president who is responsible for the business execution of the company, but it is also possible for directors to serve concurrently as executive officers.

Q7: How many directors are needed?
A7: There is no legal limit on the number of directors at the corporation (Sociedad Anónima), and management by the sole representative director (Administrador Único) who entrusts all power to one director is also permitted. However, if a company is listed, the number of directors will be limited to 2 or more and 21 or less.

Q8: Is it possible to decide the compensation of directors freely?
A8: In the case of a corporation, directors' compensation must be approved at the annual general meeting of shareholders (Asamblea General de Accionistas Ordinaria).

Q9: Are there any restrictions on the age of directors?
A9: Although there is no provision for the age of directors in Mexico, the Mexican Companies Act stipulates that “the person who cannot do business by law” is a requirement that he/she cannot assume the position of director.

Q10. Is it a duty for a director to be stationed?
A10: There is nothing that clearly stipulates the relationship between the company and directors, and it is considered that directors are not obligated to reside in the company. In addition, there are no restrictions on the nationality of directors in principle, but there may be some restrictions such as directors of financial institutions as stipulated in the Financial Institution Law.

Q11: Is it necessary to prepare the Articles of Incorporation?
A11: The Articles of Incorporation is indispensable for establishing a corporation in Mexico. At the time of establishment, the Articles of Incorporation must be submitted to a notary in advance and examined for necessary matters such as the legality of company establishment.

Q12: Is it necessary to hold a general meeting of shareholders regularly?
A12: A corporation is required to hold a general meeting of shareholders (ordinary general meeting of shareholders) within four months from the end of fiscal year once a year. In addition, when considering matters involving amendments to the Articles of Incorporation, it is stipulated that an extraordinary general meeting of shareholders (Asamblea General de Accionistas Extraordinarias) be held.

Q13: Is it necessary to create a company seal?
A13: There are no regulations requiring a company seal in Mexico.

Q14. Can the company's fiscal year be decided freely?
A14: Except in the case of liquidation, the Mexican Companies Act stipulates December 31 as the closing date, and no changes are allowed. The fiscal year is the same as the calendar year, except for the year of establishment and liquidation.

Q15. What is the difference between an ordinary general meeting of shareholders and an extraordinary general meeting of shareholders?
A15: The Extraordinary General Meeting of Shareholders is a General Meeting of Shareholders that resolves the following matters, and the General Meeting of Shareholders that resolves other issues is the Ordinary General Meeting of Shareholders.
- Extension of the duration of the company
- Early dissolution of the company
- Increase or reduction of the share capital (in case that the company is not adopted variable capital system)
- Change of company’s business purpose
- Change of nationality of the company
- Transformation of society
- Merger with another company
- Issuance of privileged shares
- Amortization by the company of its own shares and issuance of beneficial shares
- Bond issue
- Any other modification of the articles of incorporation
- Other matters for which the Law or the articles of incorporation requires a special quorum

Q16. An ordinary general meeting of shareholders should be held once a year. What kind of agenda shall be proposed?
A16: At the ordinary general meeting of shareholders held within four months after the end of the fiscal year, at least the following agendas must be resolved.

  1. Approval of financial statements and relevant statements.
  2. Appointment of directors and corporate auditors (if applicable)
  3. Determination of remuneration for directors and corporate auditors (In case that there is no provision in the articles of incorporation)

Q17. Are there any differences in resolution requirements between the ordinary general meeting of shareholders and the extraordinary general meeting of shareholders?
A17: In the case of an ordinary general meeting of shareholders, at least half of the capital are present, and the resolutions are made by the majority of the voting rights of the attending shareholders. In the case of an extraordinary meeting of shareholders, at least 75% of the capital are present, and the resolutions are made by half of voting rights of the capital.

Q18. Is it necessary to issue stock certificates in Mexico?
A18: Under the Companies Act, stock certificates shall be issued. The items that must be stated on the share certificate are regulated in the Companies Act, such as the name and address of the issuing company, the name, nationality and the address of the shareholder, the rights owned by the shareholder, and so on.

Q19. Is it necessary for a Mexican corporation to have a shareholder register?
A19: A stock company is required to have a shareholder register because a stock company is stipulated to consider the person registered in the shareholder register as the owner of the stock.
The shareholder register is supposed to include the following contents.

  1. Name, nationality and address of shareholders. In addition, the number of shares, series, class, and other peculiarities, etc.
  2. Description of the performance of the executed investment
  3. Description of transfer of shares, etc.

Q20. Are there any requirements for board of directors’ resolution?
A20: The board of directors must be attended by at least half of them, and the board of directors’ resolution is effective when made by a majority of the attendees. If the number of votes is the same, the chairman of the board of directors has the right to make decisions.

Q21. How often should be held the meeting of board of directors?
A21: There is no specific regulation on the frequency of meetings of the Board of Directors under the Companies Act, but since the Board of Directors must report the management policy and financial status at the general meeting of shareholders, it is considered as necessary to hold it at least once a year.

Q22. Are there any regulations regarding directors’ acts of conflict of interest?
A22: Under the Companies Act, directors who have an interest in the company for business purposes must notify other directors of that fact and abstain from deliberations and resolutions. It is stipulated that such director will be responsible for the damages, in case of violation. In addition, since there is no clear standard for acts of conflict of interest, it seems be necessary to carefully consider whether it corresponds to an act of conflict of interest.

Q23. What kind of functions does an auditor have?
A23: Auditors are the bodies that carry out the following duties.
-Secure and maintain guarantees for the execution of duties by directors, and report any misconduct to the shareholders' meeting without delay.
-Request monthly report from directors, including at least financial status reports and financial statements.
-Investigating the work, documents, records and other evidence necessary to monitor the work, and making annual report.
-To report annually to the Ordinary General Meeting of Shareholders regarding the authenticity, sufficiency and rationality of the information submitted by the Board of Directors to the General Meeting of Shareholders. The report must include the following contents.
1) The auditor's opinion as to whether the company's accounting and reporting policies and standards are appropriate and sufficient, taking into account the company's particular circumstances.
2) The auditor’s opinion regarding whether those policies and standards are consistently applied to the information provided by directors.
3) The auditor’s opinion, as a result of above, whether the information submitted by the directors reflects the financial condition and business performance of the company in a realistic and sufficient manner.

Q24. Is it possible to exercise voting rights by proxy at the general meeting of shareholders?
A24: It is permitted to exercise by proxy by entitle the power in accordance with the method specified in the Articles of Incorporation. If there is no provision in the Articles of Incorporation, it is possible to exercise by proxy by entitle the power in writing. The directors and auditors of the company cannot be proxies.

Q25. Is there a limit to the number of partners in a limited liability company (Sociedad de Responsabilidad Limitada)?
A25: The number of partners in a limited liability company (Sociedad de Responsabilidad Limitada) is stipulated to be at least 2 and no more than 50.

Q26. In case of a limited liability company, is a member of the executive body limited to its partners?
A26: The business of the limited liability company is to be carried out by executive officers, and it is possible to appoint partners as well as non-partners. Its appointment and dismissal will be made by a resolution of the general meeting of partners. If no executive officer is appointed, all partners will participate in business management.

Q27. Can anyone be a partner or member of executive body of the limited liability company?
A27: There are no restrictions on nationality, etc. for partners or executives of the limited liability company. However, in practice, individual RFC and digital signature are required in various procedures, so it is necessary to have at least one Mexican or Mexican resident as a member of the executive body.

Q28. Are there any rules regarding the frequency of holding general meeting of partners in the case of a limited liability company?
A28: It is stipulated that the general meeting of partners should be held at least once a year.

Q29. Regarding the general meeting of partners of the limited liability company, are there any resolutions that have been regulated?
A29. According to the Companies Act, the general meeting of partners has following powers.

  1. Discussion, approval, amendment, disapproval of the balance sheet corresponding to the fiscal year and taking measures deemed appropriate for these reasons.
  2. Profit sharing
  3. Appointment and dismissal of executive officer (gerente)
  4. Appointment of supervisory committee (if applicable)
  5. Split and amortization of equity
  6. Request for additional investment and ancillary benefits as needed
  7. Proceedings in response to claim damages against company organization or partners
  8. Amendment of social contract
  9. Consent to transfer of equity and joining new partners
  10. Decision to increase or decrease capital
  11. Decision to dissolve the company
  12. Others stipulated by law or social contract

Q30. What are the types of corporate reorganization in Mexico?
A30: Under the Mexican Companies Act, there are three types of reorganization: mergers, organization change, and spin off. The Mexican Companies Act does not provide for a system equivalent to a share exchange or share transfer as provided for in the Japanese Companies Act.

Q31. Are there any differences in a company split with the Japanese one?
A31: In Japan, there is an absorption-type split in which a business is transferred to an existing company. In Mexico, the Companies Act (Ley General de Sociedades Mercantiles ) does not provide for this type of company split. But only an incorporation-type split, in which a newly established company called “escindida” succeeds the rights and obligations of the splited company called “escindente”, is permitted.

Q32. What is a business entity conversion (Transformación de la Sociedad)?
A32: It means that a company incorporated in the form of a general partnership “Sociedad en Nombre Colectivo”, a limited partnership “Sociedad en Comandita Simple”, a limited liability company “Sociedad de Responsabilidad Limitada”, a limited company “Sociedad Anónima”, a limited partnership by shares “Sociedad en Comandita por Acciones” or others will be converted to other corporate forms. It includes to change from a fixed capital company to a variable capital company as well.

【Q & A on labor laws in Mexico】

Q1. What is the minimum wage in Mexico?
A1: As of January 1, 2023, the minimum wage in Mexico is generally 312.41 pesos/day in north border areas and 207.44 pesos/day in areas other than north border areas. In addition, the minimum wage is set separately for each 61 occupations, and they were also increased 20% from the amount in 2022. Please note that north border areas are each area of the following cities.
Baja California:Ensenada, Playas de Rosarito, Mexicali, Tecate, Tijuana, San Quintín, San Felipe
Sonora:San Luis Rio Colorado, Puerto Peñasco, General Plutarco Elías Calles, Caborca, Altar, Sáric, Nogales, Santa Cruz, Cananea, Naco, Agua Prieta
Chihuahua:Janos, Ascensión, Juárez, Praxedis G. Guerrero, Guadalupe, Coyame del Sotol, Ojinaga, Manuel Benavides
Coahuila:Ocampo, Acuña, Zaragoza, Jiménez, Piedras Negras, Nava, Guerrero, Hidalgo
Nuevo León:Anáhuac
Tamaulipas:Nuevo Laredo, Guerrero, Mier, Miguel Alemán, Camargo, Gustavo Díez Ordaz, Reynosa, Rio Bravo, Valle Hermoso, Matamoros

Q2. What are the laws related to employment and labor in Mexico?
A2: Labor laws and regulations in Mexico are governed mainly by Article 123 of the Constitution, the Federal Labor Law and the Federal Social Security Law. Main employment labor laws and regulations are as follows.
・ Constitution (Constitución Política de los Estados Unidos Mexicanos)
・ Federal Labor Law (Ley Federal del Trabajo)
・ Federal Social Security Law (Ley del Seguro Social)
・ Law of the Institute of the National Housing Fund for Workers Law (Ley del Instituto del Fondo Nacional de la Vivienda para los Trabajadores)
・ Law of Institute of the National Fund for Workers' life (Ley del Instituto del Fondo Nacional para el Consumo de los Trabajadores)
・ Social Welfare Law (Ley de Asistencia Social)
・ Planning Law (Ley de Planeación)
・ Law of the Institute of Security and Social Services of the Government employees (Ley del Instituto de Seguridad y Servicios Sociales de los Trabajadores al Servicio del Estado)
・ Law on the promotion of the work of micro enterprises and handicraft workers (Ley General para el Fomento de la Microindustria y la Actividad Artesanal)
・ Law on Prevention and Eradication of Discrimination (Ley Federal para Prevenir y Eliminar la Discriminación)
・ Law of the National Commission for Indigenous Development (Ley de la Comisión Nacional para el Desarrollo de los Pueblos Indígenas)
・ Regulations on Industrial safety and health, and labor environment (Reglamento Federal de Seguridad, Higiene y Medio Ambiente de Trabajo)
・ Law on Measurement and Standardization (Ley Federal sobre Metrología y Normalización)
・ Law on Food Assistance for Workers (Ley de Ayuda Alimentaria para Los Trabajadores)
・ Law on the Rights of the Elderly (Ley de los Derechos las Personas Adultas Mayores)
・ Law on Retirement Funding System (Ley de los Sistemas de Ahorro para el Retiro)
・ Housing Law (Ley de Vivienda)
・ Law on Providing Services for Childcare (Ley General de Presentación de Servicios para la Atención, Cuidad y Desarrollo Integral Infantil)
・ Law on Tobacco Control (Ley General para el Control del Tabaco)
• Law on Government employees who work as stipulated in Article 123B) of Constitution (Ley Federal de los Trabajadores al Servicio del Estado, Reglamentaria del Apartado B) del Artículo 123 Constitucional)

Q3. Is it mandatory to conclude a written employment contract in Mexico?
A3: If there is no collective agreement between the employer and the labor union, it is necessary to conclude a written contract between the employer and each worker. The labor contract itself will be concluded if labor is provided for the purpose of paying salary.

Q4. Are there any restrictions on the probational period in Mexico?
A4: If the employment contract is for indefinite period or 180 days or more, the probational period can be set. Although it is not necessary to set a period in advance, this probational period is up to 30 days (180 days for managerial positions). In addition, this probational period should be included in the employment period required for social welfare, etc. applicable to the employee.

Q5. Is Mexico's regulations on working hours the same as Japanese?
A5: According to the Federal Labor Law, the maximum working hours per day is 8 hours in case of day term (6:00 to 20:00), 7 hours in case of night term (20:00 to 20:00), and 7.5 hours in case of astride day term to night term (however, working hours after 20:00 are limited to less than 3.5 hours.) In addition, if the purpose is to close Saturday afternoon, it is allowed to distribute working hours of a week, and since it is necessary to repeat holidays every 6 working days, the maximum working hours of the week is 48 hours, 42 hours and 45 hours respectively.

Q6. Are there any restrictions on break times in Mexico?
A6: It is necessary to provide 30 minutes break per a day. In addition, if employees are in an environment where they cannot leave their workplace during break times, such as at a factory, it must be included into the working hours.

Q7. Is there an upper limit for overtime work in Mexico?
A7: Overtime work is stipulated a maximum of 3 hours per day and 3 days per week.

Q8. What is the extra pay rate for overtime allowances in Mexico?
A8: In case of exceeding the working hours per day, the extra pay rate will be 100% of the normal wage. In addition, if the overtime hours of the week exceed 9 hours, it will be 200% of the normal wage and extra pay shall be twice or three times of normal wage, respectively.
As a general rule, holidays are Sundays. If employees work on Sunday, the extra pay rate will be 25%. Also, if employees work on a statutory holiday, the extra pay rate will be 100%, and the employee have to be paid twice the normal wage.

Q9. How many days are paid leaves in Mexico?
A9: Employees who have worked for more than one year are legally guaranteed the right to take paid leaves. The number of paid leaves that can be taken depends on the seniority, 12 days for 1 year of service and 2 days for each year of service shall be added from 2 years services to 5 years services. On and after 6 years of service, 2 days are added every 5 years services. In addition, when the employee takes paid leave, 25% amount of the wage must be paid as a benefit.

Q10. What kinds of vacations are there in Mexico other than paid leaves?
A10: In Mexico, there are maternity leaves other than paid leave. Women who will give birth have the right to take six weeks off before and after childbirth, and the salary is 100% paid during this period.

Q11. What are the provisions for termination of employment contracts in Mexico?
A11: It is stipulated that the employment contract is terminated in the following cases.
(1) When there is mutual consent between the employer and the employee
(2) When an employee was died
(3) When the job ends (completed) or the employee's employment period expires
(4) When a mental or physical disability of the employee is recognized
(5) When it becomes difficult to continue the business because of the reasons that should not be attributed to the employer, such as bankruptcy, force majeure or others.
However, regarding (1), it is generally understood that the employer agrees with the worker's intention to resign.

Q12. What are the regulations regarding the termination of employment in Mexico?
A12: In Mexico, employers and employees can terminate their employment contracts without liability if there are legitimate reasons, and the followings are stipulated as reasons for employers to be able to be terminated without liability:
(1) In case of using falsehood for employment
(2) In case that violent acts including misconduct, threats, insults, etc. are carried out in working
(3) In case of committing violent acts, including fraud, threats, etc., or dishonest acts that disrupts discipline, against colleagues
(4) In case of committing violent acts including threats, insults, etc. without justifiable reason against employers, customers, business partners, or their families
(5) In case of intentionally damaging an employer's property such as a building or machine
(6) In case that the property of an employer such as a building or machine is damaged due to negligence of an employee
(7) In case of committing acts that threatens workplace safety due to carelessness
(8) In case of committing immoral acts such as sexual harassment or bullying in the workplace
(9) In case of leakage of information about trade secrets or confidentiality
(10) In case of absence with no valid reason for more than 3 days out of 30 days
(11) In case of violation against administrative orders without a valid reason
(12) In case of violation against safety rules in the workplace
(13) In case of drunkenness or using illegal drug at workplace
(14) In case of being imprisoned
(15) In case that documents required for working are missing caused by the employee, and the situation does not improve even after two months have passed since the employer knows it
(16) In case of committing other serious acts similar to each above
The employer must notify the employee of the dismissal directly on the same day of dismissal with notice written the reason and the date on which the event occurred, or notify the competent court within five days from the dismissal date. The company is responsible for verifying the reason for dismissal, and if it fails to do so, the employee can request reinstatement or payment of dismissal compensation. Also, if it is judged an unfairly dismissed, the employer will have to pay the wages that the employee would have earned during the dispute.

Q13. Is there a social security system in Mexico?
A13: In Mexico, a social security system is provided to ensure access to health, medical assistance, personal needs and access to social services necessary for the welfare of individuals and groups. The Mexican social security system is a system in which employers are forced to pay the amount calculated from the salary of employees. The burden rate varies depending on the type of occupation and the wage level of employees, and it is estimated to be approximately 15-30%. The operation is carried out by the Instituto Mexicano de Seguro Social (IMSS). Employees can receive benefits such as occupational accident insurance, medical insurance, disability insurance, life insurance, retirement pension, unemployment insurance and other care services.

Q14. Is there a basis law for the Mexican pension system?
A14: Mexico has established a retirement reserve system (Sistemas de Ahorro para el Retro / SAR) under the Federal Social Security Law as a pension scheme for private employees. More detailed provisions will be based on the Law on Retirement Funding System, but employers are obliged to pay 5.15% of the standard salary based on each employee's salary as contributions.

Q15. Are there any restrictions on the retirement age in Mexico?
A15: The retirement age is not stipulated specifically in Mexico. However, since the qualification for receiving a retirement pension is 60 years for those who were registered with IMSS before 1997 and 65 for those after 1997, it is said that 65 years generally.

Q16. Are there any laws and regulations that apply only to female employees in Mexico?
A16: Chapter 5 of the Federal Labor Law has provisions for female employees, in which the rights of women who are pregnant or breastfeeding and women who have health problems specific to women, such as equal rights and obligations with male employees and prohibition of work after 22:00, are established. In addition, the 2019 amendment added equal treatment and securing of opportunities.

Q17. Should bonuses be paid to employees even if the company is not performing well?
A17: Labor law requires the payment of a bonus called Aguinaldo, and it is regulated to be paid at least 15 days' salary by December 20 each year.

Q18. What is PTU?
A18: This is a system called “participación de los trabajadores en las utilidades de las empresas (PTU)” which distributes the profits of the company to employees by a certain percentage. This is that workers can enjoy corporate profits at a rate determined by the National Workers Distribution Commission (Comisión Nacional para la Participación de los Trabajadores en las Utilidades de las Empresas). 10%, as of May 2021, of the single tax year's income plus certain adjustments, must be distributed to employees who have been enrolled during the relevant fiscal year. However, tha maximum limitation is set as a higher amount which 3-month salary or which average of PTU that is received in past 3 years.

Q19. Can officers be paid PTU distribution?
A19: Directors, executive officers, and managers who are in charge of overall management and administration of the company are not eligible for distribution.

Q20. I heard that mental health measures were required. What specific measures are required?
A20: Developing and implementing measures to prevent psychological risks and workplace violence, and workers who have suffered severe trauma when working according to the official Mexican Standard NOM-035-STPS-2018, which came into effect on October 23, 2019. It is necessary to identify and provide medical care to the workers, provide information to workers such as setting up a reporting system for psychological and physical violence in the workplace and preventive measures. It is introduced in phases, with workplaces with 16 and more workers having certain regulations that apply from October 23, 2020.

Q21. What specific mental health measures imposed on companies will be applied after October 23, 2020?
A21: After October 23, 2020, You need to do things like provide, in workplaces with 16 or more workers, identification and analysis of psychological risks and workplace violence to all employees at least once every two years, conducting medical examinations or psychological tests for psychologically or physically injured workers in accordance with the result of such analysis and keep records of them, introduce more detailed measures to reduce risks in the workplace, inform workers about these results and measures, etc. In workplaces with more than 50 workers, identification and analysis of psychological risks and workplace violence can be performed by sample survey.

Q22. Is there a parental leave system for men?
A22: The Labor Law stipulates that employers are obliged to give male employees five days paid leaves when a child is born or he adopts a child.

Q23. When are legal holidays in Mexico?
A23: The holidays specified in the Labor Law are as follows.
January 1 (New Year's Day)
First Monday of February (Constitution Day)
Third Monday of March (Benito Juarez's anniversary)
May 1 (May day)
September 16 (Independence Day)
Third Monday of November (Mexican Revolution Day)
December 1 (Holiday once every 6 years, the day of the inauguration of the president)
December 25 (Christmas)
Election voting date as determined by federal or local election law

Q24. An employee is absent due to illness. Should the salary be paid in this case?
A24: In the case of absence due to illness, it is possible to be unpaid because it corresponds to the condition of suspension for labor provision by workers and salary payment obligations by employers as defined by the Labor Law. However, in Mexico, where there are fewer holidays and public holidays than in other countries, it seems that not a few companies provide paid sick leaves as a part of their benefits.

Q25. We have just established a company and plan to hire one employee. Is there an obligation to join social insurance?
A25: Workers who are in an employment relationship are obliged to take out social insurance, and the employer must notify the Social Insurance Institution within 5 days of the start of work of the employee.

Q26. Are there any other costs that employers will bear related to the employment in addition to social security fee?
A26: Mexico has a local tax called the payroll tax (Impuesto sobre Nómina (ISN)). It is a tax levied on the payment of salaries based on the employment relationship, and the employer is obliged to pay it based on total amount of salaries and benefits paid to employees multiplied by certain ratios. The rules vary from state to state because of local taxes, but the tax rate is about 0.5% to 3%.

Q27. What shall be done in case that an occupational accident occurs?
A27: The employer must notify the Ministry of Labor and Welfare (Secretaría del Trabajo y Previsión Social) in writing or electronically within 72 hours of the occurrence of an occupational accident, and it must be informed immediately if the employee was dead by the occupational accident. However, it is not necessary when the employee submitted it to the social security agency by himself/herself. In addition, in the event of a work-related accident that results in the death or permanent disability of an employee, the Occupational Safety and Health Committee established at each work place must investigate the cause within 30 days of the occurrence.

Q28. Is it allowed to set a fine for employees who are often late?
A28: Labor law prohibits imposing fines on employees for any reason.

Q29. Should Aguinaldo and paid leave rewards (Prima Vacacional) be paid for voluntary retirees?
A29: Workers have the right to receive Aguinaldo and take paid leave, and they will have that right to be paid said payments depending on the number of working days. If a worker retires before the Aguinaldo payment date, the amount of Aguinaldo to be paid will be based on the number of working days. For example, if a worker retires before the date when he/she has the right to take paid leave, the reward shall be paid corresponding to the number of paid vacation days which is based on the working days.

Q30. Can minors (under 18 years old) be employed?
A30: Children under 15 are not allowed to be employed. If a child between 15 and 16 years old want to be employed, such child needs the permission from his/her parents or guardians. In addition, in order to get children aged 15 to under 18 to work, it is necessary to meet the conditions specified in Labor law, such as obtaining a medical certificate which says that there is no problem to work, having regular medical checks and prohibiting from working after 22:00.

Q31. Is there a prescription for workers' rights?
A31: The labor law stipulates a deadline for the exercise of workers' rights. The exercise of the right due to the employee leaving the job, such as dismissal, is two months from the day following the day of leaving the job. Claims for compensation for occupational accident are calculated for two years from the date when the degree of disability due to occupational accident is determined. When an employee dies due to an occupational accident, the beneficiary's rights shall be exercised within two years from the date of the employee's death. Request for enforcement of the arbitration award shall be requested within two years from the day following the date of notification of the arbitration award. The other rights without prescription regulation shall be exercised within one year from the day following the day when the right can be enjoyed.

Q32. Are there any restrictions on business suspension due to disasters or the spread of infectious diseases?
A32: In accordance with the labor law, if there is a force majeure or contingency that is not attributable to the employer, or if the authorities declare a hygiene contingency, the employment relationship may be suspended temporary. In the former case, it is necessary to apply to the Board of Conciliation and Arbitration (Junta de Conciliación y Arbitraje) (Labor Court after the Labor Court is established) for approval, and this committee will determine the amount of compensation. In the latter case, the employer is not required the approval but required to pay the compensation of the amount of minimum wage to the worker for a maximum of one month.

Q33. Are there any regulations regarding remote working?
A33: On January 11, 2021, amendments to the Labor Law, such as the addition of provisions on remote working, were published in the Official Gazette and came into effect on the following day. With this amendment, when remote working, the employer be obliged to lend the necessary tools (PC, etc.) to the employee, to bear the cost (electricity fee and communication cost, etc.) for remote working, to guarantee the right to disconnect during off-hour, and so on. In addition, NOM (Norma Oficial Mexicana), which sets standards for safety and health in remote working, will be established within 18 months of the enforcement.

Q34. Our office had been moved. The change the address will be noticed to IMSS (Social Security Institution). Is there a deadline for the procedure?
A34: According to the regulation regarding the Social Security Law, it should be notified within 5 business days from the date the address was changed.

Q35. What is a strike in Mexico?
A35: A strike is a temporary suspension of work carried out by a labor union, and must be limited to a mere suspension of work.

Q36. What kinds of actions cannot be taken during a strike?
A36: Violent acts are not allowed. Article 445 subsection I of the Federal Labor Law (Ley Federal del Trabajo) also stipulates that if the majority of strikers commit violent acts against persons or property, such strike will be illegal.

Q37. What is the outline of the strike procedure?
A37: The strike procedure is initiated by the filing of a petition. This petition must meet the following requirements; (1) it must express the intention to strike and indicate the purpose of the strike, the day and hour of work stoppage, or the period prior to the strike; (2) a copy of the petition must be filed with a court of competent jurisdiction, etc.; (3) the notice of the suspension of work must be given at least six days prior to the indicated date of work stoppage, or ten days prior in the case of official duties; and (4) to attach documents in accordance with the purpose of the strike.
And the court, etc. is required to deliver a copy of the notice to the employer within 48 hours of receipt of the above (2). In addition, within 24 hours after the submission of the strike notice, the court, etc. must notify the competent conciliation center to intervene in the pre-strike period to settle the parties, and the conciliation center has the authority to summon the parties and conduct negotiations and conciliation talks in the pre-strike period.
The employer must file a written response with the court within 48 hours of the notice. If a settlement is reached here, no strike will occur, but if no settlement is reached and the set pre-strike period expires, a strike will begin.

Q38. We have accepted contractual workers, but we consider hire them through the procedure of employer substitution. What do we need to be careful about?
A38: According to the amendment to the Federal Labor Law on April 23, 2021, in order for the employer substitution to be effective, the assets of the company or establishment must be transferred to the substituted employer. However, there is a transitional period by September 1, 2021, so the transfer of assets is not required during said transitional period.

Q39. Worker Dispatching has been prohibited in principle by the April 2021 amendment to the Federal Labor Law. What is the penalty for violating this prohibition?
A39: Whoever dispatches their employees to others prohibited by this amended Federal Labor Law, any individuals or legal entities that provide a dispatching service without having the corresponding registration with the Ministry of Labor and Social Security, and any individuals or legal entities that benefit from an illegal dispatching service shall be fined from 2,000 to 50,000 times UMA.

Q40. We would like to register with the Ministry of Labor and Social Security in order to provide specialized services. What are the requirements for the registration?
A40: The registration system, REPSE (Registro de Prestadoras de Servicios Especializados u Obras Especializadas), requires the following:
(i) Having a valid federal taxpayer identification number (RFC) and electronic signature (e.firma),
(ii) No delinquency in payment of taxes to the SAT and social insurance premium to IMSS and INFONAVIT,
(iii) The specialized services offered must be one of your business objectives and you must be able to demonstrate your specialization with information on permits, licenses, certifications, equipment, technology, assets, capital, machinery, risk level, average salary and experience.
(iv) To be able to submit followings through the dedicated website; the corporate representative's ID, certificated document that the right of representation has been granted to the representative, employee's salary certificate, articles of incorporation (including current business purpose), RFC registration certificate, IMSS employer registration certificate, and proof of address.

Q41. What is a trusted worker?
A41: A trusted worker “trabajador de confianza” means generally a person who directs, manages, inspects, supervises and controls, and performs duties related to employer's business within the company or business establishment. It is usually considered to include managers and those who assist top management.

Q42. Can’t trusted workers join a labor union?
A42: No. Trusted workers can’t be members of a labor union. However, the working conditions contained in the collective agreement are applicable to the trusted workers, unless otherwise specified.

Q43. When dismissing a trusted worker (trabajador de confianza), is there any difference in the criteria for dismissal from those for ordinary workers?
A43: If there is a reasonable cause for the loss of trust, the employer may terminate the employment relationship even if there is no justifiable reason for dismissal as required in the case of ordinary workers.
In addition, even if the dismissal of the trusted worker was not justified, the employer may be relieved of the obligation to reinstate the worker by paying compensation.

【Q & A on Mexican visas】

Q1. What kind of visa do I need to get for working in Mexico?
A1: To receive payment for work in Mexico, the following visa will be needed for Japanese depending on the length of the stay in Mexico.
・ Visa for visitors who have permission to conduct activities to earn rewards for stays of 180 days or less
・ Temporary Resident Visa for activities that earn rewards for stays longer than 181 days
For activities that do not get paid in Mexico, such as business trips or conference participation, a visa is not required if the length of stay in Mexico is within 180 days. If it will exceed 180 days, a temporary resident visa for non-rewarded activities in Mexico will be required.

Q2. What are the requirements for obtaining a visa to earn rewards in Mexico?
A2: The procedure number called "NUT" is required. It can be proceeded by the employer in Mexico.
At first, an employer registration is required for a natural or moral person who hires the foreigner in Mexico. Employer registration is that a company or natural person that employs foreigners applies to the Mexican Immigration Authority (INM: Instituto Nacional de Migración) and is registered, so that the employer is recognized its qualifications as a foreigners’ employer and the authority of the company representative. This employer registration must be done in state by state, if there are some offices that are expected to employ foreigners in several states, the registration shall be done in such each state.
Next, the employer, after the registration, must apply for and obtain an Authorization for Visa with work permit (Autorización de Visa por Oferta de Empleo) from INM. At the time of application, the visa applicants name and details of the job (stay period, title, compensation, etc.) will also be notified.
Please note that the employer registration must be renewed every year, and if there is a change, it must be notified within 30 days.

Q3. How do I apply for a visa to get rewards?
A3: After obtaining the NUT, the visa applicant shall make an appointment for a visa interview at the Mexican embassy/ consulate outside of Mexico, prepare the necessary documents, and go there for an interview at the date and time of the appointment. Since the content of the application will be checked at the interview, it is recommended to review the content of the application in Mexico in advance. The validity period of the visa is 180 days, and in the case of a temporary resident visa for activities that earn rewards with more than 180 days stay, the temporary resident card (TRT: Tarjeta de Residente Temporal) must be acquired within 30 days after entering Mexico.

Q4. What are the required documents for applying for a visa to get rewards?
A4: The following documents are required to apply for a visa to get rewards.
1. Original passport and 1 copy (A4 copy of photo page)
2. Copy of entry permit (with NUT number)
3. Application form
4. 1 photo
(3cm x 4cm, white background, without glasses, accessories, etc., show a forehead and ears)
5. When applying to an embassy other than the Mexican embassy in Japan, proof of residence permit such as a residence card in that country

Q5. Is it possible for my family to accompany me when I get a visa to get a reward?
A5: If your family members are Japanese nationalities, they can stay without a visa if they stay within 180 days. If they are staying longer than 180 days, they must obtain a residence card in the framework of a family member (Unidad familiar) by completing procedures at the branch office of the Mexican Immigration Authority that has jurisdiction while their 180-day stay.

Q6. Does a temporary resident card have expiration date?
A6:The first TRT is valid for one year, but when applying for a TRT with work permission, the card valid for two to four years can be applied at the first application depending on the period stated in the employment letter or relevant documents. And renewal procedures can be made one month before the expiration date. After the renewal, term of the resident can be selected from 1 year, 2 years, or 3 years, but the temporary resident status can be up to 4 years. You must apply for and obtain a permanent resident card (TRP: Tarjeta de Residente Permanente), when you stay more than 4 years.

Q7. Is there a minimum amount of remuneration that will be taken into account when Japanese obtain a visa?
A7: There are no restrictions on the amount of remuneration that applies only to foreigners in Mexico. However, since the conditions for employment including remuneration will be declared when applying for an entry permit number that is necessary for application of visa to get remuneration, it will be important that the contents of the visa application must be the same as the contents of entry permit application, as stated in Q3. In addition, since it is at the discretion of the examination authority that an issuance of an entry permit number and a visa is issued, it cannot be denied that the amount of remuneration that has been declared is considered. For temporary resident visas for activities that do not require remuneration, you may be required to prove your income or deposit in a bank of a certain amount or more, that is because you need to be able to bear the cost of staying in Mexico.

Q8. What are the required documents for applying for a temporary resident visa for activities that do not involve rewards in Mexico?
A8: The following are the documents required to apply for a temporary resident visa for activities that do not involve rewards in Mexico.

  1. Passport (one copy of the original and photo pages)
  2. application form
  3. 1 photo (4 cm x 3 cm, white background, visible forehead and ears, no glasses)
  4. Letter of liability from Mexican side (corporate)

(Spanish; use paper with corporate letterhead)

  1. A copy of the identity card of the signer of the letter of liability (with photo and signature)
  2. Recommendation letter from the Japanese side (company)

(English or Spanish; use paper with company letterhead)

  1. Bank balance certificate of Mexican side (company)

(The average balance of the account must be 1,232,200 pesos or more over the last 12 months)

Q9. What kind of questions will be questioned during a visa interview?
A9: The questions asked by the officer may vary, but some examples of interviews with temporary resident visas for rewarding activities include the length of your stay, your activity in Mexico, your academic background (what kind of studies you learned or how long you have studied), your work history (duties and length of services for current employer), whether you can speak Spanish, and whether you have traveled to Mexico.

Q10. It is said that it is necessary to notify within 30 days if there is a change in the contents of the employer registration (refer to Q2). What kind of change should be specifically notified?
A10. If case of change the legal representative or attorney (representante legal o apoderado) or the address of the employer information registered with the Immigration office, such changes must be notified.

Q11. I was a temporary resident of Mexico, but my temporary resident card expired while I was temporarily returning to Japan. In this case, do I have to apply for a temporary resident visa again?
A11: According to the Regulation on the Immigration Law (Reglamento de la Ley de Migración), you can enter Mexico with an expired temporary resident card within 55 calendar days from the expiration date. In this case, you need to apply for a temporary resident card renewal within 5 business days after entering Mexico. If 55 days have passed since the expiration date, you will need to complete the procedures according to the purpose and duration of your stay in Mexico.

Q12. I lost my temporary resident card while leaving Mexico. Do I need to get a new visa?
A12: If you lose your Mexican temporary resident card outside of Mexico, you can apply for a reissue of your visa to the Mexican Embassy in where you are. A visa will be issued with the permission of the competent authority in Mexico, in which case the visa will be valid for 30 days. Within 30 days of entering Mexico, you must carry out the procedure for switching to a temporary resident card at the Mexican Immigration Institution (INM: Instituto Nacional de Migración).

Q13. I lost my temporary resident card in Mexico. Is it possible to reissue it?
A13: If you lose your temporary resident card in Mexico, you need to notify the Mexican Immigration Institution (INM: Instituto Nacional de Migración) your loss. Then you can apply for a reissue it with a record of the loss. The reissued temporary resident card will be valid for the same period as the lost card.

Q14. When I apply a Mexican visa, do I have to go to the Mexican Embassy in the country origin?
A14: In principle, you can apply for a visa to any Mexican embassy or consulate that is engaged in visa consular services. In that case, in addition to the usual necessary documents, you will be required to show proof of stay permit in the country of application, and you may be charged a fee. Necessary documents will differ depending on which embassy or consulate you apply, so it is recommended to confirm with such embassy or consulate in advance.

Q15. Is information on procedures for obtaining Mexican visa or switching from a visa to a resident card provided in other languages such as English?
A15: In principle, information provided by relevant ministries (Ministry of Foreign Affairs or Institution of Immigration) is in Spanish, and translations are rarely provided. Visa’s Information may be provided in English or other languages on the diplomatic office's website, but procedures in Mexico might be provided only in Spanish.
The guidelines for residence procedures are available in English and French, but they are very simple. However, in the actual procedure, it may be insufficient or be different, so it is recommended to check with the relevant authorities in advance.


【Q & A on Mexican land legislation】

Q1. Can foreign companies get land in Mexico?
A1: Article 27, Paragraph 1 of the Constitution stipulates that those who have the right to acquire Mexican land shall be Mexican nationality by birth or naturalization or Mexican corporations. A Mexican corporation means a corporation established in Mexico, as described in Q6 of Q & A on how to advance to Mexican Market. In addition, according to the same paragraph, even foreigners (natural persons and corporations) obtain land by accepting the calvo clause and obtaining permission from the Ministry of Foreign Affairs. However, foreign corporations cannot obtain land within 100 km from the border and within 50 km from the coastline (restricted area). In addition, in case of obtaining a land for the purpose of agriculture, animal husbandry, forestry, etc., there is a limitation for area acquired. Even if a Mexican corporation, if it doesn’t have a foreigner exclusion clause (the clause that does not accept foreigners or corporations with foreign capital directly or indirectly as partners or shareholders), in other words, corporations that have foreigners or corporations with foreign capital as shareholders, can only acquire land within the restricted area for purposes other than residence, and notification must be made to the Ministry of Foreign Affairs within 60 business days after purchase.

Q2. Are there any minimum limits for land acquisition price in Mexico?
A2: There is no restriction on minimum acquisition price for land acquisition in Mexico.

Q3. Which organization is applying for land acquisition in Mexico?
A3: First, when a foreign corporation intends to acquire land, it is necessary to submit a letter which written the agreement stipulated in Article 27, Paragraph 1 of the Constitution to the Ministry of Foreign Affairs in advance and obtain permission. After that, you need to ask the notary to make a written contract regarding the purchase of land, and after signing the notarial deed of sales contract, the certified copy is registered with the Legal Affairs Bureau (RegistroPúblicode la Propiedad y del Comercio del Estado). In the case that the acquisition amount is less than 365 times UMA, the registration is not mandatory.

Q4. What effect does the registration of land in Mexico have?
A4: Land owned by individuals or corporations in Mexico is treated as private land and must be registered. This registration is a perfection requirement for land ownership.

Q5. Can a third party view the land registration in Mexico?
A5: The real estate register can be viewed by third parties at the branch office of the Legal Affairs Bureau in charge of the real estate. When viewing, it is necessary to apply with the address or block of the real estate, the land register code or the previous registration certificate (copy or original). The register is in Spanish.

Q6. Are land and building subject to separate rights in Mexico?
A6: Traditionally, land owners in Mexico are considered to have the right to enjoy the land and anything that arises from or is on the ground. However, partial ownership of condominiums, etc. is also permitted and registration is possible, but care must be taken as it depends on the laws of each state.

Q7. Are there restrictions on the lease of land in Mexico?
A7: For land within 100km from the border and 50km from the coastline that cannot be acquired by foreigners, foreigners can use them in trust. In this case, it can be renewed for up to 50 years.

Q8. Is there a law in Mexico that protects lessees like the Japanese Land Lease and Rental Law?
A8: At the federal level, there are no laws individually protecting tenants, but there is a civil law (Codigo Civil) that regulates lease transactions.

Q9. Is there a real estate appraiser in Mexico?
A9: Real estate appraiser exists as a national qualification.

Q10. What is the stamp duty rate for acquiring real estate in Mexico?
A10: Stamp duty is not introduced in Mexico. Real estate acquisition procedure costs include notary fees, real estate registration and cadastral registration fees, real estate acquisition taxes, and appraisal costs.

Q11. How much is the taxable amount if the profit is made by transferring real estate in Mexico?
A11: Capital gains tax is imposed in Mexico. A tax is levied on 30% for a Mexican corporation and 25% of the sale or 35% of a sale profit for a foreign corporation.

Q12. Are there any restrictions on land use?
A12: It is possible that there are restrictions on usage based on urban development plans and on environment-related laws and regulations. As a first step, it is recommended that checking in advance whether the activity to be carried out on such land is consistent with the land use (Uso de Suelo).

Q13. What are the different categories of land in Mexico?
A13: There are public property, private property, and social property “propiedad social”. Social property includes “ejido” and communal property “propiedad communal” and so on.

Q14. Is it possible to transfer or dispose private property in Mexico?
A14: Private property can be transferred, set up collateral, or otherwise disposed of. These changes of rights will be registered in the real estate registry.

Q15. What is an “ejido”?
A15: It means communally owned land. There are three types of ejido: a) residential use land, b) common use land, and c) parcel land. a) residential use land may not be transferred, encumbered, or otherwise disposed of, except when it is required for public services under a certain condition. And, b) common use land and c) parcel land may be transferred to the participants of the community, but it requires approval from the community assembly or other procedures.

【Q & A on Foreign capital regulations in Mexico】

Q1. Is it possible for foreign capital to conduct manufacturing in Mexico?
A1: In principle, the manufacturing industry is not a regulated industry, so it is possible to do it even with 100% foreign capital. However, the manufacturing and sales of explosives, fireworks, firearms, etc. are required to have a foreign capital ratio of 49% or less.

Q2. Is it possible for foreign capital companies to do service business in Mexico?
A2: In principle, it is possible for foreign capital companies to do service business in Mexico, but the following types of business are regulated.
Business is reserved in the state (private entry is prohibited)
・ Telegram service
・ Wireless telegraph service
・ Postal service
・ Control, management and supervision of ports, airports and heliports
・ Others specified in laws and regulations
Restricted to Mexican companies that have a foreign exclusion clause in the Articles of Incorporation (cf. [Mexican land legislation] Q1) (i.e. foreign investment is not allowed)
・ Passenger / Tourism / Domestic land transportation (excluding courier service)
・ Provide professional and technical services clearly indicated in applicable law
Businesses restricted foreign investment ratio
・ Investment ratio of 10% or less; Cooperative association
・ Investment ratio of 49% or less; T-series shares of companies that own forest, livestock, and agricultural land, Integral port administration (API), Port pilot services to vessels to perform inland navigation operations under the terms of applicable laws, Domestic shipping excluding tourist cruisers business (who are engaged in commercial ship operations on the coastal or inland routes, or who are engaged in construction, maintenance or operation of ports), Fuel / lubricant supply for ships, airplanes and railway equipment, Radio and terrestrial television broadcasting (however, If the investment ratio is regulated for the same industry under the domestic laws of investors, the rate will not exceed 49% as a mutual principle), domestic air transportation, air taxi transportation, and special air transportation
Regulatory Businesses that require approval from the Foreign Investment Committee when the foreign participation rate exceeds 49%
・ Port services such as towing, mooring and chartering
・ Shipping companies engaged in ocean shipping operations
・ Public airfield authorization or concession company
・ Kindergarten, elementary school, junior high school, high school, private school services of higher learning
・ Legal services
・ Provision of public railway services and construction, operation and management of railways

Q3 Is it possible for foreign capital to do a restaurant business in Mexico?
A3: It is possible that foreign capital is engaged in the restaurant business.

Q4. Is it possible for foreign capital to conduct retail business in Mexico?
A4: It is possible that foreign capital is engaged in retail business in Mexico.

Q5. Is it possible for foreign capitals to conduct hairdressing business in Mexico?
A5: It is possible for foreign capital to is engaged in hairdressing business in Mexico.

Q6. Is it possible for foreign capital to conduct massage business in Mexico?
A6: It is possible for foreign capital to is engaged in massage business.

Q7. Is it possible for foreign capital to conduct business such as gyms in Mexico?
A7: It is possible for foreign capital to is engaged in gym business in Mexico.

Q8. Is it possible for foreign capital to run a cram school in Mexico?
A8: It is possible for foreign capital to run a cram school.

Q9. Is it possible for foreign capital to conduct financial business in Mexico?
A9: Financial business by foreign capital is also permitted, but when establishing a commercial bank as a subsidiary, under the Financial Institution Law, it is limited to banks residing in countries where free trade agreements or similar arrangements are made.

Q10. Are there any franchise regulations in Mexico?
A10: There are no restrictions on foreign investment for franchise, but the Industrial Property Law stipulates matters related to franchise agreements, so it is necessary to comply with those rules, and depending on the type of business, it is necessary to comply with relevant laws and regulations.

Q11. Are there any restrictions on employment of foreigners in Mexico?
A11: It is stipulated that 90% of workers are Mexicans.

Q12. In case of a foreign-owned Mexican company, what kind of procedure is required when there is a change in the registration items for foreign investment registration?
A12: Changes in name, economic activity, tax address, capital and its composition are quarterly notices, and you must submit a report within 10 business days of the start of the next quarter when the changes are made. The change in capital and its composition is applicable to companies with capital of more than 20 million pesos.
If legal representative is changed, a new legal representative is needed to register on the Foreign Investment registration ((Registro Nacional de Inversiones Extranjeras) website.

Q13. I am a Mexican branch of a foreign company. What kind of procedure is required when there is a change in the registration items for foreign investment registration?
A13: Changes in name, economic activity, and tax address are quarterly notices, and you must submit a report within 10 business days of the start of the next quarter when the changes are made.
If you change your legal representative, you will need to register a new legal representative on the Registro Nacional de Inversiones Extranjeras website.

【Q & A on dissolution, liquidation and bankruptcy in Mexico】

Q1. What types of dissolution and liquidation are in Mexico?
A1: There are six reasons for dissolution of a company as stipulated in the Companies Act.
(1) Expiration of the duration of the company specified in the Articles of Incorporation
(2) Incapacitate operation of or complete the company's main business objectives
(3) Shareholder agreement
(4) Insufficient number of shareholders
(5) Loss of 2/3 of company capital
(6) Judicial or administrative judgment based on relevant laws and regulations

Q2. What is the flow of dissolution and liquidation procedures in Mexico?
A2: Dissolution and liquidation procedures under the Companies Act are as follows. Procedures by electronic application are also permitted.
(1) Adoption of dissolution resolution, and its registration and notification
(2) Liquidation affairs
(3) Public notice of liquidation balance sheet
(4) Approval, registration and notification of liquidation affairs and liquidation balance sheet
(5) Distribution of residual assets
(6) Company extinction
(7) Document storage by liquidator

Q3. What happens to power of directors and companies in the event of dissolution or liquidation?
A3: After the liquidation of a company is decided and a liquidator is appointed, in principle, directors and companies cannot engage in new operations. All liquidation procedures shall be done by the liquidator.

Q4. What is the liquidation based on judicial or administrative judgment?
A4: The liquidation based on the relevant laws and regulations depend on the type of industry, but in a widely common example, the case that the company was established for the purpose that is against public order and morals, such as a criminal purposes, or the case that it was decided that it should be liquidated by the creditor's appeal are considered.

Q5. Is the same procedure for dissolution in case of insolvancy?
A5: The principle is the same.

Q6. What is the procedure in case of bankruptcy in Mexico?
A6: Bankruptcy proceedings are subject to the Commercial Bankruptcy Law (Ley de Concursos Mercantiles). First of all, the debtor himself or the creditor makes a petition for bankruptcy in the court, but in the case of a claim by the debtor himself, the subsequent process differs depending on whether or not the reconstruction plan is submitted at this time. If the debtor do not submit a reconstruction plan, the court will need an expert to investigate the debtor and ask for an opinion on whether it is worthy of bankruptcy, and will make a decision based on that opinion. If a reconstruction plan is submitted, a bankruptcy declaration will be issued without conducting the investigations described above. The procedure for a creditor complaint is the same as that for not submitting a reconstruction plan, but in this case, there will be a nine-day opposition period. When a bankruptcy is declared, a trustee is appointed and a procedure based on laws and regulations is taken.

Q7. What is the procedure for closing a branch or a representative office of a foreign company?
A7: The procedure for closing a foreign company's branch or a representative office, although there are no clear rules, is generally as follows.
(1) Implementation of a board of directors, etc., regarding the closure of branches and representative offices, in the home country. Certification of the minutes by a notary public and the Ministry of Foreign Affairs.
(2) Notarization of the above minutes in Mexico.
(3) Deregistration at various institutions.

Q8. How can be appointed a liquidator?
A8: If there is no provision in the articles of incorporation, the liquidator will be appointed by the agreement of shareholders or partners. This will be done in the same procedure that the dissolution was agreed or approved and must also be registered in the commercial register. If for some reason the liquidator is not appointed, the court will do so at the request of shareholders or partners.

Q9. What kind of duties does the liquidator do?
A9: The liquidator is the person in charge of the liquidation affairs. They have the power for notification of the start of liquidation to the Tax Bureau, completion of company business, collection of company debt, sale of property of the company, payment of company property to each investor, preparation or relevant thing of final balance sheet for liquidation, registration of cancellation, keep company books and documents, etc.

Q10. It is said that there is a simple liquidation procedure, but how is it different from the normal liquidation procedure?
A10: It is a liquidation procedure that can be applied when certain conditions are met. The liquidation of the company and appointment of the liquidator are determined with the agreement of all partners or shareholders, and all partners or shareholders must sign such minute. Then, liquidation will be started by posting it on the electronic system of the Ministry of Economy. There is a deadline for each procedure, such as delivery of documents and distribution of residual assets. In this case, the relevant documents must be stored for 5 years.

Q11. In Which case is a simple liquidation procedure adoptable?
A11: The conditions for a simple liquidation procedure are as follows.
(1) Being composed only of partners or shareholders who are natural persons
(2) The company has no illegal purpose or does not habitually engage in illegal activities.
(3) Based on the provisions of Article 50-2 of the Commercial Act and provisions relating its operation, shareholder list relating to the current number of shares or notification of the registration for the shareholder list must be posted on the electronic system installed by the Ministry of Economy by 15 business days before the day of the general meeting of shareholders to resolve the dissolution.
(4) Have not been in business for the past two years and have not issued an electronic invoice.
(5) Have fulfilled tax, labor and social security obligations without fail.
(6) No financial debt with a third party.
(7) The legal representative is not subject to criminal proceedings for tax or property-related crimes.
(8) It is not a commercial bankruptcy.
(9) Not a corporate entity of the financial system.

【Q & A on Mexican trial and arbitration system】

Q1. What is the judicial system in Mexico?
A1: First, it can be divided into the federal level and the state or district level. Federal level jurisdiction resides in the Supreme Court, Circuit Council Court or Circuit Court, which is responsible for the protection claim lawsuit called Amparo, District Court or Election Court. Each court, except the Supreme Court and Election Court, exercises its rights under the supervision of the Federal Judicial Council. At the state level, it depends on the regulations of each state or district, but generally there are a higher court, first trial court, and lower court from the top. There are courts of various names, such as Small Claims Court, Security Court, District Court, Country Court. These courts are used according to the case contents and the amount of the complaint.

Q2. What is the civil lawsuit system in Mexico?
A2: A civil action in Mexico is started by filing a complaint against the court. Generally, civil procedure is divided into the following five stages. There is no jury system for Mexican civil lawsuits.
(1) Delivery of summons
(2) Mediation hearing
(3) Submission of evidence
(4) Closing argument
(5) Judgment

Q3. Will Japanese judgments be enforced in Mexico?
A3: In order to enforce a Japanese judgment in Mexico, it must be approved by a Mexican court. Approval is judged based on applicable Mexican legislation.

Q4. Is there any special handling for labor cases in Mexico?
A4: In Mexico, the resolution of labor disputes between employees and employers is handled by the mediation center, which takes the form of a hearing, and then at the labor court, according to the constitutional provisions.

Q5. Is there a mediation system in Mexico?
A5: Some provisions at the federal level stipulate mediation for criminal cases, but there are no civil stipulations for mediation. However, there are private dispute resolution institutions, and there are increasing cases of using mediation in civil matters.

Q6. What is the arbitration system in Mexico?
A6: Arbitration provisions are found in the Commercial Code and the Federal Civil Procedure Law, and the Commercial Code provisions correspond to the UNCITRAL International Commercial Arbitration Model Law. Mexico also ratified the New York Convention in 1971 and the Panama Convention in 1978. The arbitration is based on Mexican and international laws, and the arbitral award is said to be as effective as a court decision. Mexico's arbitral award can be enforced in foreign countries under the New York Convention. Similarly, foreign arbitration awards can be enforced with permission from the court. In this case, the court will be a federal court or a state court, depending on the choice of the parties.

Q7. Is it able to submit documents written in English to the court?
A7: Documents written in languages other than Spanish must be accompanied by a Spanish translation created by an accredited translator.

Q8. Which arbitration tribunal is common in Mexico?
A8: Typical examples include the International chamber of commerce, the Arbitration center of Mexico (Centro de Arbitraje de México), and the Mexico City National Chamber of Commerce (Cámara de Comercio de la Ciudad de México).

Q9. Can the jurisdiction be decided freely?
A9: It is possible to freely decide the court of jurisdiction by the agreement of the contracting parties. In principle, the jurisdiction will be the court over the location of the defendant unless the parties agree, so it is possible to avoid a trial in a distant place by including a provision about jurisdiction in the contract.

Q10. Are there any particular court procedures used for commercial transactions?
A10: In case that the other party is a merchant or that a dispute caused by a commercial act, the commercial proceedings stipulated in the Commercial Act (Código de Comercio) will be used. In addition, it is stipulated that types of commercial activities, such as the sale and purchase of goods, rental of goods, sale and purchase of commercial real estate, and so on.

Q11. What kind of procedures is the commercial proceedings?
A11: There are two types of proceedings; ordinary commercial litigation and oral commercial litigation. Also, the execution procedure can also be two types; commercial ordinary execution procedure and commercial oral execution procedure. If the amount of the claim does not exceed $1,000,000.00MXN, the oral commercial litigation and oral commercial execution procedures will be used, and the process will be faster than the ordinary one.

Q12. Are there any disadvantages to the oral commercial litigation?
A12: In principle, an appeal cannot be claimed after a judgment is issued.

Q13. What is the process of ordinary commercial litigation?
A13: The process of ordinary commercial litigation in Mexico can be divided into four stages: (1) Filing the litigation, (2) Examination of evidence, (3) Pleadings or Arguments and (4) Judgment.
In (1) Filing the litigation, the plaintiff files a lawsuit and presents the legal basis for the lawsuit. The defendant will respond and can file a counterclaim. In (2) Examination of evidence, evidence is submitted. In (3) Pleadings or Arguments, both parties argue to the judge that their claims are accepted based on the facts from the evidence. In (4) Judgment, the judge will decide whether the claim is accepted.

Q14. Is it possible to apply for execution in Mexico if the other party does not follow the payment order? If possible, is such execution procedure different from Japanese one?
A14: It is possible to apply for execution in Mexico. At the time of filing, it is only necessary to state the address of the debtor, and unlike Japan, it is not required to identify the defendant’s property. Moreover, plaintiff can ask the judge to make defendant to present bank account at the time of filing, and if the defendant denies it, the judge can inquire it directly to the bank.

Q15. Will the commercial arbitration proceedings in Mexico be kept confidential?
A15: Article 1435 of the Commercial Code “Código de Comercio” stipulates that the parties have broad discretion to determine the arbitral proceedings, and it is considered that the parties have the power to decide whether the arbitration will be confidential or not. Therefore, any non-disclosure agreement by the parties included in their arbitration agreement would be binding, including the arbitrators as well.

Q16. What is required to resolve a dispute through commercial arbitration?
A16: According to the provisions of the Commercial Code “Código de Comercio”, a written arbitration agreement between the parties is required. Documents showing this agreement are said to include documents signed by both parties, as well as documents that record the agreement or the existence of the agreement using telecommunications technology or others.

Q17. Can a dispute included in a commercial arbitration agreement be filed a lawsuit?
A17: First paragraph of Article 1423 of the Commercial Code (Código de Comercio) stipulates that except in cases where the arbitration agreement is invalid, a judge who receives a filing of lawsuit concerning a dispute which is subject of an arbitration agreement must refer it to an arbitration upon the request of any of parties. If both parties do not insist on the existence of the arbitration agreement, it can be resolved through lawsuit, but if one party insists on the existence of the arbitration agreement, it cannot be resolved through lawsuit.

Q18. The arbitration agreement provides for arbitration at the CAM, a Mexican arbitration institution. How are the arbitration fees determined for arbitration at CAM?
A18: Depending on the amount in dispute, administrative fees and arbitrator’s fees are set and can be found on the CAM website. For example, for arbitrations based on arbitration agreements after October 1, 2011, if the amount in dispute is 2,000,000 pesos, the administrative fee will be 42,000 pesos and the arbitrator’s fee will be 82,200 pesos.

Q19. What are the legal fees for lawsuits in Mexico?
A19: According to the Constitution, everyone is guaranteed the right to a trial, and it is stipulated that there is no charge for this. However, actual costs (experts' fees, copy fees, etc.) and attorney's fees will be charged separately.

【Q & A on Mexican patents】

Q1. What kind of invention can be patented?
A1: Under the provisions of the Federal Law for Industrial Property Protection (Federal de Protección a la Propiedad Industrial), new inventions with industrial applicability resulting from the outcome of inventive step can be patented. The following are not considered inventions.
(1) Discovery of scientific theory and principles
(2) Mathematical method
(3) Literature, work of art, or other aesthetic creation
(4) Schemes, plans, rules and methods for conducting intellectual activities for games and economic and commercial activities
(5) Computer program
(6) Methods for present information
(7) Biological and genetic substances found in nature
(8) A juxtaposition of known inventions or a combination of known products. However, in the case of combinations that cannot function individually, unless their characteristic properties or functions have been modified to produce industrial outcomes or uses that are not obvious to those familiar with the technology in the field.

Q2. What is the definition of an invention?
A2:The Federal Law for Industrial Property Protection (Federal de Protección a la Propiedad Industrial) stipulates, the invention is“Creation of people who change materials or energy that exist in nature into a form that can be used to meet specific needs of people” .

Q3. Are there any inventions that cannot be patented?
A3: The inventions that cannot be patented are the following .
(1) Content that violates public order and morals, or laws and regulations.
(Including those that threaten the life and health of humans, animals and plants, and those that cause serious damage to the environment)
(2) Essential biological methods for the generation, replication or reproduction of animals and plants
(3) Surgical or therapeutic methods for the human body or animals and their diagnosis
(4) Animal and plant varieties excluding microorganisms
(5) Discovery of one of the elements of the human body at various stages, including the whole or partial sequence of genes
However, biological materials that are isolated from the natural environment and obtained by technical procedures may be subject to patented inventions.

Q4. Which language is used for applying?
A4: The application language will be Spanish. If you are submitting a document written in another language at the time of application, you will need to attach a translation into Spanish language.

Q5. What is the official cost required to apply for a patent?
A5: There is no examination request system for patent applications, and all applications are examined, so the following costs including the examination request fee are required at the time of application. In addition, the following costs are subject to a 16% value added tax.
Application (up to 30 sheets): 4550 pesos
61 pesos will be added for each additional sheet.
Amendment or change of application: 818.08 pesos / time
Early publication request: 1185.35 pesos

Q6. Is it possible to change from a utility model application to a patent application?
A6: If it is considered that the content of the application is not consistent with the protection law applied, the utility model application should be changed to a patent application within 2 months from the date of filing or within 2 months from the date when the Industrial Property Office requests the applicant to change the application. A change from a patent application to a utility model application is also possible.

Q7. Is it possible to apply for a patent in Mexico based on a patent application in Japan?
A7: Mexico became a member of the Paris Treaty in 1903 and PCT in 1995, and it is possible to apply through the Paris route and PCT route. In case of Paris route, priority application can be claimed by filing in Mexico within 12 months from filing in Japan. In case of PCT route, it is necessary to carry out the transition procedure in Mexico within 30 months from the international filing date (or priority date).

Q8. I received an invitation for amendment for the patent I applied for. How should I respond?
A8: An invitation for amendment will be issued if there are reasons for refusal in the application. The response period has a deadline of less than 2 months, so you will need to submit amendments to the contents that comply with the directive during that period. The response period can be extended for 2 months only once.

Q9. A patent is granted on an application. How many years can be claimed its patent right?
A9: As long as the annual fee is paid, the patent right will last for 20 years from the date of filing the patent. That term cannot be extended.

Q10. Is there a system for searching patents in Mexico?
A10: SIGA (Sistema de Información de la Gaceta de la Propiedad Industrial) is a search system for Gazette related to industrial property. You can search by keyword or by date. Besides patent gazettes, trademark gazettes can be searched.

Q11. Is it possible to apply for a patent online?
A11: You can apply from “Patente en Línea” which is a part of the Electronic Services of the Industrial Property Institution (Servicios Electrónicos del IMPI https://eservicios.impi.gob.mx/seimpi/). In this case, you at first need to create an account using CURP (Clave Unica de Registro de Poblacion) and your email address.

Q12. Are there any provisions regarding inventions by employee?
A12: Inventions under employment relationship are stipulated in the Federal Labor Law (Ley Federal de Trabajo). The patent right belongs to the employer only when the employee is involved in the research work in the company and the employee who invented the invention receives compensation based on the agreement of the parties or the decision of the court.
In any other cases, the invention belongs to the employee, but the employer has priority right on the exclusive use or acquisition of the invention or relevant patents.

Q13. Is there a way to search only for medicine patents?
A13: The Mexican government is promoting the production of high-quality, low-priced generic medicines, and the Mexican Patent Office (IMPI) provides a patent search system for medicines.

【Q & A on Mexican trademarks】

Q1. What are the benefits of registering a trademark?
A1: Once a trademark has been registered, the trademark can be used exclusively, and any person who infringes its rights shall be removed from the use of the same or similar trademark and be claimed damages. There are also administrative measures and criminal penalties.

Q2. What do I need to prepare for a trademark application?
A2: A trademark request is done by filing an application. The following information must be included in the application. The application must be in Spanish.
(1) Applicant's name, address and email address
(2) Trademark to be registered
(3) The date on which the trademark to be registered was first used, or a statement that it is unused (if not stated, the trademark is recognized as unused)
(4) Products and services that use the trademark to be registered
(5) Other matters stipulated in the Law and regulations

Q3. How much does it cost to a public institution when a trademark is applied?
A3: The following fees are required for filing a trademark. The following amount will be subject to a 16% value added tax.
Application: 2695.18 pesos

Q4. What is the flow of application for trademarks?
A4: The process is “application → public notice → formal examination → substantive examination → registration”. The average examination period from application to registration is said to be 6 to 12 months, but the procedure is often delayed, and it is necessary to apply with plenty of time.

Q5. What will be examined in substantive examination?
A5: In substantive examination, distinctiveness as a trademark, similarity to prior trademarks, etc. are examined.

Q6. If it is difficult to determine whether a trademark to be filed has distinctiveness, is there any other way besides applying?
A6: The decision as to whether the trademark to be filed has discriminating power is based on the judgment of the examiner. Applications will be submitted after sufficient consideration.
If the examiner determines that the trademark registration requirements are not met, the reason for refusal will be notified in writing, and the applicant will be given an opportunity to object or amend.

Q7. What kinds of trademarks cannot be registered?
A7: The followings are defined as marks that are not registered as trademarks.
(1) Technical or commonly used names of products or services for which trademark protection is sought, words that are common names or general names of such products or services due to daily terms or business practices, or which lacks of distinctiveness.
(2) Three-dimensional shapes or industrial designs that are publicly known or that can be used by the general public, or lacking distinctiveness, ordinary or common shapes of products, or shape determined by industrial function.
(3) Holograms that are known or lack uniqueness.
(4) Mark that is recognized as a whole describing products or service for which trademark protection is sought, including descriptive or instructional terms that serve to identify the type, quality, quantity, ingredient or content, use, price, place of origin or time of production of products or services.
(5) Independent letters, numbers, their names, and colors. However, these are excluded if they are combined with or accompanied by a mark with special conspicuity.
(6) Translation, transliteration, rearrangement of spellings and combinations, of words that cannot be registered.
(7) Unauthorized reproduction or imitation of national, state, local government or other administrative entity's emblem, flag or insignia, and names, abbreviations, marks, or armorial bearings and publicly used signatures of international organizations, government organizations, NGOs or other recognized organizations, and designations related to them.
(8) Duplicating or imitating official signs or official seals for management or guarantee adopted in Mexico without the permission of the competent authority, or marks that are duplicating or imitating coins, banknotes, commemorative coins or other Mexican or foreign legal coins
(9) Duplicating or imitating the names, marks or graphic representations of decorations, medals and other prizes awarded at official trade shows, product exhibitions, gatherings, cultural events or sporting events
(10) That is which with a unique or ordinary geographic name and map, as well as a noun or adjective indicating cities and display the source of the products or services and cause confusion or misperception of such source. It includes expressions such as “género”, “tipo”, “manera”, “imitación”, “producido en”, and “con fabricación en”, and expressions that cause such misunderstandings to consumers or unfair competitions.
(11) Names of cities or places known for the manufacture of specific products or services, which are named to protect such products or services. It includes expressions such as “género”, “tipo”, “manera”, “imitación”, “producido en”, and “con fabricación en”, and expressions that cause such misunderstandings to consumers or unfair competitions.
(12) Names of prominent private property characterized by the manufacture of specific products or provision of services, without the consent of the owner.
(13) Names, surnames, nicknames, or pen names of prominent persons that, if used, could cause a connection or could lead to consumer misunderstanding, misuse, or confusion. However, in the case of the person concerned, the case of the person or the person who has the right are excluded. Similarly, if there is no explicit consent of the rightful person or the person is dead, the person's image, identifiable voice, portrait or video.
(14) Names and titles that are confused with the titles of literary and artistic works, and imitations of such titles, which are widely misunderstood and misunderstood as related to those works. Stuff. However, this excludes cases where explicit consent has been obtained from the rightful owner of the work. Similarly, a mark that is a reproduction of all or part of a literary or artistic work without explicit approval from the author. Similarly, a fictional character or symbolic character depicted in such a work, or a figure with a character that can be misunderstood as related with such characters. However, it excludes the application by the author himself or a third party with the author's consent.
(15) Marks that may be generally misunderstood or misleading, such as inappropriate display of company names, characteristics, properties, and components that can distinguish services and products.
(16) A mark that is the same as or similar to a trademark that the Industrial Property Office judges or declares that it is well known in Mexico based on the provisions of Chapter 4 Section 2 of the Industrial Property Law for being used for products or services and applicable in the following cases. However, this does not apply if the registered applicant is the owner of a well-known trademark.
(a) When there is a risk of confusion with the owner of a well-known trademark or misunderstanding of the alliance
(b) When there is a risk of unauthorized theft by the owner of a well-known trademark
(c) When there is a risk of harming the reliability of well-known marks
(d) When there is a risk of diluting significant features of a well-known trademark
(17) A mark that is similar to or confused with a trademark that the Industrial Property Office judges or declares that it is famous for use in products or services under the provisions of Chapter 4, Section 2 of Industrial Property Law. However, this does not apply if the registered applicant is the owner of a well-known trademark.
(18) A mark that is the same as or confusingly similar to another trademark that has been filed earlier and is already registered and still valid, and also such mark will be used for a same or similar product or service.
(19) The trade name used by a company or industrial, commercial or service establishment whose main business is the manufacture, sale or provision of products or services to be protected by the mark, and that is same or confusingly similar to those used on the registration filing date of the mark or before the date of first use oath. However, this shall not apply if the trademark registration application is filed by the owner of the trade name and no other same trade name has been published.
(20) The official name of a natural person that is same as or confusingly similar to the trademark that is being applied for the same or similar products or services and is proceeding registration, the registered trademark that is still valid, or the published products name.
(21) Names representing the varieties of protected flora and fauna, or marks that reproduce or mimic their components, which may mislead consumers about the designated products or services.
(22) Marks for which an application was filed in bad faith. In addition, when a legitimate rights holder is harmed and an intention to gain profits wrongfully, it is also considered bad faith.
Of these, conditions (1) to (6) do not apply when a trademark for a product or service having characteristics resulting from use in the market is filed.
In addition, if a three-dimensional shape is applied for protection only in a form that is unique to its nature or functionality, it will not be considered unique.
Moreover, the conditions (18)-(20) do not apply if express written consent is given for similar marks.

Q8. How do I specify designated products or designated services?
A8: Mexico is a member of the Nice Agreement, and the Nice classification is used for the classification of products and services. The applicant can specify a classification according it, but the classification to which it belongs is ultimately determined by the Industrial Property Office. In Mexico, one application and one division system is adopted, so designation of products and services across multiple divisions is not permitted.

Q9. Can I use the Mad Pro system when applying for a trademark in Mexico?
A9: Since Mexico joined Mad Pro in 2013, you can use the Mad Pro system.

Q10. The trademark applied for is registered. How many years can its rights be claimed?
A10: In principle, registered trademarks last 10 years. Due to Law reform, however, for trademarks registered after August 10, 2018, its usage declaration must be submitted within 3 months from the date 3 years after its registration. Once such declaration failed, its registration shall be canceled.

Q11. Is it possible to request cancellation of trademark right in Mexico even if it is not used?
A11: If the registered trademark is not used in Mexico for 3 years, it will be subject to cancellation due to non-use.

Q12. Is there anything else to prepare for the declaration of use to be submitted in the third year after the trademark is registered?
A12: Such declaration must be accompanied by a proof of fee payment. The fee is 985.67 MXN (excluding tax, as of April 2020). An address within Mexico is required to receive the notification. If the rights holder resides outside of Mexico, it will be submitted through an authorized agent or legal representative residing in Mexico.

Q13. 10 years have passed since the registered trademark was registered. Is it possible to renew?
A13: The registered trademark can be renewed every 10 years. Renewal applications can be applied between 6 months before the expiration date and 6 months after the expiration date, and at the time of application, it is also necessary to submit a usage declaration.

Q14. What can be used as evidence of trademark use?
A14: The Industrial Property Law stipulates that everything except testimonies and statements can be used as evidence. It is said that electronic invoices (CFDI) that describe products or services are valid, as well as the products themselves and advertisements.

Q15. Is there a search system of registered trademark in Mexico?
A15: There is a system called MARCia that can search for registered trademarks and applied trademarks. In addition to simple search by entering a trademark or uploading a logo, you can also search by category, product/service, registration number, holder name, etc.

Q16. Is it possible to apply for a trademark online?
A16: You can apply from “Marca en Línea” which is a part of the Electronic Services of the Industrial Property Institution as same as in case of patent, please refer to No.12 of Q&A on Mexican patents.

Q17. Are there any rules such as symbols indicating registered trademarks in Mexico?
A17. "Marca Registrada", "M.R.", and can be showed to registered trademarks. In order to claim damages for infringement on trademark right or take civil, commercial or criminal measures, it is necessary to make it public known that it is protected as a trademark right, such as by showing those symbols.

【Q & A on Mexican lawyer system】

Q1: How can I get a Mexican lawyer qualification?
A1: A Mexican lawyer (abogado) qualification (Cedula Professional) must be obtained by registration with the Ministry of Public Education (Secretaría de Educación Pública) after obtaining a law degree approved by the Ministry of Public Education or a specific national university. It is said that it usually takes 4 to 5 years to obtain a law degree, and after completing the lecture, it is necessary to conduct practical training as volunteers.

Q2: Is there a bar association in Mexico?
A2: In Mexico, lawyers do not need to register with a bar association when they work as a lawyer. Therefore, there are several bar associations, but it is said that very few lawyers are registered.

Q3: Can foreign law firms work in Mexico?
A3: Currently, there are no special regulations specialized for foreign law firms. Foreign law firms can provide advisory services on foreign and international law as a company. If the foreign investment ratio of the corporation exceeds 49%, approval from the Foreign Investment Committee is required.

Q4: Does Mexico have the same qualifications as judicial scriveners and administrative scriveners?
A4: There are no related legal experts such as judicial scriveners and administrative scriveners in Mexico, and lawyers comprehensively perform these duties.

【Q & A on Legal matters】

Q1. What is UMA?
A1: UMA is an abbreviation for “Unidad de Medida y Actualización” and is a unit used in various ways such as fines, penalties and social security payments. Each year, the Instituto Nacional de Estadística y Geografía (INEGI) decides and publishes it. The UMA for 2022Between February 2022 and January 2023is 96.22 pesos per day, 2,925.09 pesos per month (30.4 times daily amount) and 35,101.08 pesos per year (12 times monthly amount).

Q2. What is NOM?
A2: The official Mexican standard (Norma Oficial Mexicana) is commonly called "NOM". It is a legally enforceable standard and is set for the purpose of protecting people's safety and health, protecting animals, plants and the environment, and ensuring a safe working environment. It covers a variety of product specifications, manufacturing processes, measuring and weighing equipment, packaging and labeling specifications, and workplace safety and health. In addition, when importing NOM products such as food, electronic and electrical products, and telecommunications equipment, it is necessary to obtain certification.

Q3. I was asked to submit a document certifying my address. What kind of documents do I need to prepare?
A3: A common address proof (comprobante de domicilio) is an invoice for electricity, gas, water, telephone, etc. within 3 months of issuance. The requirements differ depending on which institutions you will submit or whether the subject of the procedure is a judicial person or a natural person, but the requirements under the Tax Administration Bureau (SAT) procedure are as follows.
Account statement of financial institution in the name of taxpayer (within 4 months from the issue)
Receipt of real estate tax in the name of taxpayer (within 4 months from issuance)
Electricity, gas, internet, pay broadcasting, telephone, and water bills in the name of taxpayers (within 4 months from the issue)
Mexican social insurance payment slip in the taxpayer's name
A lease agreement that meets the legal requirements with the lessor's RFC
Delegation contract from taxpayer (must have receipt for office usage for 6 months or more and tax requirements)
Notarized trust agreement
Account opening contract in the name of taxpayer (within 3 months from conclusion)
Electricity, telephone, and water supply contracts in the name of taxpayers (within two months from the conclusion), etc..

Q4. Is it possible to apply for registration of industrial designs in Mexico?
A4: Mexico also has a design registration system, in which registration will be completed after application, examination and payment of the registration fee. The right can be protected for 5 years from the date of application and up to 25 years by renewing every 5 years. Mexico also joined the Hague Agreement on March 6, 2020, and will take effect on June 6, 2020. This will also enable applications for international design registration under the Hague Agreement.

Q5. What kind of laws should be referred to in Mexican commercial transactions?
A5: It depends on the type of business transaction, but as a general rule, it follows the Federal Civil Act (Código Civil Federal) and the Commercial Act (Código de Comercio). In some cases, it is necessary to refer to the provisions of each State's Civil Act, and if there is any controversy between provisions of the Federal Civil Act and State Civil Act, the provisions of the Federal Civil Act shall apply.

Q6. What are the requirements for completion of a contract in Mexico?
A6: According to the Federal Civil Act (Código Civil Federal), a contract requires consent, and the purpose or subject of the contract, and unless otherwise required by law, it is complete with agreement of parties. However, the contract may be invalid if the parties or one of them lack legal ability, in case of lack of agreement, if the purpose of the contract is against the law, or if there is no explicit consent given in accordance with the law.

Q7. In what case is it judged to be legal incapacity?
A7: According to the Federal Civil Act (Código Civil Federal), in case of minors or in case of those who may have limited capacity due to age, illness, or addicted to drug or alcohol. Minors are considered to be under the age of 18, but there are some acts, such as opening a bank account, may be admitted even under the age of 18 in accordance with law and regulation.

Q8. Is there anything I should be careful about when signing a building lease contract?
A8: First, your lease agreement must include at least the following information:
a) The name of the lessor and the lessee.
b) Address of the property.
c) A description of the property and its accessories covered by the contract and their status.
d) Amount of rent
e) Warranty (if applicable)
f) Lease period
Also, it is important to check whether the lessor has the right to lease the property, check the property deed, etc., and if both parties are corporations, confirm that they are legally established with its article of incorporation, RFCs, etc.
It is also necessary to confirm whether the content of the contract matches the negotiation results, and to receive the receipt or Factura for the payment of deposit, guarantee deposit, rent, etc. If you rent through a real estate agent, you need to check the agent as well, and not only the article of incorporation and RFC, but also whether the office actually exists.

Q9. There are federal and state laws in Mexico, is there any rules regarding the governing law in contracts?
A9; Governing law, in principle, can be determined by the agreement of the parties.

Q10. Is statutory interest regulated in Mexico?
A10; According to the Código Civil Federal, statutory interest is 9% per annum. It is possible to set a lower or higher interest rate by the agreement of the parties. However, biased and unfair interest rates may be changed by a judge.

Q11. What is a definition of a group company in Mexico?
A11: Although it is not clearly defined by law, in general, it is considered a collection of parent companies and subsidiaries that act as a single economic entity under a common management system, with two elements: (1) subordination and (2) there is a common purpose and direction among companies.

Q12. Is there any regulation relevant to prescription in Mexico?
A12: Unless otherwise specified by law, the Federal Civil Act (Código Civil Federal) states that a claim expires 10 years after you can claim it.

Q13. In what cases does the limitations of prescription be other than 10 years?
A13: For example, in the case of retail sales, 1 year from the date of sale, in case of check, 6 months from the last day of the reimbursement period for checks, 1 year for wage claims in labor relations, unfair dismissal can be claimed for 2 months from the date of dismissal, and so on.

Q14. Are there any rules for making a power of attorney?
A14. The Federal Civil Act (Código Civil Federal) states that delegation may be authorized in writing signed before two witnesses. However, depending on the procedure you are going to follow, there are formats that each institution determines, so you need to confirm each by each.

Q15. What kind of method can be taken for the acquisition in Mexico? Also, which laws and regulations should be referred to.
A15: Acquisition methods will be considered the acquisition of shares, the merger, and the transfer of business (assets). Laws to be referred to need to be confirmed individually and specifically, but the main ones are the Company Act (Ley General de Sociedades Mercantiles), the Securities Market Law (Ley del Mercado de Valores), and the Federal Tax Law. (Código Fiscal de la Federación), Federal Labor Law (Ley Federal del Trabajo), Social Security Law (Ley del Seguro Social), Commercial Law (Código de Comercio).

Q16. In the building lease contract, the landlord asked me to set a guarantor. What kind of person can be a guarantor?
A16: The conditions of the guarantor differ depending on the lessor, however in general, it includes those who have real estate for which no mortgage has been set at the location of the leased property. In the case of a residential property, the corporation where the lessee works may be the guarantor even if the above conditions are not met. In addition to the guarantor, you may be able to conclude a lease contract with a guarantee from a surety company, an increase in security deposit, or prepayment of rent.

Q17. Is the acquisitive prescription allowed in Mexico?
A17: The acquisitive prescription also exists in Mexico and it is called Prescripción Positiva. Typical one is that stipulated in Federal Civil Act (Código Civil Federal) and it said that under certain conditions, real estate is allowed to be owned by its occupant after a period of 5 or 10 years and real estate after 3 or 5 years.

Q18. Is there a consumer protection system in Mexico?
A18: There is a law that regulates consumer protection called Ley Federal de Protección al Consumidor, and there is also a consumer protection system in Mexico, and the agency called Procuraduría Federal del Consumidor (commonly known as PROFECO) plays that role. Not only natural persons but also legal entities that are ultimate consumers are protected.

Q19. What kind of business is covered by Ley Federal de Protección al Consumidor?
A19: The Ley Federal de Protección al Consumidor is applicable to a natural person or legal entity under Código Civil Federal that habitually or regularly provides, distributes, leases and offers the enjoyment of use of goods, products and services. However, they are excluded it such as professional services that do not have commercial characteristics and services of financial institutions such as banks and securities companies regulated by financial laws, and so.

Q20. From the perspective of consumer protection, what points should a business operator aware of?
A20: First, information on products and services for consumers must be in Spanish and legible with the naked eye. In addition, those advertisements must be genuine and verifiable, and must not contain misunderstanding or misleading text, displays, sounds, images, trademarks, or indications of origin. For plans or packaged products, the information, at least, such as the total price and unit price in national currency, description, characteristics, content of the product, and other information contained in the plan or package shall be provided. In case of offering promotion or discount, the information, such as the applicable conditions and how to use them, is needed to be informed.

Q21. What is required to comply with the handling of personal information in Mexico?
A21: There is a law regarding the protection of personal information in Mexico as well. In the private sector, reference should be made to the law, Ley Federal de Protección de Datos Personales en Posesión de los Particulares, its regulation, the laws set by each state, and the guidelines, Lineamientos del Aviso de privacidad, and recommendations, Recomendaciones en Materia de Seguridad de Datos Personales. When handling personal information, based on those above, providing privacy policy, obtaining consent for handling personal information, and insurance for confidentiality, etc. must be carried out.

Q22. What kind of information is defined as “Personal Information” in Mexico?
A22: Personal Information is defined as "information that identify or can identify a natural person”. In addition, "information that reveals race, ethnicity, health status, genetic information, religious, philosophical or moral beliefs, trade union affiliation, political views, sexual preferences, etc., and that affects the most confidential area of the individual, or information that can be discriminated against or carry serious risks due to improper use" is defined as Sensitive Personal Information.

Q23. What is the handling of personal information defined in Mexico?
A23: The handling of personal information is defined very broadly as "acquisition, use, disclosure and storage of personal information by all means. "use" includes all actions such as access to, management, use, transmission and disposal of personal information.".

Q24. What kind of content should be stipulated in the privacy policy?
A24: The privacy policy must include the following contents.
Name and address of entity handling personal information, and address of person responsible for the management of the personal Information
Personal information or sensitive information to be handled
Purpose of handling personal information
Method to convey the opposite intention to the entity handling personal information regarding the acquisition of personal information
Third parties who receive personal information and its purpose when personal information is provided to third parties
A clause indicating whether the person having the personal information accepts the provision to a third party
Methods for exercising the rights of access, amendment, revocation, and opposition (Derechos de Acceso, Rectificación, Cancelación u Oposición, hereinafter "ARCO")
How to revoke the consent to acquire personal information
How to restrict the use and disclosure of his/her personal information by the person having the personal information
Information on the mechanism by which personal information is acquired when it is acquired using cookies, web beacons, or other similar functions.
How to notify when there is a change in the privacy policy

Q25. We use a unified privacy policy which for group companies. The content meets the Mexican requirements, but is available in Japanese and English only. Does it need to prepare in Spanish as well?
A25: If the Mexican corporation handles personal information, it is necessary to follow the guidelines regarding the privacy policy when formulating the privacy policy, and it is stipulated that the language shall be Spanish in this guideline.

Q26. How must the privacy policy be presented to the person having the personal information?
A26: It is said that the privacy policy can be presented by physical, electronic, voice, or other technical methods. For example, it could be presented in writing, posted on a website or email, or voice guidance over the phone.

Q27. In case that a privacy policy is sent to a person holding personal information by e-mail and such person do not reply with or without consent after a certain period, is it considered as the consent of the person holding personal information have obtained?
A27: Consents are expressed by oral, written, electronic or optical means, but in principle, unless required by sensitive personal information, property information or other statutory provisions, an implied consent is sufficient. If the person holding personal information does not indicate the intention of refusal by the method specified in the privacy policy, it means that he/she has agreed to the acquisition and handling of personal information for that purpose. If the privacy policy stipulates that an intention to refuse by e-mail within a certain period, and such e-mail hasn’t received within that period, it can be considered that the consent has been obtained.

Q28. Are electronic signatures accepted in Mexico?
A28: There is no uniform law on electronic signatures, but there are individual laws such as the Civil Code “Código Civil Federal” and the Commercial Code “Código de Comercio” that recognize the validity of electronic signatures. For example, Article 1803 of the Civil Code regulates that an oral, written, electronic, optical, or other technological expression of approval is an express consent.

Q29. What is accepted as a digital signature?
A29: Under the Commercial Code “Código de Comercio”, an electronic signature is a data in electronic form that recorded in, attached to or logically associated with, by any technology, data messages (information generated, transmitted, received, or submitted by electronic, optical, or other technology). It is supposed to identify the signer in connection with the data message and indicate that the signer approves the information contained in the data message. Some can be signed using a user name and password, some can be digital data, and some can be biometric, so on. “e.frima” used for tax and other procedures is also one of the electronic signatures, but it is distinguished as an advanced electronic signature (Firma Electrónica Avanzada).

Q30. What is an advanced electronic signature?
A30: An advanced electronic signature (Firma Electrónica Avanzada) is a set of data and characters that enables the identification of the signer, and is created by electronic means under exclusive control. It is an electronic signature that meets four requirements, i)the signature creation data is only correspond to the signer, ii) the signature creation data is under the exclusive control of the signer at the time of signing, iii) it is possible to detect the change of the electronic signature made after signing, iv) it possible to detect changes in the information made after signing, regarding to the integrity of the information in the data message.

Q31. Can electronic signatures and contracts be valid as evidence in court?
A31: Contracts made by the electronic method are also admissible evidence under Articles 89, 1205 and 1298-A of the Commercial Code “Código de Comercio” and Article 210-A of the Code of Civil Procedure “Código Federal de Procedimientos Civiles”.

Q32. Are trade secrets protected by Mexican law?
A32: In Mexico, trade secrets are called “Secreto industria" and are protected by the Federal law on Industrial Properties Protection (Ley Federal de Protección a la Propiedad Industrial). In addition, there are provisions in the Federal Labor Law (Ley Federal del Trabajo) and the Federal Criminal Act (Código Penal Federal). In the event of a secret leak, in addition to claiming damages, dismissal based on the Federal Labor Law and criminal punishment based on the Federal Criminal Act may be imposed.

Q33. What kind of things is considered as trade secrets?
A33: Federal law on Industrial Properties Protection (Ley Federal de Protección a la Propiedad Industrial) regulates that a trade secret (secreto industria) is all information for industrial or commercial use that is kept confidential by those who exercise legal control. Moreover, such information shall have a competitive and economic advantage over third parties in the performance of economic activities and is adopted sufficient means or systems to maintain its confidentiality and access restriction. It also states that trade secrets may appear on documents, electronic or magnetic media, optical discs, microfilms, films, or other media.

Q34: What rights are granted to a person holding personal information?
A34. A person holding personal information is granted the ARCO rights; right of access, correction, deletion and objection, in addition, the right of withdrawal of consent.

Q35. What is required for the international transfer of personal information?
A35: An international transfer of personal information is permitted if the information recipient takes responsibilities as same as the person handling personal information, on the premise that the consent of the person having the personal information and the purpose of use do not exceed the scope stipulated in the privacy policy. The person who handling personal information may enter into a contract or take other legal measure with the information recipient that contains at least the same obligations as those assumed by the person who handling personal information. For this purpose, it is effective to conclude an information transfer agreement between the person who handling personal information and the information recipient.

Q36. Are there any penalties for violations of the Federal Law on Protection of Personal Data Held by Private Parties (Ley Federal de Protección de Datos Personales en Posesión de los Particulares)?
A36: The Law regulates warnings or fines as penalties. The National Institution for Transparency, Access to Information and Protection of Personal Data (Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales: INAI) can issue warnings and fines to violators. The Law also provides with detention for those who commit security violations.

Q37. If I have accepted a contract by mistake, am I still bound by the contract?
A37: If there is a mistake in the consent of the contract, or if the consent was made by fraud or threat, the contract is not valid.

Q38. Is it possible to revoke the contract application?
A38: In case that a deadline is set for the application for the original contract, the person who applied will be bound by such application until the deadline expires. On the other hand, in case that a deadline is not set, an application can be revoked if an immediate response to the application via face-to-face, telephone, email, or the internet is not made.

Q39. Does a contract in Mexico have to be written in Spanish to be valid?
A39: In general, contracts in Mexico do not require that their languages should be Spanish. However, there are cases where the articles of incorporation of a company, real estate purchase agreement, or power of attorney, etc. must be written in Spanish to notarize.

Q40. What kinds of things can be copyrighted in Mexico?
A40: Works that are originally created and that can be perceived, transmitted, or reproduced in any form or medium are protected by law. Moreover works can be categorized 1)literary, 2)musical works with or without lyrics, 3)dramatic, 4)dance, 5)pictorial or drawing, 6)sculpture and plastic arts, 7)cartoon and comic books, 8) architectural works, 9)film and other audiovisual works, 10)radio and television programs, 11)computer programs, 12)photographic, 13)works of applied art that include graphic or textile design, or 14)compilation, consisting of collections of works, such as encyclopedias, anthologies and databases

Q41. What is exempted from copyright protection in Mexico?
A41: They are exceptions: 1)Ideas, formulas, solutions, concepts and in general inventions of any kind, 2)industrial or commercial exploitation of ideas embodied in works, 3)schemes, plans or rules for performing mental acts, playing games or doing business, 4)letters, digits or colors individually, except where they are stylized to such an extent that they become original designs, 5)names and titles or phrases individually, 6)mere layouts or blank forms for completion with any kind of information, and related instructions, 7)unauthorized reproductions or imitations of the coat of arms, flag or emblem of a country, State, municipality or equivalent political subdivision, or the names, abbreviations, symbols or emblems of intergovernmental or non-governmental international organizations or any other recognized body and their designations, 8)legislative, regulatory, administrative, or judicial texts and their official translations, interpretations comparative studies, annotations, commentaries and other similar works that involve the creation of an original work, 9)the content of news or journalistic information, whereas the form of expression thereof is protected, 10)A wise saying, proverbs, legends, facts, and information for daily use such as calendars and measurement tables.

Q42. How long is the term of protection for economic rights for copyrighted works in Mexico?
A42: The term, in principle, is for the author’s life and 100 years post mortem.

Q43. Is joint and several liability recognized in Mexico?
A43: Yes, joint and several obligations exist in Mexico. If the debts are joint and several, the creditor can fulfill the entire debt to one of the joint and several debtors. However, Article 1985 of the Federal Civil Code (Código Civil Federal) states that if there are multiple debtors without solidarity, the debt will be divided according to the number of debtors, and Article 1988 states that the solidarity shall not be presumed but be arose from the law or the intention of the parties. Thus, it is necessary to agree by a contract etc. in order to make it a joint and several debts.

Q44. I had joint and several liability with another person, and I paid the full amount to the creditor. Can I claim against the other joint and several debtors?
A44: According to Article 1999 of the Federal Civil Code (Código Civil Federal), a joint and several debtors who has paid off the debt has the right to claim other joint and several debtor’s portion against the other joint and several debtors, and unless otherwise agreed, the joint and several debtors are equally liable to each other. Therefore, if you have paid the full amount of the debt, you can claim the amount that exceeds your portion against the other joint and several debtors.

Q45. I was asked to be one of the three co-debtors who owe joint and several liability, but only one of them would receive the benefits, and I had nothing to do with the business related to said transaction. The creditor claimed the payment against me first. In this case, can I tell the creditor to claim against the debtor who will receive the benefits first?
A45: Article 2000 of the Federal Civil Code (Código Civil Federal) states that if the business for which the debt was contracted jointly is of interest to only a part of the joint and several debtors, the said debtor shall be liable for the entire debt to the others. Specifically, first, the creditor should claim against the joint and several debtors who has a stake in, and then against the others. From the point of view of proof, it is better to make and specify in the contract among joint and several debtors that the business for which the debt was contracted is related to some of the joint and several debtors and said debtors are obliged to pay first up.

Q46. What are the requirements for the formation of a guarantee contract in Mexico?
A46: It is an agreement between the guarantor and the creditor that the guarantor will repay the debt in the event that the debtor fails to perform its obligations to the creditor. Unlike in Japan, it is not required the written agreement in order to form a guarantee contract. However, it is better to have a written contract in order to avoid disputes be happened later.

Q47. What can the guarantor claim when the creditor makes a claim against the guarantor without making any claim against the principal debtor?
A47: The guarantor can assert the defense of the demand “beneficio de orden”and the beneficial excuse “beneficio e escusión” to the creditor. The defense of demand is the claim that the payment must be made to the main debtor before the claim is made to the guarantor. The beneficial excuse is one that appropriates the asset of the principal debtor to the payment of the debt, and the guarantor will pay only for the deficiency.

Q48. In what cases can’t the guarantor assert the beneficial excuse “beneficio de excusión”?
A48: (i) when the guarantor has expressly waived it, (ii) in the case the main debtor is proven to be bankrupt or insolvent, (iii) when the debtor cannot be sued in court in Mexico, (iv) when the guarantor himself does the business which is subjected the guarantee, or (v) when the main debtor's whereabouts are unknown and the debtor does not appear when summoned and there are no assets be able to seizure at the place where the obligation is to be performed.

【Q & A on Mexican law revision】

Q1: What is the trend of Mexican law revisions?
A1: It is said that Mexico is undergoing frequent amendments. Looking at recent Mexican legislative revisions, there are many things that can lead to improvements in the business environment, such as revisions to labor laws and revisions to the digitization of administrative procedures. However, for example, a constitutional amendment was made in 2016 as a means of resolving labor disputes, but there are also problems such as the fact that the rules at the working level have not been established and the implementation is delayed, so it is important to understand the situation.

Q2: Are there any future legal revisions?
A2: As Lopez Obrador took office in 2018, it is drawing attention that many legal changes will be made. In particular, the Labor Law and Tax Law are attracting attention as they may be revised significantly.

Q3. I heard that taxation of Value Added Tax on foreign corporations begins. What does that mean?
A3: Due to the revision of the Value Added Tax Law (Ley del Impuesto al Valor Agregado) published in the Official Gazette on December 9, 2019, the digital services consumed in Mexico provided from overseas (De la prestación de servicios digitales por residentes en el extranjero sin establecimiento en México) shall be subject to tax filing, though it had not been taxed before. CFDI issuance and quarterly declarations are required for such transactions, and the applicable Articles 1-A, 16 and Chapter III-BIS were enforced on June 1, 2020.

Q4. When the USMCA (T-MEC) came into effect on July 1, 2020, Were Mexican laws revised?
A4; USMCA (T-MEC) contains such as small and medium enterprise development, anti-corruption, environmental protection, and labor rights protection that did not included in NAFTA. The revision of federal labor law in 2019 was also affected by it. In addition, most recently, on July 1, 2020, the Federal Industrial Property Protection Law (Federal de Protección a la Propiedad Industrial), the Quality Infrastructure Law (Ley de Infraestructura de la Calidad), and the Law of General Tax on Imports and Exports (Ley de los Impuestos Generales de Importación y de Exportación) and amendments to the Federal Criminal Act (Código Penal Federal), the Federal Copyright Act (Ley Federal del Derecho de Autor) and the Customs Law (Ley Aduanera) have been made known to the public.

Q5. I heard that the regulation on food labeling has changed. What kind of revision will it have?
A5: In the Official Gazette dated March 27, 2020, a ministerial ordinance was announced to amend the official Mexican standard NOM-051-SCFI/SSA1-2010 regarding general labeling specifications for food and beverage and health information. This amendment allows consumers to specify the content of nutrients that may harm their health by overdose of sugars, saturated fatty acids, trans fatty acids, sodium, calories, etc. The labeling is changed to encourage to find it, and it is applied to foods and beverages (excluding alcoholic beverages) manufactured domestically and internationally sold to consumers in Mexico. It is planned to be introduced gradually from October 1, 2020, and even for foods that are subject to application, until November 30, 2020, it is allowed to sell such products that comply with the former NOM-051 standard.

Q6. It is said that the import duty on electric vehicles has been abolished. Is that true?
A6: In the Official Gazette dated September 3, 2020, the tariff (Tarifa de la Ley de los Impuestos Generales de Importación y de Exportación) was changed and came into effect on the following day. As a result, the tariff classification code for automobiles (buses, passenger cars, trucks) has been newly established or changed to subdivide whether it is an electric vehicle or not, and whether it is a new car or a used car, and the import tariff rate for each is set. Please note that only new electric vehicles will be subject to measures to reduce the general tariff rate to 0% for a limited time until September 30, 2024, so it is not completely abolished.

Q7. I heard that the Act on Intellectual Property Rights has been amended. What kind of amendment is it?
A7: It is a complete amendment that the Federal Industrial Property Protection Law (Ley Federal de Protección a la Propiedad Industrial) will be enacted in place of the existing Industrial Property Law (Ley de la Propiedad Industrial). Enforcement is November 5, 2020. The main revisions are as follows.
(1) Change of trademark right duration and start date
The term of trademark right, which was previously 10 years from the filing date of trademark registration, has been changed to 10 years from the registration date of the trademark.
(2) Adoption of partial cancellation of trademark rights
Partial cancellation of non-use parts will be permitted in trials for cancellation of non-use of trademark rights and trials for invalidation. This applies to trademarks filed, registered or renewed under the new law.
(3) Trademark registration opposition and invalidation opposition based on the same allegation and evidence cannot be used together
It has been stipulated that a trademark for which a trademark registration opposition has been filed cannot be filed for invalidation based on the same allegations and evidence.
(4) Change in the duration of utility model rights
The term of utility model rights was 10 years from the filing date in the previous law, but it has been extended to 15 years from the filing date. Even if the utility model right was registered before the new law comes into effect, it is possible to maintain the right for up to 15 years by paying the corresponding fees.
(5) Active introduction of settlement in infringement proceedings
Although there have been provisions to strive for reconciliation, this amendment provides for specific reconciliation procedures. The parties may offer a settlement at any time before the judgment is issued.
The proceedings currently in dispute will be based on the previous law even after the new law comes into effect.

Q8. What are the regulations on subcontract under the amendments to the Federal Labor Law made in April 2021?
A8: In principle, the subcontract by natural or legal persons to use their own workers for the benefit of others is prohibited. The subcontract for specialized services or a work that is not included in the corporate purpose or predominant economic activity of the client company is allowed if the contractor is registered with the Ministry of Labor and Social Security. In addition, the subcontract for complementary or shared services operated among group companies is also permitted if such services and works are not included in the corporate purpose or predominant economic activities of the client company.