In connection with reporting obligations with the National Registry of Foreign Investments (Registro Nacional de Inversiones Extranjeras) (the “RNIE”), we would like to remind you that next Wednesday, July 14th, 2021, is the deadline to file the quarterly update notice for the second quarter of 2021 (the “Notice”).
In connection with the foregoing, please note that: i) foreign individuals or legal entities that customarily undertake commercial acts within the Mexican Republic (i.e., those that fall under Section I); and ii) Mexican companies with foreign investment in their capital stock (i.e., those that fall under Section II), are required to file the Notice, when:
I. They have had changes in their name, corporate name, tax domicile and economic activity;
II. Regarding foreign individuals or legal entities that fall under Section I, when there are variations that exceed the amount provided by the National Foreign Investment Commission (Comisión Nacional de Inversiones Extranjeras) (the “CNIE”), i.e., amounts over $20’000,000.00 (twenty million pesos 00/100, legal tender in Mexico) approximately USD$1’006,000.00 (one million six thousand dollars 00/100, legal tender in the United States of America) in any of the following accounts:
a) Accounts receivable from foreign residents that are part of the same corporate group.
b) Accounts payable to foreign residents that are part of the same corporate group.
c) Capital contributions from the parent company, capital reserves or results of prior years.
III. Regarding Mexican companies with foreign investment in their capital stock that fall under Section II, when there are variations or modifications that exceed the amount provided by the CNIE, i.e., amounts over $20’000,000.00 (twenty million pesos 00/100, legal tender in Mexico) approximately USD$1’006,000.00 (one million six thousand dollars 00/100, legal tender in the United States of America) in any of the following:
a) The capital stock and/or shareholding structure that imply a change in the participation in the capital stock of foreign individuals or legal entities (1).
b) Accounts receivable from foreign residents that are part of the same corporate group.
c) Accounts payable to foreign residents that are part of the same corporate group.
d) Capital contributions from the parent company, capital reserves or results of prior years (2).
Foreign individuals or entities and Mexican companies with foreign investment, that do not fall under the foregoing events, are not required to file the Notice.
Therefore, we recommend reviewing whether the above-mentioned events are met to determine if the Notice is appropriate and avoid potential penalties. Penalties for non-compliance range from 30 (thirty) to 100 (one hundred) unit of measurement and update (UMA) per day (3).
This alert does not constitute legal advice and is protected under copyright laws.
(1) Mexican companies that list their shares in the stock market and investment funds, must only file amendments to the capital stock and shareholding structure if the participation in the control group or the participation of the operating company is modified, respectively, whether it implies changes in the amount or percentage of participation of foreign investors.
(2) Mexican companies are only required to file variations if foreign investors participate in their shareholding structure. In the event of Mexican companies that list their shares in the stock market and investment funds, they must only file the variations when foreign investors participate in the control group or the operating company, respectively.
(3) The UMA’s value for 2021 is of $89.62 (eighty-nine pesos 62/100, legal tender in Mexico), therefore, the penalties for non-compliance range from $2,688.60 (two thousand six hundred and eighty-eight pesos 60/100, legal tender in Mexico) to $8,962.00 (eight thousand nine hundred and sixty-two pesos 00/100, legal tender in Mexico), approximately from USD$135.00 (one hundred and thirty-five dollars 00/100, legal tender in the United States of America) to USD$450.00 (four hundred and fifty dollars 00/100, legal tender in the United States of America), respectively.
