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What foreigners can and can’t do in Mexico

When residing in or visiting Mexico as a foreigner, whether or not you have an FM3 or FM2, there are certain important things to keep in mind.

  • Foreigners cannot vote, participate in political activities or demonstrations
  • Foreigners must abide by and are subject to all Mexican laws while in Mexican territory
  • Foreigners may not buy property in restricted zones unless obtained through a trust or a corporation
  • There are restrictions to the type of businesses foreigners can own and operate in Mexico (foreigners cannot  fully own and operate a transportation business, for example), see excerpt below for further detail
  • Foreigners cannot own or operate ejido land
  • A foreigner with an FM3 or other migratory document can and should obtain a Mexican driver’s license if the stay in the country is or will be longer than 6 months at a time
  • A foreigner with an FM3 can work in Mexico if the hiring company sponsors and processes the work permit, companies have a restriction on the number of foreigners they can hire
  • Have economic activities or businesses that involve the exploitation of mines and minerals and waterways as well as other natural resources
  • This is not an exhaustive list, it is important to contact an expert if in doubt or before embarking on a venture

More detail about changes in Mexican foreign ownership law

On 24 December 1996 the Diario Oficial, the official publication of the Mexican Government, published the new amendments to the Mexican Foreign Investment Law, which became effective on 25 December 1996. It was created in order to:

  • Reduce delays in the processing of many government business requirements
  • Promote foreign investment
  • Provide added security to foreign investors investing in Mexico
  • Simplify procedures for investment in Mexico

As a result of the different regulatory requirements of the many states in Mexico, in addition to differences in the operation of national-level regulations, this plays a part in the quality of local business activity. However local governments have been motivated to reform as a result of all the awareness being raised about the ease of doing business.

There are certain industries in Mexico which are limited to ownership by Mexican corporations or citizens only. These include activities involving the production and sale of petroleum and other hydrocarbon products, basic petrochemicals, electricity (including the generation of nuclear energy), telegraph communications, mail processing and delivery, and similar public services. These are all services which the Mexican government have a monopoly on.

Economic activities reserved for Mexicans include the operation of credit unions, retail trade in gasoline and liquid petroleum gas, national surface transportation of passengers, tourism and transportation of freight.

Foreign investment in cooperative companies or production is limited to 10%. Investment in domestic air transportation, air taxi transportation and specialized air transportation generally is limited to 25%. Since the changes made to the Foreign Investment Law, foreign ownership interest is not taken into account if the foreign investment is made in a Mexican corporation and if 51% of the capital of such corporation is held by Mexicans.

Foreign investors may now hold up to 49% in companies in almost all aspects of the Mexican financial system, including commercial banks, credit institutions and securities market specialists.

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