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Mexico’s FDI issues total US $ 1,396 million

The issues of Foreign Direct Investment (FDI) of Mexico totaled US $ 1.396 million dollars in the first quarter of 2021, reported the Bank of Mexico (Banco de México ).

First of all, direct investment is a category of cross-border investment carried out by a resident of an economy (the direct investor) with the objective of establishing a lasting interest in a company (the direct investment company) resident in an economy other than that of the direct investor.

According to an OECD definition, the motivation of the direct investor is to establish a long-term strategic relationship with the direct investment company to ensure a significant level of influence by the investor in the management of the direct investment company.

Furthermore, ownership of at least 10% of the voting power of the direct investment enterprise is considered sufficient evidence of such a “lasting interest”.

In the first quarter of 2020, a year strongly affected by the Covid-19 pandemic, Mexico recorded FDI emissions for 592 million dollars.

FDI 

Regarding the integration process between Banxico and the Ministry of Economy of the figure on FDI, the following is found:

  • The Ministry of Economy constantly collects the financial information of companies that have foreign investment by reviewing the procedures they present before the National Registry of Foreign Investments.
  • The Ministry of Economy shares the results with Banxico and as a result of a joint analysis, in which the same data and the same methodology are used, both institutions determine the preliminary figure with a cutoff to each quarter of the year for publication.
  • FDI data in Mexico is not definitive. If a company did not report investment movements at the time and does so extemporaneously, the Ministry of Economy and Banco de México review the previous figures to reflect those changes, that is why the original and updated figures are not comparable between yes, and it is recommended to contrast original data with original data to reduce the bias attributable to updates.

 

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