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Top 5 states that attract the most FDI in Mexico

Mexico City, Nuevo León, Jalisco, Chihuahua and Guanajuato were ranked as the top states that attracted the most Foreign Direct Investment (FDI) from January to September 2022 in Mexico.

By far, the ranking is headed by Mexico City, with a 32% share, followed by Nuevo León (8.7%), Jalisco (7.5%), Chihuahua (5.2%) and Guanajuato (5.2 percent).

In the first nine months of the current year, Mexico captured 32,147.4 million dollars of FDI, 29.5% more, at an inter-annual rate.

According to the Organization for Economic Co-operation and Development (OECD), FDI is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest and a significant degree of influence over a company resident in another economy.

In general, FDI is an important channel for technology transfer between countries, promotes international trade through access to foreign markets and can be an important vehicle for economic development.

Some activities in Mexico are reserved to the State and, according to the Constitution, these activities are not considered monopolies (Article 28).

Main states

The State is also the owner of salt and mineral deposits, whose exploration and exploitation require a concession.

To obtain a concession, foreigners must establish themselves in Mexico and sign an agreement with the Secretaría de Relaciones Exteriores (SRE) whereby they agree to be considered as nationals and waive the diplomatic protection of their country of origin (“Calvo Clause”); in the event of a dispute with the Mexican State, it can be resolved only in Mexican courts.

In the restricted zone (100 km from the border and 50 km from the beach), no concessions are granted to foreigners.

Also, only Mexicans (individuals or legal entities) may provide development banking and domestic land transportation services, as well as certain professional services.

Foreigners may not provide these services, nor may they participate, directly or indirectly, as partners or shareholders, in Mexican companies that provide these services.

However, while domestic land transportation services are reserved to Mexicans, foreigners may provide courier and parcel services.

In the sectors and activities in which foreigners may participate, foreign investment must be registered in the National Registry of Foreign Investment (Registro Nacional de Inversiones Extranjeras, RNIE), administered by the General Directorate of Foreign Investment (Dirección General de Inversión Extranjera, DGIE) of the Ministry of Economy.

In principle, foreigners do not require prior authorization to invest.

However, in certain cases, they require an authorization from the CNIE to make investments in excess of 49% of the capital stock, and an authorization from the Ministry of Economy and, if applicable, also from the National Banking and Securities Commission (CNBV), to benefit from the neutral investment regime.

 

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