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Trends in foreign direct investment to Mexico and global flows

Mexico‘s Ministry of Economy released information on the trend of foreign direct investment (FDI) to Mexico and global flows of this type of investment.

On the one hand, global FDI flows amounted to 1 trillion 582 billion dollars in 2021, representing an increase of 64% year-on-year.

Flows recovered significantly in all regions.

On the other hand, Mexico received 2.0% of total FDI flows on the planet during 2021, which allowed it to rank 10th.

In Mexico, the formulation and implementation of trade policy continues to be the responsibility of the Ministry of Economy. It collaborates with other Ministries to develop a comprehensive policy of trade openness and promotion and attraction of foreign investment.

Above all, the Ministry of Economy collaborates with the Ministries of Foreign Affairs (SRE), Finance and Public Credit (SHCP) and Agriculture and Rural Development (SADER), as well as with the Ministries of Environment and Natural Resources (SEMARNAT), Energy (SENER), Tourism, Health (SSA) and Defense (SEDENA).

Local governments and stakeholders are also consulted in the formulation of trade policy.

Foreign direct investment

Mexico grants national treatment to foreign investment. Accordingly, foreigners may acquire fixed assets, operate in new fields of economic activity or manufacture new product lines, open and operate establishments and expand or relocate existing ones.

In addition, in principle, they may participate “in any proportion”, i.e. up to 100%, in the capital stock of Mexican companies.

However, Mexico still imposes limits on FDI in certain activities or companies.

In 2017, the limit increased from 25% to 49% for air transportation: domestic, international air cab and specialized.

Also, under air services agreements negotiated by Mexico, Mexican airlines providing international service must be controlled by Mexicans (i.e., Mexicans must own 51% of the capital).

In broadcasting, the LIE allows FDI up to a maximum of 49%, provided that there is reciprocity with the country or territory where the investor or the economic operator that directly or indirectly controls the investor is incorporated.

To be taken into account: FDI is that investment whose purpose is to create a lasting interest and for long-term economic or business purposes by a foreign investor in the host country.

 

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