I Introduction

In recent decades, Mexico has experienced improved growth in trade, investments and productivity and, as a member of the Organisation for Economic Co-operation and Development (OECD) and the World Trade Organization, has become a champion of free trade, with a considerable network of tax treaties, which has given rise to a large amount of wealth being created. Unfortunately, however, this wealth is amassed in a small percentage of the population. The country has one of the highest rates of inequality in the world and certainly faces challenges in the future to achieving inclusive and sustained growth for all its citizens.

Over the past 18 months, certain events have created both opportunities and obstacles with regard to private investments in Mexico, such as the renegotiation of the North America Free Trade Agreement (NAFTA), the US tax reform and this year's presidential election, which culminated in a landslide victory for Andrés Manuel López Obrador, whose new administration will take power in December 2018.

Further, in 2017, Mexico registered 11.1 per cent more foreign direct investment (FDI) than the preliminary figure for the same period for 2016,2 and from January to March 2018, registered 19.1 per cent more for FDI – higher than the preliminary figure for the same period of 2017.3 This demonstrates that foreign investors are increasingly interested in Mexican business, mostly in the manufacturing sector.4 Moreover, the Mexican economy is expected to grow by approximately 2 per cent in 2018 and by over 2 per cent in 2019.

With respect to NAFTA, as of late March 2018, seven rounds of negotiations have taken place and more than 30 issues are being discussed. Nonetheless, the current dynamic of the negotiating positions may still drive the negotiations towards a breakdown with respect to increasing requirements for regional and country-specific rules of origin; expanding national preferences in government procurement; weakening investor-state dispute settlements, trade remedies and dispute resolution regimes; and, perhaps most importantly, subjecting the agreement itself to a mandatory periodic sunset provision in the absence of new negotiations. The potential changes to and repeal of NAFTA would have far-reaching effects with regard to Mexico's future investments.

Another development with significant implications in Mexico is the US tax reform, approved on December 2017, which reduces business tax rates and substantially modifies the US international tax system. As a result, the reforms will have important consequences for companies and markets in Mexico, including the taxation of US corporations' foreign subsidiaries.

Another relevant aspect that all investors must consider in the global tax environment is the undergoing legal modifications that were triggered by of the Base Erosion and Profit Shifting (BEPS) Action Plan set forth by the OECD. BEPS actions are focused on information transparency and avoid the undue use of treaties, which reflects a minimum standard to combat 'treaty shopping'.

As a member of the OECD, Mexico has been actively involved in the design and development of BEPS, and began implementing many of the following recommended actions in 2014:

  1. anti-hybrid rules (Action 2);
  2. a form of mandatory disclosure requirement for taxpayers (Form 76) (Action 12);
  3. an obligation for taxpayers to present a country-by-country report, master file and local file (Action 13); and
  4. new OECD Transfer Pricing Guidelines (Actions 8–10).

Mexico is a signatory party to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, under which Mexico elected to supplement the principal purpose test with a simplified limitation on benefits provision.

Further, Mexico has broadened the scope of exchange of tax information under the Common Reporting Standard (CRS), with currently 90 active automatic exchanges relationships with other countries, as well as the Foreign Account Tax Compliance Act with the United States.

Related to the above, it is also worth mentioning that in 2017 Mexico attracted nearly 345.447 billion Mexican pesos in investments into the country through a tax repatriation plan. The repatriation programme was applicable to capital and resources held abroad either directly or indirectly by Mexican taxpayers. In the near future, we expect certain transactions carried out through this repatriation programme to be audited by the Mexican tax authorities, such as those where the repatriated funds were used to increase equity in a Mexican entity and the entity dispersed abroad.

Finally, on 1 July 2018, the presidential elections in Mexico took place. It is important to emphasise that this election was of great significance, since it will bring about a change of administration. The new administration will bring changes to various areas of the Mexican economy, which may bring new business opportunities for investors, but also new rules that will have to be reviewed to better capitalise on the opportunities in the new political environment. The principal proposals with regard to fiscal policy comprise a boost in public investments and social programmes, a federal austerity programe, tax cuts and increased spending on public projects, and reducing income and payroll taxes. Many of these proposals would need to increase federal revenues and the federal government's budget.

II TAX

Mexico has a residence-based system under which, if an individual resides in Mexico for tax purposes, he or she is subject to taxation over his or her worldwide income. An individual is a Mexican tax resident if he or she settles his or her habitual abode in Mexico. If an individual has a home in Mexico and another country, the centre of vital interests is the factor that determines the tax residence in Mexico. Mexican nationals are presumed tax resident in Mexico.

Income tax liability is the income obtained by the taxpayer during a fiscal year (which coincides with the annual calendar). Mexican law does not provide a general definition of 'income'; however, in the context of the Income Tax Law, Mexican courts have defined it as a 'positive modification registered in the patrimony of a person that is susceptible of pecuniary valuation'. Individuals are taxed on income received in cash, in kind, in credit or in services.

Individuals can apply certain personal deductions (education costs, charity donations, medical and dental) and most personal deductions are limited to 15 per cent of the yearly taxable income.

Personal income tax rates are progressive up to 35 per cent. Individuals with business activities or professional income are subject to income tax at the rate of 30 per cent and may deduct normal business expenses according to entities rules. In most cases, a tax return has to be filed by the end of April in the following year.

Non-resident individuals are taxed only with respect to income sourced in Mexico with varying terms and conditions depending on the type of income. The tax rate varies between 5 per cent and 40 per cent. Double taxation agreements apply by reducing the taxable rates or even producing a non-taxable event.

The principal type of taxable income for individuals (residents in Mexico and non-residents) are the following.

i Sale of shares

Mexican-resident individuals are taxed over the sale of goods, including shares issued by foreign entities. To assert the tax base, individuals are allowed to perform certain deductions. For such purposes, Mexican-resident taxpayers will be able to deduct, among others, the updated amount of the acquisition cost of the shares, commissions and certain considerations paid to intermediaries, and some other taxes or duties paid.

With respect to foreign individuals, the sale of the shares will trigger a tax of 25 per cent on the net income, or 35 per cent on the gross amount, if the non-resident appoints a representative in Mexico. A tax return must be filed in conjunction with an auditor's opinion obtained from a Mexican public accountant certifying that the reported gain was correctly determined.

Income deriving from the sale of securities or publicly traded shares is subject to a 10 per cent tax on the gain (foreigners are subject to a 10 per cent withholding tax on the gain).

ii Dividend distributions

Resident individuals must include the dividends received from Mexican corporations (grossed-up for the corporate income tax paid by the corporation) in their individual income tax returns and are able to claim the underlying corporate income tax paid as a credit against their personal tax liability.

Moreover, with respect to dividends paid from profits that were generated by the distributing entity after 2013, an additional 10 per cent tax on the net dividend will be withheld by the Mexican company. This tax is in addition to the tax paid with the annual tax return, and it cannot be credited. In the case of dividends paid to foreigners, the dividend amount will also be subject to this 10 per cent withholding rate.

Double taxation agreements, in certain cases, grant preferential withholding rates upon any profit or dividend distribution sourced in Mexico (reducing it by up to 5 per cent).

iii Interest income

Interest earned in accounts held in Mexican banks is subject to withholding tax and should be reported in the annual tax return.

Interest on bank accounts, bonds and other debt obligations issued by non-residents is fully taxable, and the taxable interest includes adjustments for inflationary losses and exchange gains and losses with respect to the principal.

Interest paid to a non-resident is subject to withholding tax at rates ranging from 4.9 per cent to 35 per cent and 40 per cent.

iv Real estate

Income deriving from the sale of real estate is taxable for income tax purposes considering the seller's gains (tax basis with recognition of the inflationary effect).

With respect to the acquirer, a local tax of approximately 2 to 6 per cent is applicable on the commercial or transaction value (whichever is greater).

If the real property is acquired as a gift or at under 10 per cent of the appraisal value, income tax will also be triggered by the acquirer.

With respect to foreign individuals, the sale of the real estate will trigger a tax of 25 per cent on the net income or 35 per cent on the gross amount if the non-resident appoints a representative in Mexico.

v Inheritance and gift taxes

There is no specific inheritance, estate or gift tax in Mexico. Inheritance and gifts are treated as income under the income tax law, but they may be exempted as long as certain requisites are complied with.

Income received by Mexican tax resident individuals from inheritance and donations (when applicable) in a given tax year, must be reported to the tax authorities in their annual tax return. Income received by resident individuals from donations shall be reported to the tax authorities when all donations (including prizes and loans) received in a tax year exceed 600,000 Mexican pesos.

Income received as a result of a gift from a spouse, lineal ancestors or lineal descendants is also exempt. However, gifts between siblings are not exempt, and gifts to parents are not exempt if the asset is later given or sold to a sibling of the original owner.

Other gifts are tax exempt, provided the gift does not exceed 88,209 pesos. Any portion of the gift exceeding this amount would be subject to income tax.

vi Taxpayers subject to the preferential tax regime

Mexican tax residents will be subject to the preferential tax regime rules regarding income generated directly or indirectly through foreign legal entities or figures, including those considered transparent (i.e., flow-through for tax purposes), in which they participate directly or indirectly, in the proportion of their participation in the capital of such legal entities or figures.

Income subject to the preferential tax regime is subject to taxation in Mexico in the fiscal year that such income is generated abroad, even if the income, dividends or profits have not yet been distributed by the entity or figure in which the Mexican taxpayer directly or indirectly participates.

Taxpayers must file in February of each fiscal year an informative tax return regarding income subject to the preferential tax regime directly or indirectly; income generated in the previous tax year; income generated in blacklisted countries; and transactions carried out through tax-transparent foreign legal entities or figures.

There are several exceptions to this regime, especially regarding the absence of effective control on the foreign legal entity or legal figure. See Section IV.

III Succession

Succession is a part of civil law that, for purposes of Mexican legislation, is regulated in the federal and local civil codes. Mexico has 32 federal states or entities, including the capital, Mexico City. The federal and local civil codes have mostly the same regulations but there may be specific conditions that differ among them.

The Federal Constitution establishes that the powers not expressly granted to the Federation are understood to be reserved to the states. Therefore, since succession is not a federal matter, depending on the state where the succession takes place, their local civil code will be the applicable one.

The transfer of an estate could take place by operation of a will (which will determine to whom and how the decedent patrimony will be divided) or in the absence of a will, through a set of specific rules contained in the local state-applicable civil code, which will determine who is entitled to receive assets and how the assets of the successor will be transferred. In an intestate succession, the descendants, ascendants, collateral relatives, spouses and concubines have the right to inherit.5 Heirs can resign their inheritance rights. The probate process in Mexico is carried out before a Mexican notary or a judge.6 Further, there are specific non-probate rules for certain assets, such as bank accounts with a beneficiary.

The administration of an estate of inheritance commences with the death of the decedent according to the testament given before a notary public, as an intestate or legitimate succession when there is no testament, or where the testament that was granted is invalid; the testator did not dispose of all the assets; or there is no heir (because of death, repudiation or a condition that is not fulfilled).

Upon the death of the successor, the administration of the estate will be managed by an executor, who is appointed by the decedent in its will or named by a majority of the heirs if there is an intestate procedure. An heir could also be designed or appointed as executor. The executor needs to accept his or her duty or resign. The executor will perform an inventory of the assets, pay debtors of the estate and proceed with a partition and distribution of the assets.

A will made in a foreign country could have legal effects in Mexico City or other states when made according to the laws of the country in which it was granted and if it is not considered invalid under Mexican legislation.

A foreign person may inherit in Mexico. In this scenario, the inheritor must comply with certain Mexican rules. In this regard, generally, foreigners can acquire real estate (including through inheritance) in Mexico if they agree to consider themselves as nationals with respect to said property and not to invoke the protection of their governments.

In relation to the above, the Mexican Foreign Investment Law regulates how and in which cases foreigners can acquire real estate. Foreigners, individuals and legal entities can acquire real estate if they are located outside a restricted zone (100 kilometres from borders and 50 kilometres from beaches).There are special requirements that must be fulfilled. The acquisition of other kinds of assets besides real estate and shares is not prohibited or restricted.

With respect to prenuptial agreements and their effects on personal property and transfer of such under a will or intestate succession, a couple may enter into a prenuptial agreement before the wedding to constitute the patrimonial regime of their marriage (joint property, separated property or a mixed regime) and to regulate the administration of the assets. However, this agreement does not grant inheritance rights and it is not commonly executed.

As for the tax effects that derive from a succession, these can generally be divided between those applicable to the estate before it is divided and awarded to the corresponding heirs, and those applicable for the acquisition of the assets.

The executor will be the one responsible (being also jointly liable) for the calculation of the taxes generated under the estate probation and filing of the tax returns.

Currently, there is no inheritance tax applicable in Mexico. For income tax purposes, any transmission of assets made via a succession is exempt so long as the acquisition is reported in the annual tax return corresponding to the year when the assets are adjudicated to the heir. Life insurance payments are tax free if the insurance company is a Mexican insurer. There is a carry-over basis where the heir will also 'inherit' the tax basis of the transferor (normally the cost of acquisition).

In recent years, there have been certain proposals for enacting changes to the tax laws to create an inheritance tax. Although such proposals were rejected in the Mexican Congress, recently the OECD recommended that Mexico adopts a tax on inheritances,7 a recommendation that might be picked up by the new administration when it enters into office in December 2018, and may be part of a near-future tax-reform proposal.

The acquisition via a succession of real estate is taxed with a local tax that ranges from 2 per cent to 6 per cent and the basis for the tax is normally considered to be the appraisal value of the asset to be transferred.

Foreigners acquiring real estate or shares of Mexican entities will also be taxed at the rate of 25 per cent on the fair market value (appraisal) without being able to credit or deduct a cost basis.

IV Wealth Structuring and Regulation

i Investments made by Mexican tax residents in Mexican structures

One of the most common structures is the use of a fideicomiso (a Mexican trust), which is a commercial agreement governed by Mexico's general law of credit instruments and operations.

A Mexican trust normally consists of three parties: the trustor or settlor, the trustee and the beneficiary, although the beneficiary is not required in some trusts. The trustor or settlor can either be an individual or an entity and is the party that usually transfers title or management of certain assets, rights and benefits to the trustee, who holds them in the trust.

The trustee is the party who holds the assets in the trust, and the party that is given the responsibility of performing and complying with the specific purposes and goals of the trust. The beneficiary, although often named, is not a party that appears in all trusts. The beneficiary of the trust is the party that stands to benefit from the assets and trust, whether by using and enjoying the assets, by having privileges or special rights to the assets, such as a security interest, or by receiving income from the assets.

The trustee must always be a Mexican bank or financial entity, and it must act in accordance with the trust's purpose.

Mexican trusts are always created for specific purposes, and trustees are bound and limited to act in accordance with such purposes. However, in practice, trustees usually take a passive role during most of the trust's life, further allowing management and other duties to be taken by the beneficiary or other third parties.

By law, trusts are considered irrevocable, unless otherwise provided in the trust itself, and also by law, trusts can also hold most types of properties and rights.

When properties and rights are transferred to the trust, the trustor may 'hold back' or 'reserve' for itself, certain portions of a particular asset, or only do so under a partial or limited assignment. This means the trustor may also keep and maintain for himself or herself, certain rights over the assets held in trust.

Trusts must be in writing and prepared (or amended) following the same formalities required for the transfer of the properties that will be subject to the trust. For instance, if the property to be transferred to the trust is real property, then the trust must be created with the same requirements as when real property is transferred in Mexico. That includes the formalisation of the trust in a public deed in front of a Mexican notary public.

Trusts are normally created for a specific period of time and cannot exceed 50 years, except under certain specific cases where this term may be exceeded.

The trust can be framed under two different fiscal effects, depending on the operation carried out in the trust: if the assets affected by the trust are transferred in ownership, all the effects inherent to property transfer would be presented; however, if the patrimony affected by the trust is commercial activities, the effects inherent to the performance of business activities would be presented.

No sale is deemed for tax purposes when asset contributions are made to a trust and the settlor reserves the right to reacquire such assets. The income tax is triggered when such reacquisition right is lost or when a third party is the beneficiary of the trust.

The property transfer tax is triggered in real estate transactions in Mexico.

If the Mexican trust carries out commercial activities (receiving active income, namely income from sales) it will be considered as an entrepreneurial trust for Mexican tax purposes. In this scenario, the Mexican trust will determine the taxable profit and such will be allocated to the beneficiaries. Losses are not allocated to the beneficiaries (they remain in the trust and can be offset only against profits derived from the trust activities).

ii Insurance as an investment vehicle

Other forms of wealth structuring have included the usage of insurances (survival or with some savings component) on a stand-alone basis or combined with other structures (such as foreign trusts).

Payments obtained by Mexican tax residents derived from insurance agreements could be considered as tax-exempt income as long as the following requirements are fulfilled:

  1. Survival insurance: when the risk covered by the insurance is the survival of the insured person, the payments will be considered tax-exempt income provided they are paid when the insured person reaches 65 years of age and at least five years have passed since the insurance was contracted.
  2. Life insurance paid by individual: if life insurance was not paid directly by the employer for its employees, the payments will be considered tax-exempt income as long as the risk covered is the death, disability, loss of limb or incapability of the insured individual to perform a remunerated personal job in terms of social welfare provisions.
  3. Retirement and healthcare insurance: payments derived from departure, pension or retirement insurance, as well as healthcare expense insurance, may be considered as partially tax exempt as long as certain specific requirement are met.

The aforementioned exemptions are only applicable if the amounts are paid by an insurance company that is incorporated in terms of Mexican law; payments or income obtained from foreign insurers are not considered exempted.

iii Investments made by Mexican tax residents in foreign structures

It is customary for Mexican individuals to set up structures abroad using certain types of entities or legal figures for inheritance, confidential and tax-deferral purposes.

In these cases, Mexican tax residents could be targeted with certain anti-deferral tax rules (a preferential tax regime) when they generate income directly or indirectly through foreign legal figures (such as a trust) or entities (such as limited liability companies) and as long as said income is not taxed abroad or the income is not effectively taxed by at least 75 per cent of the Mexican tax rate. For such purposes, this special regime considers as income all passive income (including certain types of services, charters, etc.).

Income obtained directly or indirectly through transparent foreign legal entities or legal figures would also trigger this special regime.

For these purposes, a legal figure or entity is consider to be transparent when two conditions are met: when it is not considered as a taxpayer in the country in which it is incorporated or in which its main administration is established; and when its income is attributed to its members, partners, shareholders or beneficiaries.

The consequence of being targeted with this special regime is that the income generated in the investment vehicle is subject to taxation in Mexico in the tax year in which it is generated; the income is taxable irrespective of whether it is received by the Mexican individual as it is the anticipation of an accrual.

There are certain exceptions to this special regime, and the one that is most commonly encountered within this type of structure is the lack of control over the vehicle or over its management such that the Mexican investor cannot decide when the income, profits or dividends are to be paid out.

It is important to note that the Mexican investor is considered, by operation of law, to have control over the investment vehicle; therefore, the individual has the burden of proof and will be required to gather and maintain sufficient evidence to demonstrate that no control exists.

Similarly, Mexican taxpayers must file an informative tax return with the Mexican tax authorities regarding:

  1. income that is subject to the aforementioned special regime;
  2. income generated in countries listed under the Mexican Income Tax Law, which are considered to be tax havens (blacklisted territories); and
  3. transactions carried out through foreign transparent tax structures or entities.

With respect to the tax return described in (a), this obligation is not present where the taxpayer does not have effective control of the vehicle or the vehicle's management, which includes the authority to control the timing of distribution of income, profits or dividends, whether directly or through third parties.

With respect to the informative return mentioned in (c) (transactions carried out through foreign transparent tax legal structures or entities), this obligation was not historically present in those cases where the foreign transparent tax structure was created in a country which Mexico had an ample exchange-of-information mechanism. However, this exception was contained in a certain administrative rule that was eliminated on 14 August 2016.

From the above, the inclusion of certain transparent entities or figures (such as some trusts) will trigger the obligation to report the structure even if there is no control over the moment or timing to distribute income. Thus, a careful review should take place for any structure that has these types of entities or figures.

If there is a noncompliance with the filing of the above-described informative returns, this may be considered a tax crime.

iv Investments made in Mexico by foreign investors

Wealth tax structures for foreigners would vary depending on the type of investment and also how the individuals have accommodated their structure abroad. Normally, it is common to have investments that derive interest, dividends, capital gains and real estate, of which tax effects are discussed in Section IV.iii.

Nevertheless, it is worth mentioning that several foreign structures put into place in Mexico with respect to private capital (normally related to investments in real estate) is the usage of transparent figures, which are considered for Mexican tax purposes as flow-through entities. It is customary to encounter the usage of partnership agreements (generally from provinces in Canada).

As mentioned, for Mexican tax purposes, the partnership will be viewed as a transparent figure, and all the income received from a Mexican taxable source will be considered received by the members of the partnership, even granting, in the case of foreigners, the benefits of double taxation conventions (if the member of the partnership qualifies).

This transparency treatment is recognised owing to civil law recognition of the non-legal separate personality of the partnership from its members, irrespective of the tax treatment in the country of origin or creation of the partnership. Unfortunately, this eliminates structuring using entities that have a separate legal personality.

v Anti-money laundering and other applicable regulations

The anti-money laundering regime is fairly new in Mexico, having been introduced in 2014; however, despite this, the financial sector and others who have been especially vulnerable to the negative effects of money laundering have strongly supported its implementation.

Mexican anti-money laundering operates through a legal system that forces financial institutions and persons involved in vulnerable transactions to identify and monitor their clients to prevent, detect and report money laundering (specific transactions include real estate acquisitions, loans not granted by the banking system, lending of real estate, acquisition of jewellery, gambling and other customary activities that are identified with money laundering).

On 14 June 2018, a Decree was published in the Federal Official Gazette that reforms the General Corporations Law. The Decree will enter into force on 15 December 2018. The amendment imposes on limited liability companies and business corporations the obligation to inform the Ministry of Economy of any change in the structure of their capital stock. These reforms promote the report and exchange of information between authorities with the purpose of fighting against money laundering by taxpayers.

These changes will have an effect in terms of the enforcement of the Anti-Money Laundering Law (Federal Law for the Prevention and Identification of Operations with Illegal Assets), since, through the aforementioned report and exchange of information, authorities may now verify the accuracy of the data collected to see if any vulnerable activity is being carried out.

Also, in recent months, tax authorities (which are the authorities with the power to review and impose penalties related to the compliance of anti-money laundering regulations) have been issuing fines to a considerable number of individuals and corporations who did not identify clients who carried out vulnerable activities or who did not present the corresponding information required by the Anti-Money Laundering Law.

V Outlook and Conclusions

The current investment and wealth management climate cannot be disassociated from international efforts towards transparency and avoidance of double non-taxation agreements and implemented mainly and, among others, by the OECD with its BEPS project and the CRS platform.

Today, the automatic exchange of information is a reality that the tax authorities around the world have embraced. This situation implies that wealth structuring cannot rely on having the objective of 'catch me if you can' or secrecy. It is required to be fully compliant with the tax laws of multiple jurisdictions, to pass the test of substance and also to be aware that a high number of compliance or informative returns (not just tax returns) must be taken into account. The wealth management world has changed.

Mexico has been a part of this change and it is likely that there will be a higher focus on reviewing wealth structuring by the Mexican tax authorities. Tax enforcement will be facilitated through collaboration with other countries, and the amount of information that the Mexican tax authorities might have about a particular individual or transaction will be remarkable. Structures that in the past were non-compliant where they relied purely on confidentiality will be tackled and fought by the tax authorities with all the new tools available.

These changes have led, in some part, to the high amount of revenue collected by the 2017 repatriation programme, successfully implemented by the Mexican tax authorities. Even now, some audits are beginning to review whether the compliance of the requisites set forth in such programme were observed by the taxpayer. Also, certain public leaks related to investments in locations regarded as secret offshore tax havens have piled pressure on the tax authorities to increment their reviews on Mexican high net worth individuals on compliance and the need to increment public awareness about compliance, as well as the possibility of voluntary disclosure and regularisation. Further, the outcome of the NAFTA renegotiations and understanding the international effects of the US tax reform may also have repercussions with regard to current structures of high net worth individuals.

Finally, the most profound element of change will come about through the new administration, which will take office in December 2018. This new presidency, with potential control over both the House of Representatives and the Senate, could with further alliances gain the power to amend the Constitution, implementing programmes that will increase social spending, which will have to be funded in some part through an increase of tax revenues.

From the above, we can expect, in the future, a larger amount of tax enforcement actions, rather than a change of tax policies or modifications to the current tax legal framework. This is a situation to take into account, whether with the current wealth structures or those to be implemented in the future.


Footnotes

1 Edgar Klee Müdespacher is a partner and Joel González Lopez is an associate at Haynes and Boone, SC.

2 FDI for 2016 (US$26,738.6 million). FDI for 2017 (US$29,695 million).

3 FDI for January to March 2018 (USUS$9,502.4 million). Same period for 2017 (US$7,945.6 million).

4 35.2 per cent of the FDI in 2018 came from the manufacturing sector.

5 Currently, most states allow same-sex marriages (including Mexico City). The Supreme Court declared, in a binding precedent, that the state laws that prohibit marriage between persons of the same sex are unconstitutional for being discriminatory. Therefore, in all the states of Mexico, same-sex marriages could be carried out. On the other hand, for unmarried couples that have lived together in a constant and permanent way for a minimum period of two years or have a child in common, there is a special figure named concubinage. These couples have the right to reciprocally inherit from one another as if they were spouses (in the event of an intestate succession). The Supreme Court declared, in non-binding precedents, that the concubinage is considered for same or different sex couples in accordance with the same reasons that allow the same-sex marriage (non-discriminatory principles).

6 On 23 July 2012, the last significant amendment made to the Mexico City's Civil Code relating to succession was published, in which the different types of testaments that could be granted were eliminated (public, private, hand written, military and maritime), with the only one remaining as valid being that made before a notary public.

7 S Araújo, B Brys and K Killmeier (2018), 'Strengthening Mexico's fiscal policy', in Getting it Right: Strategic Priorities for Mexico, OECD Publishing, Paris, https://doi.org/10.1787/9789264292062-3-en.