An outline of Mexico's tax system for corporations and individuals

In 2017 Mexico’s GDP grew by 1.5%. GDP growth of 2.3% is expected in 2018. The latter compares positively against the projected average of Latin America economies, although it is lower than what was expected from the implementation of the structural reforms described below.

Annual inflation rose to 6.77% during 2017, which represented the highest rate recorded in the last 17 years, contributing to higher interest rates. Inflation is projected to approach 3% for 2018.

Tax Environment & Trends

Economic environment: The external environment, including the renegotiation of the North American Free Trade Agreement (NAFTA), higher volatility in global financial markets, the presidential elections taking place in 2018 and annual inflation, has contributed to the recent depreciation of the Mexican peso.

During 2017 a decline in oil revenues to 3.8% of GDP was recorded, reaching a public deficit of 1.1%. The public sector debt balance represented 46.3% of GDP in 2017, 1.9% lower than in 2016.

Structural reforms: A series of reforms, which began in 2013 during President Enrique Peña Nieto’s term, aimed at increasing Mexico’s productivity and competitiveness in areas such as energy, infrastructure, economic competition, telecommunications, finance, labour and tax. Although reforms were expected to spur economic activity through higher consumption by Mexican families, financing for small and medium-sized companies and an increase in foreign investment, not all of the desired results have been achieved.

According to the OECD, the reforms, together with sound macroeconomic policies, have ensured the resilience of the open Mexican economy in the face of challenging global conditions, but have not been sufficiently inclusive so as to achieve better living conditions for many Mexican families. In particular, the OECD observed that disparities between a highly productive modern economy in the north and central areas of the country, and a lower-productivity traditional economy in the south, have increased, presenting challenges related to the prioritisation of public spending toward infrastructure, training, health and poverty reduction.

Foreign direct investment (FDI) reached $29.69m during 2017, which represented an increase of 11.1% with respect to 2016. The last major tax reform took place in 2013 and became effective in 2014. The reform focused on eliminating preferential or special tax treatment which included group tax consolidation and tax incentives for certain industries such as real estate and mining, and limited certain deductions related to fringe benefits granted to employees. Efficiency: Despite the structural reform, tax collection has not reached the level needed to finance public spending. Tax revenues represented 17.22% of GDP during 2016, while the average of all OECD member countries was 34.26% of GDP. Mexico faces a significant challenge in efficiently using the income derived from different sources, namely oil, tax and public entities. In recent decades expense allocation has been considered inefficient, with 75 cents of each collected peso being used for current expenditure rather than investment expenditure. Formalisation in progress: The participation of the informal sector represented 22.6% of GDP during 2016, a continuation of the low trend seen since 2009. Given the size and economic value of the informal sector compared to the formal sector with 56.7% versus 43.3% of workers, respectively, tax collection could increase from both the formalisation and tax registration of businesses that currently operate within the informal economy.

Even though the potential revenue collection from the latter – registration of businesses operating in the informal economy – is low for income tax and value-added tax (VAT) purposes at 0.42% of GDP, Mexico has generated several tax benefits through the Crezcamos juntos (Let’s Grow Together) programme, an initiative that provides Mexican families an incentive to transition their businesses to the formal sector and through the creation of the tax incorporation regime, a simplified tax system for individual taxpayers engaged in business activities.

Ease of Doing Business: According to the “Doing Business 2018” report issued by the World Bank, Mexico is ranked 49th out of 190 countries in relation to the ease of doing business, just above benchmarks for emerging economies such as Chile, Colombia, China, Brazil, Argentina and India. The 10 topics considered in the ranking are: starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Between 2007 and 2017 the Mexican tax authorities took steps to introduce technology-based tools and processes to facilitate taxpayers’ compliance with tax and trade operations obligations.

Business Incorporation

The most commonly used forms of business to incorporate a Mexican company are the variable capital limited liability stock corporation (sociedad anónima, SA) and the non-stock variable capital limited liability corporation (sociedad de responsabilidad limitada, SRL).

For these kinds of companies, the liability of partners and/or shareholders is limited to the full payment of their capital contributions, and the company must be incorporated with a minimum of two partners or shareholders, which can be either corporations or individuals. In an SRL, the capital is divided into equity participations; therefore, evidence of participation as a partner is not based on a stock certificate, and a participation may be transferred only with the approval of the other partner(s). In an SA, the capital stock is divided into shares evidenced by stock certificates, which can be freely transferred pursuant to requirements in company by-laws established by the shareholders. The management of an SRL or SA can be handled by one or more managers or directors, who need not be partners or shareholders of the company.

Business Taxation

The principal taxes affecting companies doing business in Mexico are the federal corporate income tax, the VAT, the excise tax and withholding taxes. Other taxes are levied at the state and municipal levels.

Resident Entities

Resident entities are taxed on worldwide income. Corporate tax is imposed on a company’s taxable income, which is defined as the difference between taxable revenue and expenses, at a rate of 30%. Taxable revenue includes business/trading income, passive income and capital gains. Normal business expenses may be deducted in computing taxable income. Inflationary accounting for tax purposes is applicable to certain types of revenue and expenses.

Although not a tax, mandatory profit-sharing rules require an entity to distribute 10% of taxed profits to its employees no later than May of the year following the year in which the company generated the profits.

Allowable Deductions

Business expenses are deductible if necessary for the taxpayer’s business operations and supported by relevant documentation including invoices.

Certain items are non-deductible, including goodwill; a percentage of fringe benefits provided to employees; entertainment expenses; and other expenses that are not strictly necessary for the business purposes of the company.

Dividends are not deductible by the distributing corporation or included in the gross income of the recipient, although they are included in the income base for calculating profit sharing.

Dividends

Dividends received by a Mexican resident company from another Mexican company are exempt from corporate tax. Dividends received from a foreign company are subject to corporate tax, but a credit for underlying corporate and withholding tax generally is available for foreign tax paid.

If dividends from a Mexican company are not paid from an account holding previously taxed profits (cuenta de utilidad fiscal neta, CUFIN), the payer is required to determine and pay tax on a gross-up basis.

Capital Gains

Mexican entities are not subject to special tax treatment on capital gains, and the use of capital losses is restricted in some cases.

Net Operating Losses

Losses may be carried forward for 10 years, subject to applicable inflation adjustments. The carryback of losses is not permitted.

The use of losses may be limited upon direct or indirect changes in ownership that imply a change in control of the entity, when the revenue of the last three years is less than the loss carryforward adjusted by inflation in the year before the change in control, among other situations.

Foreign Tax Credit

Foreign tax paid may be credited against Mexican tax on the same profits, but the credit is limited to the amount of Mexican tax payable on the foreign income.

Tax Integration Regime

An optional tax integration regime has replaced the tax consolidation regime. Under the tax integration regime, corporate groups may elect to calculate income tax on a consolidated basis. The regime provides certain benefits for the payment of tax when companies have profits or losses in the same year within a corporate group. For tax purposes, a group consists of a Mexican holding company and all of the Mexican subsidiaries in which the holding company holds directly or indirectly more than 80% of the voting shares. Tax may be deferred for a maximum of three years.

Resident Individuals

Taxable income & rates: Mexican nationals are taxed on their worldwide income and in some particular cases, under a separate basket system, but in general, the rule implies that all income categories can be aggregated to determine taxable income. Profits derived from the carrying on of a trade or profession by an individual generally are taxed in the same way as profits derived by a company. Tax rates are progressive, up to 35%.

Capital gains: Capital gains arising from the sale of publicly traded shares, including financial derivatives, are subject to a 10% tax on the gain.

Deductions & allowances: Subject to certain restrictions and caps – the lower of MXN130,000 ($7025) or 15% of taxable income – deductions are granted for medical expenses and medical insurance, retirement annuities and mortgage interest, among other reasons. However, certain medical, dental and hospital expenses, among others, are deductible without restriction. Personal allowances are available to the taxpayer and their spouse, children and dependants.

Non-Resident Individuals

Non-residents with a PE: A permanent establishment (PE) is any place in which business activities are carried on, in whole or in part, within Mexico. A PE includes branches, agencies, offices, factories, installations, mines, quarries, or any other place of exploration or extraction of natural resources. It also includes construction or installation projects, maintenance or assembly activities on real property or related supervisory activities, where such activities last for more than six months.

A PE or branch of a foreign company is taxed in the same way as a Mexican subsidiary on the net income attributable to the PE or branch in Mexico.

Non-residents without a PE: Non-resident entities that do not have a PE in Mexico are taxed only on certain types of Mexican-source income. The Mexican payer generally must withhold tax on the gross payment made to a non-resident entity or individual, although the withholding tax rate may be reduced under an applicable tax treaty.

The withholding tax rates levied on gross income currently are as follows:

Dividends: A company that distributes dividends to a non-resident must withhold a 10% tax, which is considered a final tax. For non-residents, the 10% rate may be reduced under an applicable tax treaty. A company’s CUFIN balances as of December 31, 2013 are not subject to withholding tax when distributed.

The 10% tax may be reduced for dividends paid to individuals resident in Mexico if profits generated in 2014, 2015 and 2016 are reinvested and distributed as from 2017. Interest: Interest paid to a non-resident is subject to withholding tax at rates ranging from 4.9% ( interest paid to a bank) to 35%, unless the rate is reduced under a tax treaty. A 40% rate applies where interest payments are made to a related party located in a tax haven.

Royalties: Royalties paid to a non-resident are subject to a withholding tax of 35% for patents and trademarks, and of 25% for other kinds of royalties, unless the rate is reduced under a tax treaty. A 40% rate applies where royalties are paid to a related party located in a tax haven. Income from the leasing of machinery and equipment is generally considered royalty income.

Technical service fees: Fees paid for technical assistance are subject to a 25% withholding tax, unless the rate is reduced under a tax treaty.

Other: There are certain other circumstances under which withholding tax at various rates may apply to non-residents, such as payments relating to immovable property, salaries, fees, capital gains and others.

Non-Resident Individuals

Non-resident individuals are subject to taxation on income derived from Mexican sources. The Mexican-source income of a non-resident is subject to withholding tax on a gross basis, at the same withholding rates for payments (e.g. dividends, interest and royalties) made to non-resident entities without a PE in Mexico.

Non-residents on temporary assignment for firms or subsidiaries based in Mexico are exempt from income tax on the first MXN125,900 ($6804) of employment income for a period of 12 months; they are taxed at 15% on income from MXN125,901($6804) to MXN1m ($54,040); and at 30% on income in excess of MXN1m($54,040), with no deductions allowed. Non-residents on temporary assignment that are paid by non-resident foreign firms are exempt from income tax if the employee spends less than 183 days (which need not be consecutive) in Mexico in a 12-month period. Otherwise, the employee will be subject to tax.

Anti-Avoidane Rules

Thin capitalisation: Interest payments made by a Mexican resident company on a loan from a non-resident related party are non-deductible for income tax purposes to the extent the debt-to-equity ratio of the payer company exceeds 3:1.

Debts linked to strategic areas, or for the generation of electricity, are excluded from the rules of thin capitalisation. Transfer pricing: Transfer pricing rules and methods are in line with OECD guidelines. Base erosion and profit shifting (BEPS) recommendations apply to both cross-border and domestic transactions. Contemporaneous documentation must be prepared. Advance pricing agreements (APAs) are available. It is mandatory to first test the Comparable Uncontrolled Price method before electing to apply a different one, out of the remaining five methods, as valid in the Mexican Income Tax Law. Controlled foreign companies: Income is attributed to Mexican tax residents, including resident foreigners, from “controlled” entities where more than 20% of their income is passive income – broadly defined – that is taxed locally at a rate less than 75% of Mexico’s statutory rate.

BEPS: The Mexican government has contributed to the development of the OECD BEPS action plan and has actively participated in the work streams. Some of the steps taken by Mexico to implement the BEPS recommendations include the imposition of limitations on deductions for payments made in the form of interest, royalties and technical assistance fees, and to related parties in Mexico and abroad, in situations involving a mismatch; the imposition of conditions for the application of tax treaties for transactions between related parties; and the introduction of transfer pricing documentation requirements – master and local file documentation and country-by-country (CbC) reporting.

Tax returns & compliance: The tax year for both entities and individuals is the calendar year. An advance electronic signature certificate must be available and, for entities and for individuals carrying on a business activity, electronic accounting records must be maintained and the general ledger must be submitted to the Tax Administration Service (SAT) on a monthly basis.

Entities

Filing requirements: Under the self-assessment regime, advance corporate tax is payable in 12 instalments. The annual tax return must be filed within the first three months of the following year (no extensions are available). VAT returns are due monthly, within the first 17 days of the following month. For imports, VAT is based on the Customs value, plus tariffs.

Information Returns: Information returns must be filed detailing the following transactions: loans with non-residents, transactions with business trusts and with related parties.

Taxpayers deriving income from a jurisdiction with a preferential tax regime must file an annual information return in February, as must taxpayers deriving income from a jurisdiction on Mexico’s “black list” and those that conduct transactions through fiscally transparent foreign legal vehicles or entities.

Information return on tax positions: Information relating to the taxpayer’s tax positions must be filed by March 31, along with the annual return of each year for taxpayers with taxable income exceeding MXN644m ($34.8m), non-residents with a PE in Mexico, Mexican entities with related party transactions, entities participating in the tax integration regime, and state-owned entities.

Tax audit report: An optional tax audit report may be filed for taxpayers with more than 300 employees, gross income exceeding MXN100m ($5.4m) or assets exceeding MXN79m ($4.3m).

Reporting on transactions: Details on certain transactions including financial transactions, transfer pricing adjustments, changes to the ownership structure, restructuring, reorganisations, among others, must be uploaded quarterly to the SAT website.

Disclosure requirements: Mexico has adopted CbC reporting requirements in accordance with the recommendations under the OECD’s BEPS project. Transfer pricing documentation, including the master file, local file and CbC report, must be filed by December 31 of the following fiscal year.

Individuals: Tax on employment income is withheld by the employer and remitted to the SAT. Income not subject to withholding is self-assessed; the individual must file a monthly tax return by the 17th day of the following month. An annual tax return must be filed in April of the following year; no extensions are available.

Tax treaties: Mexico has 56 income tax treaties in effect, and has concluded a number of tax information exchange agreements. Mexico signed the OECD multilateral instrument on June 7, 2017.

To obtain benefits under one of Mexico’s tax treaties, the beneficiary must produce a tax residence certificate or a copy of its tax return filed in the treaty partner country for the most recent fiscal year. Any relevant, particular conditions in the treaty also must be satisfied.

The SAT may request proof that double taxation would, in fact, arise in the absence of treaty benefits, by requiring an affidavit signed by the taxpayer’s legal representative.

VAT: The standard VAT rate is 16%; VAT on imports is assessed on the Customs value of the import, plus the import duty. A zero rate applies to exports and services used abroad if the services are contracted and paid for by a non-resident with a PE in Mexico, subject to certain conditions. Some goods and activities are tax exempt. The following supplies are exempt: land and residential buildings; books and newspapers; share transfers; used chattels; tickets and other documentation permitting participation in lotteries, raffles, games of chance and competitions; national and foreign currency; gold and silver pieces; and the sale of goods between non-residents or by a non-resident to a Mexican entity registered under an authorised programme to promote the export of goods.

Excise tax: A special tax on production and services is levied on the sale of certain goods and the provision of certain services, including alcoholic beverages and tobacco, beverages containing sugar, food with a high caloric density and fossil fuels other than natural gas.

The tax levied on beverages containing sugar is applied at a rate of MXN1 ($0.05) per litre, and an 8% tax is imposed on food with a caloric density of 275 kilocalories or more per 100 grams. In regards to the tax on the import and sale of fossil fuels other than natural gas, specific rates apply to certain types of fuel. The tax is payable through carbon credits, which are defined as those authorised in the Kyoto Protocol and supported by the UN within the UN Framework Convention on Climate Change.

A second environmental tax applies on the import and sale of pesticides at rates ranging from 6% to 9%, depending on the degree of toxicity. Customs, duties & free trade agreements: Customs duties must be paid on the import or export of goods, as follows: general import and export tax, determined according to the tariff classification number of the goods; Customs processing fee, paid for using the Customs facilities, personnel and systems, and so on; and electronic pre-validation data, approximately $16 per import document processed.

Mexico has 11 free trade agreements with 46 countries and regions, 32 reciprocal investment promotion and protection agreements with 33 countries, and nine economic complementation and partial scope agreements. The main benefit under the trade agreements is the application of preferential rates on qualifying import and export of goods. Currently the US is Mexico’s largest trading partner owing to its geographical proximity and the benefits under the NAFTA, which at the time of printing is under renegotiation.

Tax Incentives

Maquiladoras: Maquiladoras are Mexican companies that process, transform, assemble or repair imported materials, parts and components into finished goods that are subsequently re-exported. Maquiladora companies are typically owned by a foreign corporation, often a US company since many maquiladoras are located near the US border, with whom the maquiladora contracts to produce semi-finished or finished goods for shipment to the foreign company. VAT at 16% and excise tax are payable on the temporary import of materials, machinery and equipment by maquiladoras, although a maquiladora is not required to pay VAT/ excise tax on imports where it has obtained certification from the SAT. If a maquiladora does not obtain such certification, the company alternatively may use a bond issued by a financial institution to receive similar treatment. There are income tax benefits for maquiladoras, including an additional tax deduction equal to 47% of certain benefits provided to employees. Protection for the foreign principal company from exposure to the creation of a PE in Mexico is available if the maquiladora complies with certain requirements, such as special transfer pricing rules.

Special Economic Zones

The special economic zone (SEZ) regime is designed to stimulate growth, reduce poverty, facilitate the supply of basic services and attract investment to economically underdeveloped areas, mainly in the southern states of the country where seven SEZs have been launched in Lázaro Cárdenas, Puerto Chiapas, Coatzacoalcos, Progreso, Salina Cruz, Campeche and Tabasco.

Incentives and benefits are set through a declaration issued by the executive branch. The benefits are temporary – although they must be provided for at least eight years – and the amount of the tax relief or reductions is granted on a progressively decreasing scale. The VAT benefits are granted for goods imported into, and services carried out in, the SEZs.

In addition, Customs benefits may include expedited procedures, deferral of Customs duties until goods are removed from an SEZ; and a measure allowing companies to opt for the lowest Customs tariff available based on the duty applicable to the goods after they have undergone manufacturing, production or repair processes in an SEZ.

Fibra E

Similar to real estate investment trusts, fideicomisos de inversión y bienes raíces (FIBRAs) are financial instruments through which a trust can acquire and develop real estate assets in Mexico for the purpose of leasing them. In 2016 FIBRAs saw a new innovation with the listing of the first new FIBRA E by Promotora y Operadora de Infraestructura, an infrastructure operator that already has an equity listing on the Mexican Stock Exchange. Similar to FIBRAs, these new financial instruments are aimed at providing a stable vehicle for participants, i.e. investors, fund managers and the trust itself, in large-scale energy and infrastructure projects. FIBRA E allows investors to benefit from a favourable tax regime, including the following benefits:

• Operating companies are considered “pass-through” entities for tax purposes – tax is paid at the level of each investor – and are exempt from making monthly provisional income tax payments;

• Dividends paid by operating companies to shareholders are not subject to certain provisions of the income tax law and can be paid free of Mexican dividend withholding tax;

• The sale of trust-issued securities placed by FIBRA E on the Mexican stock market may be tax exempt for individuals and non-residents; and

• Formal obligations associated with having a PE in Mexico are eliminated for non-residents, with regard to their equity holding in the trust.

FIBRA E is suitable for all types of company, both private companies and those with state participation, involved with projects that generate stable cash flows, such as transmission and distribution lines in the power industry. Research & development of technology: Under an incentive re-introduced in 2017, taxpayers that conduct research and technological development will be granted a tax credit equal to 30% of both expenses incurred and investments made in the fiscal year that are related to research or development of technology. The non-taxable credit may be applied against the income tax due in the year in which the credit is determined, with any excess available for carryforward over the following 10 years. The credit applies only on the incremental expenses/investments made in the year, in comparison to the average of the expenses/ investments in the previous three fiscal years. Certain requirements must be met to qualify for the credit, for example, an information return that contains details of the expenses incurred must be submitted, among others. The total amount of the tax credit to be distributed among all applicants is capped at MXN1.5bn ($81.1m) for each fiscal year, or MXN50m ($2.7m) per taxpayer. Other Incentives: Accelerated rates of depreciation are available for investments made during fiscal years 2016-18 for taxpayers with revenue of at least MXN100m ($5.4m); those that make investments in the construction or expansion of transport infrastructure; and those whose activities relate to the treatment, processing or transport of oil, natural gas and petrochemicals.

Other incentives are granted for national cinematographic and theatrical production, high performance sports and electric vehicle power feeders, as well as for the FIBRA.

Other Taxes

Taxation of oil production: Companies engaged in oil exploration and production are subject to a special tax regime set out in the Hydrocarbons Revenue Law. The legislation sets out the rights and responsibilities of the Mexican government and private companies with respect to contracts for the exploration and extraction of hydrocarbons, including applicable contributions and taxes. The law also establishes a framework for government/private company participation in such activities and a tax regime for income arising from such activities. Mexican state-owned production entities and Mexican corporations may participate in public tenders individually, as joint ventures or as consortia.

Four types of agreement may be concluded by the government and Mexican state-owned companies or private parties: licensing agreements; production sharing contracts; profit sharing agreements; and services agreements.

Assignments, as opposed to contracts, are exclusively granted to Mexican state-owned companies.

The most significant features of the hydrocarbons legislation are as follows:

• Each public bid for the blocks to be contracted for the exploration and extraction of hydrocarbons must comply with the fundamental principles in the Mexican constitution, the Hydrocarbons Law, the Hydrocarbons Revenue Law and the legal framework for the sector;

• Specific rates over the contractual price or operating revenue for the government take are derived from the contractual arrangements, due to significant differences in the risk and cost structure of different areas/blocks with similar structures, following the general principles set out in the Hydrocarbons Revenue Law;

• Exploration phase fees and royalties apply;

• The 10-year carry forward period for net operating losses is extended to 15 years for taxpayers that carry out activities in deepwater offshore wells;

• Special depreciation rates apply, to certain categories of an entity’s assets; 100% on assets used for exploration, secondary and enhanced recovery and maintenance; 25% on assets used for the development and exploitation of fields; and 0% on investments for storage and transportation (e.g. pipelines, tanks, etc.);

• A 0% VAT rate applies on hydrocarbons exploration and extraction activities to the extent the activities are carried out with the Mexican Oil Fund (the institution created to manage the resources obtained by the contracts and assignments granted); and

• In addition to the consideration paid by a contractor to the federal government, the contractor is required to pay the municipal and state governments a monthly tax for the exploration and extraction of hydrocarbons. The tax is used to pay for the environmental impact of the activities and is payable at MXN1150 ($62) per sq km during the exploration phase and MXN6500 ($351) per sq km during the extraction phase. Taxation of mining income: A special mining right royalty of 7.5% is applied to the net profits derived by a concession holder from the sale or transfer of extraction activities. Profits for the purposes of the royalty are determined in a manner similar to the calculation of general taxable income, with some exceptions (e.g. interest and the annual inflation adjustments are not included in income and deductions are not available for investments in fixed assets, interest and the annual inflation adjustment). The mining royalty must be paid annually by the last business day of March of the year following the tax year.

If a concession holder does not carry out exploration and exploitation activities for two continuous years within the first 11 years of its concession title, the holder is required to pay an additional charge equal to 50% of the maximum fee. The fee will be increased to 100% for continued inactivity after the 12th year. Payment of the additional mining duty is due 30 days after the end of the two-year period.

Owners of mining concessions also are required to pay an additional 0.5% tax on gross income derived from the sale of gold, silver and platinum. The mining royalty is due annually by the last business day of March of the year following the tax year.

State & Local Taxes

Property tax: State and municipal authorities levy “rates” on the ownership of real property. Rates are deductible in calculating the corporate tax liability. Real-estate transfer tax: A rate between 2% and 5% applies to the transfer of real estate.

Non-residents without a PE: Rates ranging from 1% to 3% of salaries (3% in Mexico City) apply on the payroll paid to employees.

Labour Environment

Profit sharing: Mandatory profit sharing rules require an entity to distribute 10% of taxed profits to its employees no later than May of the year following the year in which the profits were generated.

Social security contributions: The programmes under the social security system cover work-related accidents and illness; non-occupational diseases and paid maternity leave; old age and various death benefits; and unemployment insurance.

The cost of the system is shared between employers, employees and the government. Employers generally bear most of the cost, with their share being approximately 20% to 30% of payroll, and employees make their contributions based on salary, subject to a ceiling of 25 times the daily minimum wage of the region.

Pensions: Employers must contribute an amount equivalent to 2% of payroll to an employee retirement fund and 5% of the total payroll to a housing fund, which will be added to the retirement fund if not used for a housing credit, that together, constitute a pension fund managed by private financial institutions. The usual retirement age is between 65 and 70. Immigration: There are several types of immigration status in Mexico and visas requirements may apply to foreigners, depending on the length of time the individual will remain in the country and their income.

OBG would like to thank Deloitte México for its contribution to THE REPORT Mexico 2018.