Month: March 2016

Professional migration in Mexico: The VISA for job offer and investor’s VISA.

Migration in Mexico requires a VISA (except for tourism for some foreigners, traveling less than 180 days[1]).

Article 52 of the Migration Act of Mexico (hereinafter “MAM“)[2] provides that foreigners can stay in Mexico in the status of:

  1. Visitor for a residence period of less than 180 days;
  2. Temporary resident to stay for longer than 180 days until 4 years; and
  3. Permanent Resident to stay for and indefinitely period. The permanent resident status requires the temporary resident status during 4 years.

These residence conditions can be given for various reasons (family reunification, job offer, investment, adoption, education, travel, humanitarian reasons, asylum ….).[3]

Various VISAS allow the applicant to perform an economic activity in Mexico, such as the following:

  • The visitor VISA to perform remunerated activities for less than 180 days (especially used in case of: board meeting, temporary work, liberal profession);
  • Border worker VISA;
  • The VISA for job offer; and
  • The investors VISA.

This article aims to study the characteristics of the VISA for job offer and the investor’s VISA. These VISAS permits to obtain the  temporary residence in Mexico for any person from a foreign country for economic reasons.

The job offer VISA and investor’s VISA have their own characteristics (II) although they grant common benefits (I).

 

I. The common regime  of the job offer and investor‘s VISAS

These common characteristics concerns in a more general way to all temporary residence VISAS.

Duration

Temporary residency VISAS are issued for a period of one to four years and may be renewed within 30 days before the expiration date  (for a maximum total duration of 4 years).[4]

After 4 years of staying as a temporary resident in Mexico, the VISA holder can apply for obtaining permanent resident status.[5]

Procedure to obtain the VISA       

Article 41 of MAM states that VISA applications are introduced before a Mexican consular office and, as a consequence, these applications can’t be held directly in Mexico before the National Institute of Migration (hereinafter the “NIM” )[6].

As an illustration, a French citizen in Mexico without VISA (tourist staying for less than 180 days) who wish to obtain a job offer VISA would have to leave Mexico territory in order to introduce  the VISA application within a Mexican consular office (not necessary a consular office located in his home country).

As an exception of the previously mentioned rule, the same article states that for family reunification purposes, the application for the VISA for job offer may be filled directly in front of the NIM in Mexico.

After the application before a consular office, the applicant will receive a migration document and will have visit Mexico within 6 months after the issuance of the document. Once in Mexico, the applicant will have 30 days to get before the NIM his temporary resident card which attests a regular migratory situation.[7]

Family and departure of the territory

Article 52 VII of the MAM establishes, that the migrant wife or partner, his children and his parents could migrate into  Mexico, during the period of validity of his or her  VISA, as temporary residents with the possibility to obtain a work permit.

The temporary status VISA allows the holder to freely enter and departure the territory.

Changing circumstances    

Article 63 of the MAM provides that foreigners are obliged to communicate to the NIM any change about civil status, nationality, domicile or workplace within 90 days after such change.

 

II. Specific characteristics of the job offer and investor‘s VISAS

1. The VISA for job offer

The VISA for job offer allows the holder to carry out a remunerated activity in Mexico.[8]

The Employer shall be a Mexican company. Thus, foreign companies wishing to establish a company in Mexico and sending foreign staff must first incorporate the company (the incorporation of a company in Mexico is open to foreigners in most of the business areas. For more information: http://tmclegal.com/la-inversion-extranjera-en-mexico-en-camino-a-muchas-y-mejores-oportunidades/?lang=eng) and then, hire the foreign staff through the Mexican company.

The employer must be registered as such before the  NIM in order to be able to hire foreigners.[9]

The company making a job offer shall indicate the following elements:

Position, contract term, remuneration, workplace and the registration of the employer before the NIM.[10]

2. The investor‘s VISA

This VISA allows the temporary residence in Mexico to the person who invested in the following areas[11]:

  • Participation in the capital stock of Mexican companies;
  • Fixed assets or capital assets for economic or entrepreneurial purposes; and
  • The development of economic and business activities in the national territory which are job-creating.

The minimum investment amount required for the grant of the VISA varies according to the consular offices.

Contrary to the VISA for job offer, the investor‘s VISA does not allowed his titular to carry out a subordinated activity which is remunerated in Mexico.

 

In order to conclude, if these two VISAS correspond to different purposes, they grant various common benefits.

These temporary residence VISAS may become permanent residence VISAS, after 4 years. It is recommended to be duly diligent with the renewal procedure of the VISA in order to not be deprived of the prior benefit and have to restart the migration process from the very beginning.

TMC Legal advice and accompanies its clients in all their migration process before the consular offices and the National Migration Institute of Mexico.

 

[1] http://www.inm.gob.mx/gobmx/word/index.php/paises-no-requieren-visa-para-mexico/ (spa).

[2] Migration Act of Mexico (spa) and Regulation of the Migration Act of Mexico (spa).

[3] Migration Act of Mexico, title IV, Chapter 2, Article 52.

[4] Regulation of the Migration Act of Mexico, Article 156.

[5] Regulation of the Migration Act of Mexico, Article 157.

[6] Migration Act of Mexico, title IV, Chapter 1, Article 41.

[7] Migration Act of Mexico, title IV, Chapter 2, Article 59.

[8] Ibid., footnote 3.

[9] Regulation of the Migration Act of Mexico, Article 115.

[10] Ibid., footnote 9.

[11] Regulation of the Migration Act of Mexico, Article 107.

Foreign Investment in Mexico: On the Way to More and better Opportunity

Mexico is now ranked as the 38th Best Place for Business according to World Bank Doing Business 2016 Report and continues to climb the ranks annually. [1]  This shows Mexico’s efforts to lure foreign investment in order to create additional employment and to increase industrial output.

This openness to foreign investment has resulted from a constantly evolving legal framework, as per ratification of international free trade agreements—for example, the North American Free Trade Agreement in 1992 and the Mexico-European Union Free Trade Agreement in 1997—and pro-foreign investment federal legislation.

Nowadays, foreign investors can choose to freely invest in Mexico (I). However, they may encounter restrictions in certain areas, which will be summarized hereafter (II).

 

I. Absence of restrictions for foreign investors

Articles 25 to 28 of the Political Constitution of the United Mexican States (hereinafter the “Constitution“)[2]  and the Law on Foreign Investment of Mexico (hereinafter the “LFE“)[3] are the most important basis of Mexico’s legal framework for foreign investment.

This legal framework has been modified constantly, to demonstrate a drive towards liberalization—for example, the opening of the oil and gas sector to foreign investors in 2014— these dispositions reflect changes in Mexico’s economic policy.

Article 4 of LFE stipulates that foreign investors may hold 100% of the capital stock of a Mexican corporation or association. The previous law restricted this participation to 49%.

These stipulations are not applying to neutral investment (financial investment without control rights) which belong to a specific title of the FIL.[4]

LFE grants to every foreign investor the same rights. There are no restrictions according to the investor’s nationality.

However, a State which entered into a Free Trade Agreement with México may have less restrictions on investment on some reserved activities according with the dispositions established in the treaty.

Except for reserved activities, foreign investors are free to invest in or set up companies in Mexico.

However, all foreign investors that aims to incorporate a company in Mexico,  require  to comply with specific obligations (as the registration before the National Registry of Foreign Investment of Mexico “Registro Nacional de Inversiones Extranjera”).

 

II. The ​​reserved activities

The Constitution provides in Articles 25 to 28, that foreign investors cannot hold freely 100% of the capital stock on some strategic activities in Mexico. The LFE applies the provisions of the Constitution and outlines the activities in which investment is limited and their regime.

These reserved activities are therefore an exception to Article 4 of LFE.

There are different legal regimes applicable according to the activities:

  • The activities which are reserved exclusively for the State both listed by the Constitution and Article 5 of LFE (exploration and extraction of oil and hydrocarbons ; electricity ; nuclear power ; radioactive minerals ; telegraph and radiotelegraph services ; postal services ; minting of coins ; supervision control and surveillance of ports, airports and heliports (…)[5]).
  • The activities which are reserved exclusively for Mexican investors listed by Article 6 of LFE (domestic land transportation for passengers, tourism and freight not including messenger or courier services ; development banking institution ; rendering of professional and technical services provision expressly defined by the applicable legal provisions (…)[6]).
  • The activities subject to a specific participation percentage listed in Article 7 of LFE where foreign investment is authorized up to the following percentages: (up to 10% in cooperative companies for production; up to 25% in Air transportation and up to 49% in firearms, explosives, newspaper, series “T” shares in companies owning agricultural, fresh and coastal water fishing (…)[7]).
  • The activities requiring prior approval defined in Article 8 of LFE. This approval must be given by the Foreign Investment Committee for a higher stake to 49% (port and marine services; air terminals; private education; legal services; construction; exploitation and operation of general railways (…)[8]).

This list may change according to legislative reforms.

 

As an outgrowth of its legal and structural changes, Mexico stands today as a reference country for foreign investment.

For several years, TMC Legal has advised many clients throughout investing in Mexico in order to develop and realize their projects both legally and strategically.

For more information, ProMéxico[9] (English website) https://www.promexico.gob.mx/ is a federal entity responsible for attracting foreign investment.

 

 

[1] World Bank Doing Business 2016 Report is available in both English and French.

[2] Political Constitution of the United Mexican States of 1917 (Spanish).

[3] Law on Foreign Investment of Mexico (Spanish).

[4] Ibid., footnote 3, FIL, Title 5 “Neutral Investment”

[5] To see the full list: Ibid, footnote 3, FIL, Article 5.

[6] To see the full list: Ibid, footnote 3, FIL, Article 6.

[7] To see the full list: Ibid, footnote 3, FIL, Article 7.

[8] To see the full list: Ibid, footnote 3, FIL, Article 8.

[9] ProMéxico website is available on French, English and Spanish.