The First Steps of a Foreigner Looking to Invest in Mexico
Over the past decades, Mexico has consolidated an open and competitive legal framework aimed at attracting foreign direct investment and has continuously reinvented itself to appeal to foreign investors, moving beyond the closed and protectionist economic policies that previously governed the country. Nowadays, both Mexican nationals and foreigners may freely undertake and/or invest in almost any type of business project they may envision, subject to certain exceptions discussed below.
To that end, as a first step, it is important for a foreign investor to become familiar with business practices in Mexico before seeking to commence operations in the country. The Foreign Investment Law (Ley de Inversión Extranjera, hereinafter the “FIL”) is likely the first statute on which a foreign investor should focus, as its purpose is to regulate certain business activities within the national territory, applicable to both foreign and Mexican investors. The FIL defines three types of foreign investors: foreign investors as individuals, foreign entities, and foreign entities without legal personality.
Foreigners and nationals alike should initiate their business investment plans knowing that Mexico allows for almost any permitted business activity so long as the relevant person(s) abide by the rule of law. The FIL regulates foreign business activities, and it also adequately enunciates exceptions to the permitted realm of business activities in Mexico. The FIL categorizes business activities by either permissible, non-permissible, reserved, and conditional.
First off, the permissible activities are any and all licit activities that are not prohibited by law.
The non-permissible activities are those exclusively reserved to the State and, therefore, may not be carried out directly by private parties, whether national or foreign. Mexico, like most countries, reserves certain strategic activities to the government, such as the generation of nuclear energy and the exploitation of radioactive minerals, among others, to preserve essential State functions and safeguard national security. Other strategic activities, including those in the energy, electricity, and financial sectors, have been subject to legal reforms that currently allow the participation of private parties, including foreign investors, under regulated schemes, State permits, or contractual arrangements.
The reserved activities are designed only for Mexican nationals, thereby excluding foreign investors from participating in such activities, subject to certain exceptions. For example, foreign participation is permitted in certain reserved activities provided that foreign investors agree to be subject to the so-called “Calvo Clause”, a principle of constitutional origin whereby investors accept the jurisdiction of Mexican courts in the event of a dispute, and waive the right to invoke diplomatic protection. The application of the Calvo Clause has been limited by the international treaties to which Mexico is a party with respect to the protection of foreign investment. Additionally, limited foreign participation is permitted in certain reserved activities through neutral investment schemes, which allow foreign investors to participate on a restricted manner in authorized investment schemes such as authorized trusts or through the acquisition of equity interests limited to maximum percentage thresholds, thereby preventing foreign investors from exercising control over such entities. Among some of the reserved activities for Mexican nationals, we find land passenger transportation, tourism transportation, credit unions, development banking, and others.
The conditional activities limit foreign investment to participating within approved percentage caps applying to the business activities regulated in such section of the FIL. Among the conditional activities are domestic air transportation, specialized air transportation, insurance institutions, retirement fund administration institutions, manufacture and sale of guns and munitions, port administration, and other activities. Nevertheless, there are certain activities that allow for an increase in participation if applied and authorized by the Foreign Investment Commission.
Having briefly gotten acquainted with the FIL and Mexican practices, a foreign investor will be better positioned to determine the feasibility of its potential investment in the Mexican market. If the investment is deemed viable, the next step for foreign investors is to analyze their immigration status and determine the appropriate visa or immigration condition that may apply, considering the purpose of the investment and the intended length of stay in the country.
Additionally, foreigners seeking to conduct business in Mexico must evaluate the tax implications arising from their presence in the country, including the potential acquisition of tax residency, as well as comply with any applicable registration obligations before tax authorities, immigration authorities, or other regulatory entities. Depending on the nature of the activities to be carried out, additional steps may also be required, such as opening local bank accounts or obtaining specific registrations or authorizations.
Throughout this process, obtaining legal and tax advice from the early stages enables foreign investors to address these preliminary matters in an orderly manner, ensuring compliance with Mexican legal requirements and facilitating the implementation of their activities in the country.
JATA has the necessary experience to provide comprehensive legal advice to foreign investors interested in investing in Mexico, supporting them in complying with all applicable immigration, tax, and regulatory obligations.
Februrary 2026.
This article was originally written in 2011 and was updated and complemented in February 2026 by Carla A. Ríos. Please send any questions or comments to info@jata.mx. The original author of this note was a Senior Associate at JATA – J.A. Treviño Abogados, and the co-author who updated and complemented this article is an Associate at JATA and may be reached at crios@jata.mx. JATA is a Mexican firm with offices in Monterrey, Mexico, and Houston, Texas.
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