MEXICO Law and Practice Contributed by: Javier Díaz de León, Monica Ramos and Martín Cortina, Díaz de León Abogados
avoiding negligent practice, and limited to good faith principles. In many cases, fiduciaries prefer to stipulate the permissible level of risk in policies to be observed when making strategic investment decisions. In other circumstances, the shareholders’ meeting is required to approve qualified decisions and transactions, in order to prevent wrong investment decisions. 6.4 Fiduciary Investment Mexico has a limited framework regarding fiduciary investment in trusts, foundations or similar entities. The general rule is that fiduciary persons must protect the economic interest of trusts, foundations or similar entities whether directly or by following the invest - ment instructions of protectors ( comités técnicos ) or investment committees ( comités de inversión ). In practice, the appointment of protectors and invest - ment committees prevents investment disputes and enables fiduciaries to continue to manage the trusts, foundations and similar entities by following invest - ment guidelines previously defined for the benefit of beneficiaries. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship The domicile of individuals is the place where they ordinarily reside or where their centre of vital interest is located. In the case of entities, domicile is established in the by-laws of Mexican companies. Mexican citizens are: • persons who were born in Mexican territory; • persons who were born overseas and who are children of Mexican citizens; and • persons who were born on Mexican vessels or aircraft. Mexican citizenship may be also obtained by naturali - sation, which requires: • legal residency in Mexican territory for a five-year period; • existing marriage with a Mexican spouse and mar - riage address in Mexico for a two-year period;
• adopted Mexican children and legal residency in Mexico for one year; and • qualified services and projects under criteria set by
the Ministry of Foreign Affairs. 7.2 Expeditious Citizenship
There is no expeditious process to obtain Mexican citizenship. However, foreign citizens may qualify for temporary residency that allows them to stay in Mexico for more than 180 days and up to four years, whereas permanent residency allows them to live and work indefinitely in Mexico. 8. Planning for Minors, Adults with Disabilities and Elders 8.1 Special Planning Mechanisms Mexico does not have an equivalent mechanism to the special-needs trust. However, three mechanisms may achieve similar objectives: parental authority ( patria potestad ), guardianship ( tutela ) and a management trust ( fideicomiso de administración ). Parental Authority Parental authority provides for specific duties from parents over minor children and their assets. It has a dual function: (i) personal care, decisions on health, education, and general welfare; and (ii) asset admin - istration, with an accounting obligation until the minor reaches legal age (18 years old). Guardianship Guardianship is a protective measure involving the custody of persons not subject to parental authority who present disability or lack of capacity. It includes (i) minors who are not under parental authority; and (ii) adults with physical, psychological or sensory impair - ments, or addictions to toxic substances. Management Trust The management trustee must comply with distribu - tion provisions for the benefit of minors or adults with disabilities for the time set forth in the trust agree - ment. Trust distributions are generally connected with the economic requirements of the disabled person, including personal care and custody, living expenses,
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