MEXICO Law and Practice Contributed by: Julián J. Garza Castañeda and Paulina Bracamontes Belmonte, Nader Hayaux & Goebel
2. Authorisation 2.1 Providing Financing to a Company In Mexico, lending is not in itself a regulated activity. In other words, a regulatory licence is not always manda- tory to conduct lending activities. However, if lending constitutes a company’s primary activity, it will likely need to operate as a regulated financial entity. Requirements to operate as a regulated financial enti- ty vary significantly depending on the type of finan- cial entity involved. As a general rule, authorisation from the Mexican Banking and Securities Commission ( Comisión Nacional Bancaria y de Valores , or CNBV) is required to operate as a regulated financial entity. Mexican banks, for example, need to file an authorisa- tion request with the CNBV, which shall include: • information and corporate documents about the bank and its direct and indirect equity holders; • corporate documents of the stockholders; • information regarding proposed operations of the Mexican bank; • multiple additional documents required by the CNBV; • corporate structure information about the bank; • information relating to the capitalisation of the bank; and • information about officers and directors of the bank. Licences are generally granted by the CNBV on a dis- cretionary basis. 3. Structuring and Documentation 3.1 Restrictions on Foreign Lenders Providing Loans Foreign lenders are not restricted from granting loans to Mexican borrowers, or from obtaining a security interest over assets owned by Mexican counterparts or located in Mexican territory to secure their financ- ings.
Foreign lenders are not required to be specifically reg- istered with, or approved by, governmental authorities in order to conduct lending activities in Mexico. Lending activities of both foreign and local lenders in Mexico may be conducted through multiple struc- tures, including unsecured lending, secured financing, club deals, syndication, structured finance, securitisa- tion transactions, capital and operation leasing, bond offerings and factoring. Both Mexican and foreign banks are subject to specific regulations and limita- tions. Subject to certain exceptions, to achieve a 4.9% with- holding tax rate on interest payments of debt securi- ties issued by a Mexican issuer and placed with for- eign holders, the following conditions apply: • the securities should be placed through banks or broker-dealers in a country with which Mexico maintains a tax treaty for the avoidance of double taxation; and • filings with the CNBV and the tax administration must be completed. 3.2 Restrictions on Foreign Lenders Receiving Security Foreign lenders may secure their loans with Mexi- can assets, while Mexican entities can guarantee the payment of loans of foreign lenders. However, it is important to be aware of Mexican laws regarding the granting of personal guarantees such as fianzas, obligaciones solidarias and avales . Statutory laws concerning fianzas , in particular, can limit the liability of the guarantor under a number of circumstances. Therefore, it is important to consider waiving certain rights granted to the guarantor under Mexican law. In the case of avales , which apply to Mexican pagarés (promissory notes), it is necessary to comply with Mexican laws applicable to negotiable instruments. Among other things, these laws allow the holder of the note to pursue claims through executive legal pro- ceedings. To be enforceable, avales must adhere to the formal requirements outlined by Mexican law.
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