MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
1. General 1.1 Main Sources of Law
1.2 Main Market Trends and Deals Over the past 12 months, the real estate market in Mexico has been affected by the strong peso currency, rising inflation, and increased interest rates, causing a slowdown in many real estate transactions, including leasing, commercial and office space acquisition, mortgage transactions, and the construction industry. On the other hand, residential and industrial real estate acquisitions and rentals experienced sig - nificant growth. According to reports from mar - ket participants, despite rising prices, the real estate sector is considered a safe investment opportunity to protect capital. Experts predict growth in Mexico’s real estate sector this year, with industrial and tourism markets expanding the fastest. Rising inflation worldwide and in Mexico has led central banks to increase interest rates, poten - tially impacting transaction volume and values for businesses. Many companies have permanently adopt - ed remote work or hybrid models. The recent amendment to the Federal Labour Law, which addresses remote work, highlights that the pan - demic has led to lasting changes in office space usage and the residential real estate market, with an increasing number of workers now working from home. The activities of authorities involved in real estate transactions, such as treasury offices, public registries and municipal offices, have returned to pre-pandemic levels. Some have permanently implemented digital processes for specific pro - cedures that used to necessitate in-person filing of documents and applications.
Mexico comprises 31 states and Mexico City. The Federal Constitution outlines the matters in which the Federal Congress is authorised to approve laws. Matters not expressly delegated to the Congress are considered reserved for each state. Consequently, the laws governing real estate and property ownership vary depend - ing on the jurisdiction in which the property is located. In corporate combinations (ie, mergers, pur - chase of shares) or trusts, typically the General Law of Commercial Companies, the Commercial Code and, in some cases, the Stock Market Law are applicable. Parties are free to choose the court with subject-matter jurisdiction, provided certain requirements are met. The main laws applicable to real estate transactions, depend - ing on the value and nature of the transaction, are as follows: • the Federal Constitution; • Civil Code and tax laws of the state where the real estate is located; • Agrarian Law; • Income Tax Law; • VAT Law; • Foreign Investment Law; • General Law of Commercial Companies; • Stock Market Law; • General Law of Ecological Balance and Envi - ronmental Protection; • General Law of Securities and Credit Transac - tions; • Federal Antitrust Law; and • federal, state and municipal zoning and plan - ning provisions.
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