MEXICO Law and Practice Contributed by: Roberto Cannizzo, Carlo Cannizzo, Stefano Amato and Mauricio Moreno-Rey, Cannizzo
The by-laws containing all the above informa - tion may be drafted either by a lawyer or by the same notary public or commercially authorised person ( corredor público ) who will incorporate the company. FIBRAs To incorporate a FIBRA, the parties must have at least 70% of their assets invested in real estate, be engaged in the purchase or construction of real estate to be leased, and distribute among the holders at least 95% of the tax result of the previous year. SIBRAs SIBRAs operate in a similar manner to FIBRAs; however, they are commercial companies incor - porated under Mexican law instead of trusts. As with FIBRAs, real estate developers receive some tax benefits for using a SIBRA as a financ - ing and structuring mechanism for their project. CKDs CKDs are securities that are issued through an irrevocable trust. Initial patrimony is formed with the proceeds of the placement and is used to invest in or to finance Mexican companies, either directly or indirectly, through various investment vehicles. CKDs are designed to allow the flow of resources to finance projects that consume resources in the short term and later generate long-term flows. CERPIs CERPIs are similar to CKDs; however, only quali - fied investors can own CERPIs. 5.3 REITs FIBRAs (REITs) are investment vehicles listed on the Mexican Stock Exchange (BMV) for the acquisition and construction of real estate for leasing. At present, Mexican law solely per -
mits publicly traded FIBRAs. FIBRA assets may comprise a wide range of properties, spanning from industrial facilities such as warehouses and manufacturing sites, to corporate spaces such as offices and work areas, as well as commer - cial premises including malls, plazas and depart - ment stores. Legally, a minimum of 70% of a FIBRA’s portfolio must be allocated towards the following: • real estate assets designated for rental or accommodation purposes; • procurement of rights which result in rental income; or • providing financing for the acquisition or development of real estate assets intended for leasing. The majority of FIBRA certificates are available for issuance, purchase and acquisition by both domestic and foreign investors who hold invest - ment agreements with authorised institutions in Mexico. Trust certificates are offered to the gen - eral public through a public offering in the stock market. Holders of trust certificates issued by a FIBRA will be entitled to receive dividends at least once a year for at least 95% of the result of the immediately preceding fiscal year. Such dis - tributions shall be made no later than March 15th of each year. FIBRA is typically used because it is considered a tax pass-through entity and allows for more flexible structuring of real estate combinations than may be achieved through a corporation. 5.4 Minimum Capital Requirement For a stock company, there is no mandatory minimum capital stock required by law. The ini - tial minimum capital stock is determined by the shareholders upon incorporation.
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