In recent years, Mexico has been experiencing a solid growth due to its integration with and dependence on the US markets. Its efforts to enforce patent and intellectual property laws are advanced compared with those in place in other developing nations.
Recent regulatory reforms and improvements in the political climate, have had a positive impact on attracting direct investment (DI) to the country and private equity community in particular. Today, more PEFs in Mexico are opening on a regular basis, and it is noteworthy that the fund managers and GPs may work in various sectors.
Below we offer a brief overview of PEFs regulation prepared by our experts for entrepreneurs wishing to establish a PEF in Mexico.
PEF registration in Mexico
The process for opening a Mexican PEF is quite lengthy and it is directly dependent on the chosen fund structure. Often, you will have to spend about a year on all procedures.
PEFs may be created by means of Mexican trusts to issue CKD, either pre-funded or partially funded, which are administered by a registered GP.
The registration of a public PEF can be also done by issuing CERPIs or by registering FIBRA in Mexico.
Overseas PE investors are recommended to carefully evaluate the costs associated with setting up a CKD prior to making a decision to invest directly in it.
To register a PEF in Mexico and raise investor funds, the regulator has to issue certificates for public placement through stock exchanges or they can be privately issued.
Investors accept the income from the trust directly. The same principle applies here as if they were investing in a Mexican company directly.
Another popular structure used to register an investment fund in Mexico is the SAPI. It is popular for offering great flexibility in structuring different types of businesses. Moreover, SAPI is not subject to obligations applicable to state-owned enterprises and is not subject to oversight by the SEC. So the good news for anyone looking to use this structure to create a foundation in Mexico is that you don't need to disclose information, no one will ask you to.
However, fund managers should be aware that they are publicly listed and they need to develop sophisticated operational risk measurement systems and practices. In the light of this approach, it entails the disclosure of certain information.
Disclosure obligations include, first and foremost, the obligation to disclose any information required by investors to make investment decisions. Furthermore, the securities regulator should be regularly informed through the provision of updated annual reports.
The Mexican economy has undergone an important transformation. Experts assess the prospects for the development of the Mexican PE industry as quite promising, despite the still actual negative imprint left by the pandemic.
This information should not be construed as professional legal advice and is intended solely as commentary on regulatory developments affecting the PE community in Mexico.
A consultation on PEF regulation in Mexico will help you understand the details and implement your plans in the near future. Contact our highly qualified specialists by filling out the short form below.