Economy Profile of Mexico

Ease of Doing Business in Mexico

Rankings on Doing Business topics – Mexico

Topic Scores

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

Preregistration (for example, name verification or reservation, notarization)
Registration in the economy’s largest business city
Postregistration (for example, social security registration, company seal)
Obtaining approval from spouse to start a business or to leave the home to register the company
Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day (2 procedures cannot start on the same day)
Procedures fully completed online are recorded as ½ day
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)

Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – Mexico City

Figure – Starting a Business in Mexico City – Score

Figure – Starting a Business in Mexico City and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Mexico City – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in Mexico City – Procedure, Time and Cost

1 Obtain the authorization of using the company name online

Agency : Ministry of Economy (Secretaría de Economia)

The company name can be reserved directly by the public notary through the following online platform: https://mua.economia.gob.mx/mua-web/muaHome. In the website, it must be indicated the following information: name, type of company and the notary public with whom the constitution will be formalized. Once all the information is provided, the notary must sign the request with the electronic signature (e.firma).

2 days

no charge

The Ministry of Economy will first check its availability and then proceed if it complies with the legal framework. The authorization is issued via email within the 2 next days and it is valid for 180 days.

Once the companie's incorporation deed is made, the Notary Public will notify the Ministry of Economy of the using of the authorized company name.

2 Notary prepares the deed and parties sign it at the notary public

Agency : Public Notary

The company’s deed of incorporation must be prepared by a notary. Upon receipt of the authorization regarding the company name, the notary proceeds to notify of the use of the corporate name and draft the articles of incorporation in order to be duly signed by the partners.

The founding partners must provide their general personal information (official identifications, Tax IDs) and a statement for the start-up capital, which is normally transferred to the new company's management board. A bank account can be opened once the company has been incorporated.

3 File the deed of incorporation with the Public Registry of Commerce

Agency : Public Registry of Commerce

In order to publicize the act of incorporation, companies registered must file the deed of incorporation with the Public Registry of commerce.

Half a day (online

procedure)

Included in procedure 2

The notary public is in charge of making the registration of the articles of incorporation at the Public Registry of Commerce whether in person or through remote electronic means. The following documents are required: (i) a duly notarized articles of incorporation (+ a copy) and (ii) a document certifying age above 18 years old.

Once the fees are paid the information is uploaded into the Siger system (https://rpc.economia.gob.mx/siger2/xhtml/login/login.xhtml) the pre-coded forms are filled out with information included in the articles of incorporation, then they are sent to the Public Registry of Commerce and enrollment takes place immediately.

Since December 15, 2018, the amended Law of Mercantile Corporations introduces the requirement to electronically notify any changes in the shareholders structure. At the incorporation moment, the initial shareholder structure is provided in the public deed at the Public Registry of Commerce. After incorporation, any share transfer should be electronically notified to the Ministry of Economy through the electronic system.

It usually takes the notary 2-3 days for the notary to review the documents and process the final incorporation deed for execution by the relevant parties.

2 days on average MXN 10,500 (notary fees)

+ MXN 18,407 (registration fees)

4 Obtain a Tax Registry Number (RFC) with the Tax Authorities (Sistema de Administración Tributaria – SAT)

Agency : Tax Authorities (Sistema de Administración Tributaria – SAT)

The company must obtain a Tax ID number (Registro Federal de Contribuyentes – "RFC") from the Tax Authorities. Notaries are able do obtain it at the following web page: https://www.siat.sat.gob.mx/PTSC/. He/she submits the information on the company and retrieves the RFC and the Tax Identification Card in pdf format.

The entrepreneur can also obtain the RFC but needs to go in person to the service center to obtain an electronic signature.

Half a day (online procedure) , 2 days if done by the entrepreneur

Starting a Business – Monterrey

Figure – Starting a Business in Monterrey – Score

Figure – Starting a Business in Monterrey and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Figure – Starting a Business in Monterrey – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Details – Starting a Business in Monterrey – Procedure, Time and Cost

1 Obtain the authorization of using the company name online and file the draft deed of incorporation with the notary online

Agency : Ministry of Economy (Secretaría de Economia)

Once the companie's incorporation deed is made, the Notary Public will notify the Ministry of Economy of the using of the authorized company name.

2 days no charge

2 Notary prepares the deed of incorporation and parties sign it at the notary public

Agency : Public Notary

3 File the deed of incorporation with the Public Registry of Commerce

Agency : Public Registry of Commerce

In order to notify the act of incorporation, companies must file the deed of incorporation with the Public Registry of commerce.

Less than one day

(online procedure)

5 per thousand of share

capital

The registration fee is 0.5% of the share capital to subscribe. The minimum fee is 422.00 pesos and the maximum fee is 48,159.00 pesos.

Once the fees are paid the information is uploaded into the portal (http://www.siger.gob.mx/), the pre-coded forms are filled out with information included in the articles of incorporation and they are sent to the Public Registry of Commerce where enrollment takes place immediately.

The company’s deed is prepared by a notary. Upon receipt of authorization regarding the company name, the notary proceeds to notify of the use of the corporate name and draft the articles of incorporation in order to be duly signed by the partners. The founding partners must provide their general personal information (official identifications, Tax IDs) and a statement for the start-up capital, which is normally transferred to the new company's management board. A bank account can be opened once the company has been incorporated.

2 days MXN 8,500

4 Obtain a Tax Registry Number with the Tax Authorities (Sistema de Administración Tributaria – SAT)

Agency : Tax Authority (Sistema de Administración Tributaria – SAT)

The company must be registered at Registro Federal de Contribuyentes (RFC) from the Tax Authority. Notaries are able to register the company via the online portal (https://www.siat.sat.gob.mx/PTSC/). He/she submits the company information and obtains the RFC number and the Tax Identification Card (Cedula de Identificacion Fiscal) in pdf format.

The legal representative can also register at the RFC for the company but needs to go in person to a Tax Authority office. She/he must file in the following documents: (i) Pre-application online form, (ii) Act of incorporation of the company, (ii) the power of attorney that proofs hers/his representation, (iii) official ID of legal representative and (iv) proof of fiscal domicile.

Less than a day (online procedure), 1 day if done by the entrepreneur

no charge

5 Register with the Mexican Social Security Institute (IMSS)

Agency : Mexican Social Security Institute (IMSS)

This is a federal procedure that is performed to enroll at least one worker in Social Security. The application may be pre-submitted online and then through a visit to the agency’s office the entrepreneur will obtain the registration. This procedure can be done enterely online with the electronic signature (e.firma) or with the Single Registry Number of Population (CURP).

1 day

no charge

The entrepreneur must file the following documents: i) tax number (RFC); ii) proof of the company's residency; iii) company's localitation map; iv) incorporation deed recorded before the Public Registry of Commerce; v) power-of-attorney (if applicable); vi) ID of the attorney-in-fact or shareholder of the company; and vii) RFC and CURP of the company's attorney-in-fact or shareholder.

The process is regulated by the Social Security Act and the Regulations of the Law on Social Insurance regarding Membership, Business Classification, Collection and Taxation.

At the same time the company registers with the IMSS, registration at the National Worker’s Housing Fund Institute (INFONAVIT) takes place and individual retirement savings accounts for the employees (Afore) are opened.

6 Register with the State Taxpayer Registry at the Ministry of Finance of the State of Nuevo León

Agency : Ministry of Finance of the State of Nuevo León

This procedure consists in registering the tax payer’s information at the State Registry to obtain an account to file the tax returns corresponding to the payroll tax (ISN). To complete the procedure, the user must have:

State Registry Form (original and copy);
Proof of fiscal residence, no older than one month (original and copy);
Official current photo ID of the person concerned and her/his representative if applicable (original and copy);
Articles of incorporation (copy);
Proof of the identity of the legal representative, and where applicable the notarized power of attorney and a valid official identification with photograph of the representative (original and copy)
Being a person or entity;

Domicile or establishment located in the state of Nuevo León.

Information about this procedure is available in person, by phone and on the agency’s website: http://www.nl.gob.mx/ The employer must go to the Taxpayers Registry, Lodging, Awards and ISAN window, and proceeded to register her/his data in the system and at the end is given an account number.

7 Register with the National Business Information Registry (Sistema de Información Empresarial – SIEM)

Agency : National Business Information Registry (Sistema de Información Empresarial – SIEM) Mandatory registration with the National Business Information Registry (SIEM) has been in effect since January 1997 for all business establishments subject to a tax regime and performing business activities. The company will be registered with the specific chamber corresponding to its

corporate purpose or activities within the following 2 months after registration at the tax authority.

1 day

The costs can vary from

MXN $100 to MXN $670

The pre-registration can be done through the portal https://siem.gob.mx/establecimiento/como- me-registro providing the information of the establishment or business location. The entrepreneur will select the payment method and he will wait for the visit of the personnel of the corresponding business chamber, who will validate the location of the business.

The cost varies with the number of employees and the company’s activities as shown below. Fees for industry related activities (maximum fees):

-6 or more employees $ 670

-3 to 5 employees $ 350

-Up to 2 employees $ 150

Fees for commercial and services related activities (maximum fees):

-4 or more employees $ 640

-3 or less employees $ 300

-Up to 2 employees $ 100

The costs can vary from MXN $100 to MXN $670.

The procedure is regulated by Arts. 154 and 155 of the Finance Act of the State of Nuevo León; and by the Agreement of Cooperation in Fiscal Federal Matters between Mexico’s Federal Ministry of Finance and the State of Nuevo León.

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates
Submitting all required notifications and receiving all necessary inspections
Obtaining utility connections for water and sewerage
Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes

Building quality control index (0-15)

Quality of building regulations (0-2)
Quality control before construction (0-1)
Quality control during construction (0-3)
Quality control after construction (0-3)
Liability and insurance regimes (0-2)
Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.
Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:
Will be used for general storage activities, such as storage of books or stationery.
Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.
Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:
Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.
Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.
Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Mexico City

Figure – Dealing with Construction Permits in Mexico City – Score

Figure – Dealing with Construction Permits in Mexico City and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Mexico City – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Mexico City and comparator economies – Measure of Quality

figure dealing with construction permits in mexico city procedure time and cost

Details – Dealing with Construction Permits in Mexico City – Procedure, Time and Cost

1 Request and obtain the alignment certificate (alineamiento) and official number (número official)

Agency : Delegational One Stop Shop (Ventanilla Única Delegacional), Urban Development and Housing Ministry (Secretaría de Desarrollo Urbano y VIvienda) and Mexico City Government (Gobierno de la Ciudad de México)

For the official number, the Mexico City Government will assign a single official number for each property, at the request of the interested party, that has a front facing the public pathway. For the official alignment, the plot across the land indicates the restrictions or expropriation lines to be respected in the interaction between the property and the public pathway. Obtaining the single

zoning certificate stating specific land use and feasibility is required.

11 days

MXN 1,285

The following documents must be submitted:

Proof of payment of applicable real estate taxes (copy)
Public deed certifying property or title ownership (original and copy)
Payment of all fees
Application form (original)
Identification of the person completing the procedure and document certifying the respective identity (original and copy)

2 Obtain a topographic map

11 days MXN 17,500

Details – Dealing with Construction Permits in Mexico City – Measure of Quality

Valid alignment certificate and official number (simple original copy or certified one)

Single zoning certificate for specific land use and feasibility (simple original copy or certified copy

Four copies of the architectural project for the construction work on duly outlined scale maps and

Project descriptive report

Calculation report

Registration and identification card of the director responsible for the construction work and the

Two copies of the structural design signed by the director responsible for the construction work

Proof of payment of improvement taxes for potable water and sewerage works provided by the

Up to 300 square meters: 1 year

300 — 1,000 square meters: 2 years

More than 1,000 square meters: 3 years

Dealing with Construction Permits – Monterrey

Figure – Dealing with Construction Permits in Monterrey – Score

Figure – Dealing with Construction Permits in Monterrey and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Figure – Dealing with Construction Permits in Monterrey – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Monterrey and comparator economies – Measure of Quality

figure dealing with construction permits in mexico city and comparator economies measure of quality

Details – Dealing with Construction Permits in Monterrey – Procedure, Time and Cost

1 Obtain feasibility and guidelines information for urban land use (uso de suelo) in the Secretariat for Urban Development and Ecology

Agency : Secretariat for Urban Development and Ecology

The feasibility and guidelines information for urban land use provides information on the type of constructions that are allowed on the land.

The following documents must be provided:

Official request
Construction plan or previous records of the land (if available)
Sketch of location
Payment of the corresponding fees

5 days

MXN 226

The Secretariat will issue the respective response, which will not constitute authorization of land use, nor will it generate rights in the event that the City’s Urban Development Plan is modified, since it is merely informative.

The procedure is legislated in Art. 164 of the Zoning and Land Use Regulations of the City of Monterrey, Nuevo León. The basis of the cost is Art. BIS-52, Section I of the Finance Act for the Municipalities of Nuevo León.

The fee for this procedure is 2.80*(Unidad de Medida y Actualización-UMA).

2 Receive civil protection authorization from the Department of Civil Protection at the Secretariat for Urban Development and Ecology (SEDUE)

Agency : Department of Civil Protection

This consists of the verification that the premises comply with the security measures and minimum standards of protection to prevent civil contingencies when in operation.

According to Art. 20 of "Reglamento para las construcciones del Municipio de Monterrey", the applicant must present the following documents:

Payment of the corresponding fees for the procedure.

The document will be valid for one year

The fee for this procedure is 50*daily minimun wage (Unidad de Medida de Actualizacion-UMA)

8 days MXN 4,030

3 Obtain alignment certificate (alineamiento vial) from the Secretariat for Urban Development and Ecology

Agency : Secretariat for Urban Development and Ecology

The certificate of alignment is issued by the Secretariat for Urban Development and Ecology, not the Fire Department, to provide the exact limit of the private property in regards to public roads.

5 days

MXN 564

The following documents must be provided:

Document proving ownership;
Official identification of the legal representative;
Proof of property taxes paid;
Plan of the location of the property

The procedure is legislated in Art. Regulation 73 of the Zoning and Land Use Rules of the City of Monterrey, Nuevo León. The basis of the cost is in Art. 52-BIS, Section IX of the Finance Act for the Municipalities of Nuevo León.

The fee for this procedure is:

-For information on road alignment: 2.1 UMAs (Unidad de Medidad y Actualizacion, at MXN 80.60)

-For document search: 1.4 UMAs (Unidad de Medidad y Actualizacion, at MXN 80.60)

-For issuing of certifications and records: 3.5 UMAs (Unidad de Medidad y Actualizacion, at MXN 80.60)

4 Request land use license, building use license, official number and construction license

Agency : Secretariat for Urban Development and Ecology

Once the certificate of alignment is issued, BuildCo. can request the land use license, building use license, official number and construction license from the Secretariat for Urban Development and Ecology.

The fee for this procedure:

-For building use license: MXN 2.80*(Unidad de Medida de Actualizacion-UMA)

5 Receive inspection prior to issuing the land use license, building use license, official number and construction license

Agency : Secretariat for Urban Development and Ecology

Prior to the issuance of the building permit, there is a site visit to verify the conditions of the property. The inspection is scheduled at the time of the application for licenses of land use, building use and construction.

1 day

no charge

The procedure is legislated in Art. 351 of the Law of Urban Development of the State of Nuevo

Leon.

-For soil use license: MXN 33.6*(Unidad de Medidad de Actualizacion-UMA)

1 day MXN 6,093

6 Receive land use license, building use license, official number and construction license

Agency : Secretariat for Urban Development and Ecology

Through a unique form issued by the City of Monterrey, the official number that corresponds to the property is provided, in addition to the permitted and prohibited uses at the site. The authorization of the construction of a new building on the premises is also provided.

40 days

MXN 72,958

The following documents must be presented:

Application form;
Document proving ownership;
Proof of payment of property tax;
Professional license and responsive letter signed by the DRO;
4 photographs of the exterior of the property;
Drawings of the draft;
Architectural plans of the project in physical and AutoCAD 2004 format;
Evidence of alignment;
Soil mechanics and technical report of the proyect;
Policy of liability insurance;
Approval of Municipal Civil Protection;
Proof of payment of fees.

The procedure is legislated in Art. 11 of the Zoning and Land Use Rules of the Municipality of Monterrey, Nuevo Leon and Arts. 17 and 20 of the Building Rules of the City of Monterrey, Nuevo León. The basis of the cost is in Art. 52, Section I, Subsection A, Art. 52- BIS, Section II, Paragraph E, Section III, Paragraph E and Art. 55 of the Finance Act for the Municipalities of the State of Nuevo León.

The fee for this procedure is:

-For the issuance of various certificates and certifications: 3.5*daily minimun wage (Unidad de Medida de Actualizacion-UMA)

-For building industrial constructions: 0.1022*UMA*sq. meters

-Additionally, a complementary amount due (larger than 1,000 sq. meters): 0.532*UMA*sq. meters

-For the land use license, for land area (between 500 and 1,000 sq. meters): 33.60*UMA

-For the building license, per unit of construction or housing (larger than 1,000 sq. meters): 41*UMA

-When requested directly by the owner of the property, the assignment of the official number will be made when the construction plans are presented for approval

before the competent municipal authority, covering the amount of: 1.24*UMA

Agency : Institute for registry and Cadastral Filing of Nuevo Leon

BuildCo must update the cadastral information of the property (surface and value) before beginning construction.

The following documents must be presented:

Application form
Official property plan approved by the municipal authority
Proof of payment of the property tax
Land use license
Title deed
Power of attorney of the legal representative
Identification document of the person submitting the application
Payment of the corresponding fees

The procedure is regulated in Arts. 9, 22, and 31 bis 1 of the Cadastral Law of the State of Nuevo León and Arts. 12, 14, 25, 26, 29, 31 and 21 of the regulations of the Cadastral Law of the State of Nuevo León.

8 Request and obtain feasibility study for water and drainage services from the Water and Drainage Services of Monterrey (SADM)

Agency : Water and Drainage Services of Monterrey (SADM)

It is the process that confirms the possibility of providing a potable water and sewer service connection in a certain area of the city. BuildCo must visit any commercial office the SADM at the Costumer Service Section and request the feasibility to contract the service.

21 days

no charge

To perform the procedure, BuildCo must submit:

Unique form to request the service;
Sketch of the location.

The procedure is legislated in Articles 6, 9 and34 of Ley de Agua Potable y Saneamiento para el Estado de Nuevo León, as well as Articles 2 and 14 of Ley que Crea la Institución Pública Descentralizada Servicios de Agua y Drenaje de Monterrey.

The cost is regulated by Art. 277, Section V of the Finance Law of the State of Nuevo León.

6 days MXN 45,429

9 Obtain excavation permit from the Secretariat of Public Services (Technical Department, Permit Coordination)

Agency : Secretariat of Public Services (Technical Department, Permit Coordination) This permit allows BuildCo to conduct any excavation of the road to install the pipes. The

pavement must be repaired to its initial status after the completion of the work.

5 days

MXN 84,630

To obtain the permit, BuildCo must submit:

Communication addressed to the Technical Director;
Proof of payment of property tax;
Copy of the constitution;
Official identification of the legal representative;
Work project;
Work program;
Copy of professional license and identification of the DRO;
Payment of fees;
Escrow;
Feasibility of water and drainage.

The fee for this procedure is:

-Permit for the underground introduction of any type of drivers for goods of common use (water): 7*daily minimun wage (Unidad de Medida de Actualizacion-UMA)

-Multiplied by linear meters to the main network: *150

10 Request and connect to water and drainage services at the Water and Drainage Services of Monterrey (SADM)

Agency : Water and Drainage Services of Monterrey (SADM) BuildCo must submit the following:

Document proving ownership;
Official identification of the legal representative;
Articles of incorporation;
Land use permit;
Building permit;
Registration of wastewater discharge;
Architectural plan.

The procedure is legislated in Art. 42 of the Finance Act for the Municipalities of Nuevo Leon and Art. 31 of the Building Code of the City of Monterrey, Nuevo León. The basis of the cost is in the Second Agreement, Title Services Water and Sewerage of Monterrey, IPD Meter Installation Fees for Connection and Service Standards Reinstalling Meter; Official Gazette no. 147.

The fee for this procedure is:

-For the infrastructure contribution: MXN 8,844.2

-For water connection: MXN 9,140

-For drain connection: MXN 9,350

-For the meter and installation: MXN 1,750

11 Submit completion of construction work report (oficio de obra terminada) and request stamp by the Secretariat for Urban Development and Ecology

Agency : Secretariat for Urban Development and Ecology

BuildCo or the Responsible of Construction works (Responsable de Obra) must provide a final report to the Secretariat for Urban Development and Ecology which certifies that the construction work was executed under his supervision, complying with the rules and following what was authorized.

1 day

no charge

BuildCo or the Responsible of Construction Works must submit the following:

Application form;
Proof of payment of property tax;
Responsive letter and copy of the professional license of the DRO;
2 original and 1 copy of the flat plane of history;
Approval of civil protection;
Articles of incorporation.
Approved building license

Payment is then made to obtain the stamp.

The procedure is legislated in Art. 123 of the Building Code the City of Monterrey, Nuevo León. Moreover the obligations corresponding to the "Responsable de Obra" can be found in Art. 12 of the Building Code

It is assumed that the average water need is 662 liters/day and the average wastewater flow is 568 liters/day. A diameter of 1 inch for the drinking water connection and 4 inches for the drain connection are also assumed. Connection costs include labor, materials and costs of repaving.

21 days MXN 29,084

12 Receive final inspection from the Secretariat for Urban Development and Ecology

Agency : Secretariat for Urban Development and Ecology

A final inspection is carried out to verify that the warehouse has been built in accordance with the regulations and the approved plans. The inspection is scheduled at the time of the notification of the completion of the construction.

1 day

no charge

The procedure is legislated in Art. 351 of the Urban Development Law of the State of Nuevo Leon.

13 Obtain certificate of completion of construction work from the Secretariat for Urban Development and Ecology

Agency : Secretariat for Urban Development and Ecology

Once the final report is revised and the appropriate fees are paid, the Secretariat for Urban Development and Ecology will issue the certificate of completion, certifying that the warehouse is built in accordance with existing regulations and approved plans.

The procedure is legislated in Art. 123 of the Building Code of the City of Monterrey, Nuevo León. The basis of the cost is in Art. 52-BIS, Section VIII of the Finance Act for the Municipalities of Nuevo León.

-For the issuance of various certificates and certifications: 3.5*daily minimun wage (Unidad de Medida de Actualizacion-UMA)

Details – Dealing with Construction Permits in Monterrey – Measure of Quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

Submitting all relevant documents and obtaining all necessary clearances and permits
Completing all required notifications and receiving all necessary inspections
Obtaining external installation works and possibly purchasing material for these works
Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

Is at least 1 calendar day
Each procedure starts on a separate day
Does not include time spent gathering information
Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)
Duration and frequency of power outages (0–3)
Tools to monitor power outages (0–1)
Tools to restore power supply (0–1)
Regulatory monitoring of utilities’ performance (0–1)
Financial deterrents limiting outages (0–1)
Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:
- Is owned by a local entrepreneur and is used for storage of goods.
- Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
- Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.
- Is a new construction and is being connected to electricity for the first time.
- Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).
  
  The electricity connection:
- Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
- Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.
- Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.
  
  The monthly consumption:
- It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
- If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
- Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.
Price of electricity (cents per kilowatt-hour)*
Price based on monthly bill for commercial warehouse in case study

Getting Electricity – Mexico City

City Covered

Mexico City

Price of electricity (US cents per kWh) 17.0

Indicator

Mexico City

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Procedures (number)

7

5.5

4.4

3 (28 Economies)

Cost (% of income per capita)

281.3

407.2

61.0

0.0 (3 Economies)

Time (days) 112 66.8 74.8 18 (3 Economies)

Figure – Getting Electricity in Mexico City – Score

Reliability of supply and transparency of tariff index (0-8) 7 4.4 7.4 8 (26 Economies)

33.3

96.5

87.5

Procedures

59.1

Time

Cost

Reliability of supply and transparency of tariff index

Figure – Getting Electricity in Mexico City and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

0 100

85.7: Chile (Rank: 39)

82.2: United States (Rank: 64)

81.0: Monterrey

76.3: Colombia (Rank: 82)

72.8: Brazil (Rank: 98)

69.1: Mexico City

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Mexico City – Procedure, Time and Cost

Time (days) Cost (% of income per capita)

300

100

Time (days)

80

60

40

20

250

Cost (% of income per capita)

200

150

100

50

0 0

1 2 * 3 4 5 * 6 7

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures

Page 31

reflected here, see the summary below.

Figure – Getting Electricity in Mexico City and comparator economies – Measure of Quality

7

7

7

7

6 6

4.4

8

7

Index score

6

5

4

3

2

1

0

Mexico City

Brazil Chile Colombia United States

Monterrey Latin

America & Caribbean

Details – Getting Electricity in Mexico City – Procedure, Time and Cost

No. Procedures Time to Complete Associated Costs

1 Request feasibility study from CFE Distribución

Agency : Comisión Federal de Electricidad (CFE Distribución)

The client request a feasibility study to the Comisión Federal de Electricidad (CFE). The energy demand and a sketch of the localization of the warehouse are requested by the CFE.

5 calendar days MXN 0

2 Hire electrical contractor to design connection and submit plans to CFE Distribución for approval

Agency : Comisión Federal de Electricidad (CFE Distribución)

Once the feasibility of the project has been confirmed by Comisión Federal de Electricidad (CFE), the clients electrical contractor obtains the design specifications from CFE, prepares the design of the electrical works needed to carry out the connection on the basis of these specifications and awaits approval of the plans from CFE.

18 calendar days MXN 0

3 Receive technical inspection by CFE Distribución for design approval

Agency : Comisión Federal de Electricidad (CFE Distribución)

This external inspection is necessary to validate the design of the connection works.

1 calendar day MXN 0
Obtain permit from municipality for external works

Agency : Municipality district, Public Works Secretary and Civil Protection Secretary

The customer or the electrical contractor obtains the authorization from the Municipality to carry out the connection works in public land. Authorizations from the Public Works Secretary and from the Civil Protection Secretary are also needed.

65 calendar days MXN 2,620
Await completion of external works by electrical contractor

Agency : Comisión Federal de Electricidad (CFE Distribución)

The installation of the transformer substation and the external connection works are the responsibility of the customer, who can choose to hire a private contractor to do the works.
Obtain approval of internal wiring installation from specialized firm

Agency : Empresa privada

The monitoring of the internal wiring installations is done by a specialized firm (Unidad de Verificación de Instalaciones Eléctricas ) which is responsible for checking that the wiring was done according to Mexican standards.

The applicant must go to a Unidad de Verificación de Instalaciones Eléctricas (UVIE), accredited with the Entidad Mexicana de Acreditamiento (EMA) and registered with the Ministry of Energy (Secretaria de Energia). The firm will verify that the electrical installation meets the safety standards established in NOM-001-SEDE 2012; the UVIE also oversees the external work that is performed by the client (construction of the electrical substation).

A certificate issued at the end of the inspection is needed by the time the supply contract is signed. This procedure may be performed simultaneously with other procedures. The costs associated with this procedure are determined by the Unidad Verificadora and the applicant. If the wiring is done within the provisions of the Mexican Standards, usually one inspection is sufficient to issue the approval (Dictamen de Verificación), but if the applicant did not perform its electrical work within the rules, then the Unidad Verificadora must make several visits to ensure that the wiring corresponds to the standards.

Link to http://www.sener.gob.mx/webSener/portal/index.jsp?id=120

20 calendar days MXN 475,000

2 calendar days MXN 25,000

7 Sign supply contract, pay security deposit and await meter installation by CFE Distribución

Agency : Comisión Federal de Electricidad (CFE Distribución)

At the signing of the contract for providing electrical service connection the certificate of verification for the internal wiring installation must be submitted. The process of signing the supply contract is done after the security deposit has been paid for. Payment is made at the offices of the company. It is possible to settle the security deposit with a bank guarantee.

The meter installation is done by the Área comercial which coordinates with the Departamento de Distribuccion.

Takes place simultaneously with previous procedure.

4 calendar days MXN 8,585.08

Details – Getting Electricity in Mexico City – Measure of Quality

Answer

Reliability of supply and transparency of tariff index (0-8) 7

System average interruption duration index (SAIDI) 0.6

Total duration and frequency of outages per customer a year (0-3) 3

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0

System average interruption frequency index (SAIFI) 0.9

Does the distribution utility use automated tools to monitor outages? Yes

Mechanisms for monitoring outages (0-1) 1

Does the distribution utility use automated tools to restore service? Yes

Mechanisms for restoring service (0-1) 1

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes

Regulatory monitoring (0-1) 1

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? No

Financial deterrents aimed at limiting outages (0-1) 0

Are effective tariffs available online? Yes

Communication of tariffs and tariff changes (0-1) 1

Link to the website, if available online https://app.cfe.mx/Aplicaci

Are customers notified of a change in tariff ahead of the billing cycle? Yes

ones/CCFE/Tarifas/Tarifas CREIndustria/Tarifas/Gran DemandaMTO.aspx

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Standardized Connection

Name of utility Comisión Federal de Electricidad (CFE Distribución)

Getting Electricity – Monterrey

City Covered Monterrey

Price of electricity (US cents per kWh) 13.9

Indicator

Monterrey

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Procedures (number)

5.5

4.4

3 (28 Economies)

Cost (% of income per capita)

182.0

407.2

61.0

0.0 (3 Economies)

Time (days) 44 66.8 74.8 18 (3 Economies)

Figure – Getting Electricity in Monterrey – Score

Reliability of supply and transparency of tariff index (0-8) 7 4.4 7.4 8 (26 Economies)

50.0

97.8

87.5

Procedures

88.7

Time

Cost

Reliability of supply and transparency of tariff index

Figure – Getting Electricity in Monterrey and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

0 100

85.7: Chile (Rank: 39)

82.2: United States (Rank: 64)

81.0: Monterrey

76.3: Colombia (Rank: 82)

72.8: Brazil (Rank: 98)

69.1: Mexico City

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Monterrey – Procedure, Time and Cost

Time (days) Cost (% of income per capita)

Time (days)

180

Cost (% of income per capita)

160

140

120

100

15 60

10 40

5 20

0 0

1 2 * 3 4 * 5 6

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

reflected here, see the summary below.

Figure – Getting Electricity in Monterrey and comparator economies – Measure of Quality

6 6

4.4

Index score

Monterrey Brazil Chile Colombia United

States

Mexico City

Latin America & Caribbean

Details – Getting Electricity in Monterrey – Procedure, Time and Cost

No. Procedures Time to Complete Associated Costs

Request feasibility study from CFE Distribución

Agency : Comisión Federal de Electricidad (CFE Distribución)

The client request a feasibility study to the Comisión Federal de Electricidad (CFE). The energy demand and a sketch of the localization of the warehouse are requested by the CFE.

10 calendar days MXN 0
Hire electrical contractor to design connection and submit plans to CFE for approval

Agency : Comisión Federal de Electricidad (CFE Distribución)

Once the feasibility of the project has been confirmed by Comisión Federal de Electricidad (CFE), the clients electrical contractor obtains the design specifications from CFE, prepares the design of the electrical works needed to carry out the connection on the basis of these specifications and awaits approval of the plans from CFE.

10 calendar days MXN 0
Receive technical inspection by CFE Distribución for design approval

Agency : Comisión Federal de Electricidad (CFE Distribución)

This external inspection is necessary to validate the design of the connection works.
1. calendar day MXN 0
Await completion of external works by electrical contractor

Agency : Electrical contractor

Obtain approval of internal wiring installation by specialized firm

Agency : Private company

2 calendar days

MXN 25,000

The installation of the transformer substation and the external connection works are the responsibility of the private contractor hired by the client

20 calendar days MXN 300,000

6 Sign supply contract, pay security deposit and await meter installation by CFE Distribución

Agency : Comisión Federal de Electricidad (CFE Distribución)

4 calendar days MXN 5,802.44

Takes place simultaneously with previous procedure.

Details – Getting Electricity in Monterrey – Measure of Quality

Answer

Reliability of supply and transparency of tariff index (0-8) 7

System average interruption duration index (SAIDI) 0.4

Total duration and frequency of outages per customer a year (0-3) 3

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0

System average interruption frequency index (SAIFI) 0.4

Does the distribution utility use automated tools to monitor outages? Yes

Mechanisms for monitoring outages (0-1) 1

Does the distribution utility use automated tools to restore service? Yes

Mechanisms for restoring service (0-1) 1

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes

Regulatory monitoring (0-1) 1

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? No

Financial deterrents aimed at limiting outages (0-1) 0

Are effective tariffs available online? Yes

Communication of tariffs and tariff changes (0-1) 1

Link to the website, if available online http://app.cfe.gob.mx/Apli

Are customers notified of a change in tariff ahead of the billing cycle? Yes

caciones/CCFE/Tarifas/Ta rifas/tarifas_industria.asp

Note:

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Procedures to legally transfer title on immovable property (number)

Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)
Registration procedures in the economy's largest business city.
Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)
Does not include time spent gathering information
Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of property value)
Official costs only (such as administrative fees, duties and taxes).
Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)
Reliability of infrastructure index (0-8)
Transparency of information index (0–6)
Geographic coverage index (0–8)
Land dispute resolution index (0–8)
Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

Are limited liability companies (or the legal equivalent).
Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Are 100% domestically and privately owned.
Perform general commercial activities.

The property (fully owned by the seller):
Has a value of 50 times income per capita, which equals the sale price.
Is fully owned by the seller.
Has no mortgages attached and has been under the same ownership for the past 10 years.
Is registered in the land registry or cadastre, or both, and is free of title disputes.
Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.
Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.
Will not be subject to renovations or additional construction following the purchase.
Has no trees, natural water sources, natural reserves or historical monuments of any kind.
Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.
Has no occupants, and no other party holds a legal interest in it.

Indicator

Mexico City

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Procedures (number)

7.4

4.7

1 (5 Economies)

Registering Property – Mexico City

Cost (% of property value)

6.2

5.9

4.2

0.0 (Saudi Arabia)

Time (days) 42 63.7 23.6 1 (2 Economies)

Figure – Registering Property in Mexico City – Score

Quality of the land administration index (0-30) 16.0 12.0 23.2 None in 2018/19

41.7

80.4

58.4

53.3

Procedures

Time

Cost

Quality of the land administration index

Figure – Registering Property in Mexico City and comparator economies – Ranking and Score

DB 2020 Registering Property Score

0 100

76.9: United States (Rank: 39)

71.2: Colombia (Rank: 62)

: Chile (Rank: 63)

69.0: Monterrey

58.4: Mexico City

54.1: Brazil (Rank: 133)

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Mexico City – Procedure, Time and Cost

Time (days) Cost (% of property value)

Cost (% of property value)

35 6

30 5

Time (days)

25 4

5 1

0 0

1 * 2 * 3 * 4 * 5 6 7 8

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Mexico City and comparator economies – Measure of Quality

16.0

16.3

16.5

17.6

17.5

14.0

12.0

Index score

Mexico City

Brazil Chile Colombia United States

Monterrey Latin

America & Caribbean

Details – Registering Property in Mexico City – Procedure, Time and Cost

The notary obtains a non-encumbrance certificate

Agency : Public Registry of Property of Ciudad de Mexico ("Registro Público de la Propiedad y del Comercio de la Ciudad de México")

Pursuant to article 3016 of the Civil Code for the Federal District, the notary before whom the transfer deed is being formalized must request a non-encumbrance certificate to the Public Registry. This request also acts as the mandatory pre-preventive notice (aviso preventivo) to the

Public Registry, which suspends any inscription on the corresponding property for 60 days.

7 days

MXN 623; (MXN 623.00

(Regular – 7 days) MXN 1,246.00 (Urgent – 1-2

days) (Article 198 I(a) of

the Fiscal Code).)

The applicant must submit before the Public Registry of Property and Commerce the following documentation:

Application for request in triplicate, including the name and signature of the of the applicant, term of the certificate, location of the property and real estate folio.
Proof of payment of fees established in article 198, section I of the Fiscal Code of Mexico City in duplicate.
The application for request may also be made online, as well as the payment of fees.

This procedure can be done online at the following website: http://data.consejeria.cdmx.gob.mx/index.php/dgrppyc/certificado-de-existencia-o-inexistencia-de- gravamenes

No.

Procedures

Time to Complete

Associated Costs

The notary requests a commercial valuation of the property

Agency : Licensed valuer

A commercial valuation is required under the Fiscal Code of the Federal District to determine the taxable value of the property subject to transfer. Article 116 of the Fiscal Code of the Federal District establishes that the property tax shall be calculated taking in to account the highest of (i) the purchase price, (ii) the cadastral value, and (iii) the value resulting from the commercial valuation by the fiscal authorities or authorized appraiser.

The notary obtains the Zoning Certificate of the property

Agency : Ministry of Housing and Urban Development of Ciudad de Mexico (Secretaría de Desarrollo Urbano y Vivienda de la Ciudad de Mexico or SEDUVI)

The Public Registry of Property and Commerce requires a zoning certificate of the property to be attached together with the application to register the property transfer. The notary shall request the zoning certificate at the Ministry of Urban Development and Housing (Secretaría de Desarrollo Urbano y Vivienda). The cost is established in article 235, section III of the Fiscal Code for the

Federal District.

6 days

MXN 1,542; (MXN

1542.00 (Article 235 III(a)

of the Fiscal Code))

The applicant must submit an original and copy, the documents below with the corresponding delegation’s single-counter service. The authority will retain only the copies.

Form TSEDUVICGDAU_CNZD_1.
Proof of payment of property taxes to date.
Proof of payment of fees.
Official identification.
Relotificaton or subdivision license, if applicable.
Street number designation and boundary alignment certificate (certificado de alineamiento y número oficial), if applicable.
Public deeds, if applicable.
Copy of the cadastre appraisal.
If the procedure is not carried out by the owner of the property, it must also submit a proxy letter or a notarized power of attorney.
Companies should submit the incorporation act, power of attorney and official ID of the legal

representative or proxy.

The notaries usually have their own appraisers. Nevertheless, the parties may hire the appraiser they choose. When banks are involved in the transaction, they will usually bring in the valuers they usually work with. Sometimes parties have a previous valuation, and the notary can have it reviewed to see if it suffices. However, these previous valuations are usually not fiscal ones and therefore another one has to be done to determine the value of the property for the ISAI tax, but also for the VAT tax to which commercial constructions are subject to when transferred (please note that the land is not taxable under VAT, just the commercial constructions).

7 days MXN 18,171.63; (0.2% of

the Property Value)

The notary obtains a certificate of good standing with the water service

Agency : Sistema de Aguas de la Ciudad de México (SACM)

Article 27 of the Fiscal Code of Mexico City establishes that the interested parties shall provide the notary evidence that the property subject to transfer has no outstanding debts to the water supply provider and property tax. This evidence should cover any outstanding from up to five years before the date when the public deed of sale and purchase is signed.

Less than one day,

online

MXN 167; (MXN 167.00

(Article 248 VIII of the Fiscal Code))

In January 2016, a new online platform was introduced to complete this procedure online (http://www.finanzas.df.gob.mx). In order to request this information ("constancia de adeudo de aguas"), the petitioner only has to submit the water utility Account Number associated with the property to the system and pay the corresponding fee of MXN 158.70. The certificate is valid for a

period of 2 months.

5 The notary checks the good standing of the seller on the property tax (predial) Agency : Ministry of Finance of Ciudad de Mexico (Secretaría de Finanzas de la Ciudad de México)

The certificate of good standing of the seller on the property tax ("impuesto predial") is one of the documents to be provided by the interested parties under art. 27 of the Fiscal Code of Ciudad de Mexico; the receipts of payments of the predial (boletas) are no longer required.

Since February 2015, it has been possible to obtain this information online (http://www.finanzas.df.gob.mx). The petitioner has to submit the Cadaster Number (Cuenta Predial) in order to obtain the information of any outstanding debts of the property for the last 5 years.

Less than one day, online

MXN 167; (MXN 167 if

certificate of good standing ("constancia de no adeudo") is requested; no cost if information is checked online.)

6 The notary formalizes the sale purchase agreement

Agency : Notary

The notary public will request from the seller:

Property title (escritura), which the seller already has
Receipts evidencing the payment for real estate taxes for a period of five years (boletas del impuesto predial)
Receipts evidencing the payment of water fees for a period of five years (boletas del servicio de agua)
Public deed(s) containing the incorporation and by-laws of the seller company (escritura constitutiva), together with copy of any public deed(s) containing amendments to the by-laws of the seller company
Public deed(s) containing the powers of attorney granted in favor of the seller’s representatives (for acts of domain and acts of administration in terms of the second and third paragraph of article 2554 of the Civil Code of the Mexico City)
Copy of the official identification of the seller's and buyer's representatives

The notary will procure on behalf of the parties:
Non-encumbrance certificate (obtained in Procedure 1)
The zoning certificate (obtained in Procedure 3)
The valuation (obtained in Procedure 2)
Certificate of good standing with the water company (obtained in Procedure 4)
Certificate of good standing in the property tax (obtained in procedure 5)

The buyer is subject to pay the acquisition tax ("Impuesto sobre Adquisiciones o Transmisión de Dominio"). In this respect, on the date of execution of the real estate purchase agreement before the notary public, said notary public will retain the above mentioned taxes and pay them before Treasury Department.

The scale of notary tariffs is with respect to the Notary Publics of the Federal District only. Other Mexican states have varying scales.

The seller will also have to pay the income tax and the value added tax as follows:

The applicable Income Tax for transferors resident in Mexico is 30% on the gain (the excess of the sale price over the adjusted tax basis). The tax basis of real estates is in general terms the original cost of acquisition as updated for inflation.

The value added tax (16%) is applicable only with respect to the constructions that conform to the property and therefore an allocation of the price to the land and constructions should be made in the sales agreement based on an appraisal. The value added tax will be shifted to the buyer.

The notary public shall calculate its fees as set forth in Article 15 of the Notary Fees of the Federal District (Arancel de Notarios of March 2018), taking into account the highest of (i) the purchase price, (ii) the cadastral value, and (iii) the value resulting from the commercial valuation by the fiscal authorities or authorized appraiser.

3 days MXN 527,645.42; (MXN

475,595.71 according to the case study (Property Acquisition Tax plus Notary Fees Tax)

The Property Acquisition Tax is determined, pursuant to article 113 of the Fiscal Code of the Federal District. The Tax schedule is as follows (cumulative and progressive fee schedule):

From MXN 0.12 to MXN 98,973.75: MXN 239.95.

Rate between these amounts 0.01275.

From MXN 98,973.76 to MXN 158,375.95: MXN

1,439.53 Rate between

these amounts 0.02715 From MXN158,357.96 to MXN 237,536.70: MXN

2,972.26 Rate between

these amounts 0.03548 From MXN 237,536.71 to MXN 475,073.54: MXN

5,642.16 Rate between

these amounts 0.04139 From MXN475,073.55 to MXN 1,187,683.82: MXN

14,986.87 Rate between

these amounts 0.04598

From MXN 1,187,683.83

to MXN 2,375,367.65:

MXN 46,127.95 Rate

between these amounts 0.05023

From MXN 2,375,367.66

to MXN 4,575,934.62:

MXN 102,827.98 Rate

between these amounts 0.05449

From MXN 4,578,934.63

to MXN 11,916,496.98:

MXN 216,795.36 Rate

between these amounts 0.05667 [Applicable Rate]

From MXN 11,916,496.99

to MXN 21,975,704.18:

MXN 612,158.06 Rate

between these amounts: 0.05716

From MXN 21,975.704.19

to MXN 43,951,408.38

MXN 1,158,674.79. Rate

between these amounts 0.05767

From MXN 43,951.408.39 and up: MXN 2,363,163.15

Rate between these amounts 0.06265

Notary fees are calculated according to Art. 15 of the official Ciudad de Mexico Notary Fees schedule. The fee schedule is as follows (cumulative and regressive fee schedule):

Notary Fees as of January 18, 2019:

Page 44

7 The Notary lodges the preventive notice (aviso preventivo) at the Public Registry of Property of Ciudad de Mexico

Agency : Public Registry of Property of Mexico City ("Registro Público de la Propiedad y del Comercio de la Ciudad de México")

According to Article 3016 of the Civil Code of Mexico DF establishes that the Notary has to give a preventive notice to the Public Registry of Property during the next 48 hours after the public deed has been signed by both parties of the transaction. In practice, the Notary will fill up a specific form for the "aviso preventivo" and lodge it to the Registry the next day after the signature (sometimes even during the same say of the signature). This notice suspends any possible inscription to the property object of the transaction up to 30 days.

1 day No Cost

8 Registration of the transfer of title at the Public Registry of Property of Ciudad de Mexico Agency : Public Registry of Property of Ciudad de Mexico ("Registro Público de la Propiedad y del Comercio de la Ciudad de México")

The notary public will proceed with the registration of the first testimony of the public deed containing the formalization of the purchase agreement of a real estate and the transfer of title, before the Public Registry of Property of the Federal District. After registration, the buyer will have to give notice to the corresponding water department, and any other company that provides any service to the property (i.e. electric company, water, etc.)

30 days MXN 18,407; (MXN

18,407.00 (Article 196 ‘I’ of the Fiscal Code).)

Takes place simultaneously with previous procedure.

Details – Registering Property in Mexico City – Measure of Quality
	Answer	Score
Quality of the land administration index (0-30)		16.0
Reliability of infrastructure index (0-8)		5.0
Type of land registration system in the economy:	Deed Registration System
What is the institution in charge of immovable property registration?	Registro Público de la Propiedad y de Comercio de la Ciudad de México
In what format are past and newly issued land records kept at the immovable property registry of the largest business city of the economy —in a paper format or in a computerized format (scanned or fully digital)?	Computer/Scanned	1.0
Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)?	Yes	1.0
Institution in charge of the plans showing legal boundaries in the largest business city:	Ministry of Housing and Urban Development of Ciudad de Mexico (Secretaría de Desarrollo Urbano y Vivienda or SEDUVI)
In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business city of the economy—in a paper format or in a computerized format (scanned or fully digital)?	Computer/Fully digital	2.0
Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)?	Yes	1.0
Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases?	Separate databases	0.0
Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties?	No	0.0
Transparency of information index (0–6)		4.0
Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city?	Anyone who pays the official fee	1.0
Is the list of documents that are required to complete any type of property transaction made publicly available– and if so, how?	Yes, online	0.5
Link for online access:	The website http://data.consejeria. cdmx.gob.mx/index.p hp/dgrppyc lists all the services provided by the registry, including their costs and waiting time. For transfers: http://data.consejeria. cdmx.gob.mx/index.p hp/dgrppyc/catalogo- de-tramites- inscripcion For transfers and non encumbraces certificates: http://www.tramites.c dmx.gob.mx/index.ph p/ts/589/1:
Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how?	Yes, online	0.5
Link for online access:	http://ovica.finanzas.d f.gob.mx/Informacion Tramites.aspx

Does the agency in charge of immovable property registration agency formally commit to deliver a legally binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard?	Yes, online	0.5
Link for online access:	The website http://data.consejeria. cdmx.gob.mx/index.p hp/dgrppyc lists all the services provided by the registry, including their costs and waiting time. For transfers: http://data.consejeria. cdmx.gob.mx/index.p hp/dgrppyc/catalogo- de-tramites- inscripcion For transfers and non encumbraces certificates: http://www.tramites.c dmx.gob.mx/index.ph p/ts/589/1
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration?	No	0.0
Contact information:
Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency?	No	0.0
Number of property transfers in the largest business city in 2018:
Who is able to consult maps of land plots in the largest business city?	Anyone who pays the official fee	0.5
Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how?	Yes, online	0.5
Link for online access:	http://ovica.finanzas.d f.gob.mx/Informacion Tramites.aspx
Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and if so, how does it communicate the service standard?	Yes, online	0.5
Link for online access:	http://ovica.finanzas.d f.gob.mx/Informacion Tramites.aspx
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency?	No	0.0
Contact information:
Geographic coverage index (0–8)		2.0
Are all privately held land plots in the largest business city formally registered at the immovable property registry?	No	0.0
Are all privately held land plots in the economy formally registered at the immovable property registry?	No	0.0
Are all privately held land plots in the largest business city mapped?	Yes	2.0
Are all privately held land plots in the economy mapped?	No	0.0
Land dispute resolution index (0–8)		5.0
Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties?	Yes	1.5
Legal basis:	Articles 2322, 3007 and 3011 of the Federal District Civil Code and the Federal District Public Real Estate Registry Law

Is the system of immovable property registration subject to a state or private guarantee?	Yes	0.5
Type of guarantee:	State guarantee
Legal basis:	Articles 3009 and 3010 of the Federal District Civil Code and the Federal District Public Real Estate Registry Law
Is there a is a speciﬁc, out-of-court compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry?	No	0.0
Legal basis:
Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)?	Yes	0.5
If yes, who is responsible for checking the legality of the documents?	Registrar; Notary;
Does the legal system require verification of the identity of the parties to a property transaction?	Yes	0.5
If yes, who is responsible for verifying the identity of the parties?	Registrar; Notary;
Is there a national database to verify the accuracy of government issued identity documents?	No	0.0
What is the Court of first instance in charge of a case involving a standard land dispute between two local businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city?	Juzgado Civil of Ciudad de Mexico
How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)?	Between 1 and 2 years	2.0
Are there publicly available statistics on the number of land disputes at the economy level in the ﬁrst instance court?	No	0.0
Number of land disputes in the economy in 2018:
Equal access to property rights index (-2–0)		0.0
Do unmarried men and unmarried women have equal ownership rights to property?	Yes
Do married men and married women have equal ownership rights to property?	Yes	0.0

Indicator

Monterrey

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Procedures (number)

7.4

4.7

1 (5 Economies)

Registering Property – Monterrey

Cost (% of property value)

4.5

5.9

4.2

0.0 (Saudi Arabia)

Time (days) 23 63.7 23.6 1 (2 Economies)

Figure – Registering Property in Monterrey – Score

Quality of the land administration index (0-30) 17.5 12.0 23.2 None in 2018/19

58.3

89.5

69.9

58.3

Procedures

Time

Cost

Quality of the land administration index

Figure – Registering Property in Monterrey and comparator economies – Ranking and Score

DB 2020 Registering Property Score

0 100

76.9: United States (Rank: 39)

: Colombia (Rank: 62)

: Chile (Rank: 63)

69.0: Monterrey

58.4: Mexico City

54.1: Brazil (Rank: 133)

Figure – Registering Property in Monterrey – Procedure, Time and Cost

Time (days) Cost (% of property value)

4.5

Cost (% of property value)

3.5

Time (days)

15 3

2.5

10 2

1.5

5 1

0.5

0 0

1 * 2 3 4 5 6

Procedures (number)

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Monterrey and comparator economies – Measure of Quality

17.5

16.3

16.5

17.6

16.0

14.0

12.0

Index score

Monterrey Brazil Chile Colombia United

States

Mexico City

Latin America & Caribbean

Details – Registering Property in Monterrey – Procedure, Time and Cost

No. Procedures Time to Complete Associated Costs

The notary obtains the non-encumbrance certificate and gives the pre-preventive notice (aviso pre-preventivo) to the Public Registry (IRCNL)

Agency : Public Registry (Instituto Registral y Catastral del Estado de Nuevo León, IRCNL) The non-encumbrance certificate contains information including the description of the property and information regarding any charges, liens, mortgages or other encumbrances.

To complete the procedure the notary must present the non-encumbrance certificate form (original and copy) with the information included in the sale and purchase agreement. By presenting this form the Notary sends the mandatory pre-preventive notice on behalf of the parties as well. The pre-preventive notice serves a double purpose: (i) As a notification to the Public Registry of the intention to transfer a registered property; and (ii) as a suspension of registration of any transaction or encumbrance (such as mortgages) upon the corresponding property by any third party. This suspension lasts 45 days.

The procedure is regulated by Article 2910 of the Civil Code of the State of Nuevo León, Art. 8 Section VII and Articles 59, 61 and 63 of the Regulatory Law of the Property and Commercial Public Registry of the State of Nuevo León. The cost is regulated by Art. 271 Sections X and XII of the Finance Law of the State of Nuevo León.
days MXN 591.43; (MXN

253.47 for the non- encumbrance certificate (3 daily Unidades de Medida y Actualización or UMA) and MXN 337.96 for the pre-preventive notice (4 UMAs))

2 Obtain the cadastral value of the property from the Cadaster (Dirección de Catastro – IRCNL)

Agency : Cadaster (Dirección del Catastro – IRCNL)

The property transfer tax is calculated based on the cadastral value obtained through this procedure. The notaries can complete this procedure online through the Cadaster’s online platform receiving the response immediately. The value obtained is merely informative.

If the value is requested in person the following documents are required:
1. Application form (original and copy)
2. Receipt of payment of property tax “predial” (copy)
3. ID of the owner
4. Document identifying the applicant as the legal representative of the company (when requested on behalf of a company, copy)
5. Public deed or sale agreement (copy)
6. Receipt of payment of fees
The procedure is regulated by Art. 34 of the Regulatory Law of the Cadaster Law. The cost is regulated by Art. 276, Section III-A of the Finance Law of the State of Nuevo León.

Less than one day, online

MXN 337.96; (4 daily UMA

of MXN 84.49.)
The notary prepares and executes the public deed, and collects and pays the property transfer (ISAI) tax at the municipality

Agency : Notary

Currently there is not an official fee schedule for notary fees in Monterrey. Notaries would normally charge 1% of the property value, but is negotiable between the parties and the Notary.

To complete the payment of the property transfer tax the notary would go the municipality and present the following documents:
1. Public deed
2. Cadastral value (obtained in procedure 2)
3. Receipt of payment of property tax “predial”
4. Statement of payment

The procedure is regulated by Art. 28 Bis fo the Finance Law for the Municipalities of the State of Nuevo León. The property transfer tax is based on the highest value between the sale price or the cadastral value.

With the entry into force in July 2013 of the Federal Law for the Prevention and Identification of Operations with Illicit Resources (Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita) the notaries have to notify the Ministry of Finance (Secretaría de Hacienda y Crédito Público) if they provide services related with the transfer of a property above a certain amount.

14 days MXN 363,432.56; (3% of

the property value for the property transfer tax + 1% of the property value for notary fees)

The notary gives the preventive notice to the Public Registry (IRCNL)

Agency : Public Registry (Instituto Registral y Catastral del Estado de Nuevo León, IRCNL)

Once the deed is signed the notary gives notice to the Public Registry informing of the conclusion of the transaction. The notice will have a validity of 90 days during which this transaction will have the priority over any other recordable action on the property; otherwise, the sale will be valid from the date in which the notice is given.

1 day

MXN 337.96; (4 daily UMA

of MXN 84.49.)

To complete this procedure the notary must present the following:

Notice with the names of the parties of the transaction
The purpose of the transaction
The deed number
Signature date

The notary must bring the documentation to the Public Registry, pay the corresponding fees and receive the confirmation that the notice has been processed by the Registry. The procedure is regulated by Art. 2910 of the Civil Code of the State of Nuevo León. The cost is regulated by Art. 271, Section XII of the Finance Law of the State of Nuevo León.

5 The notary gives notice of the sale to the Cadaster (Dirección del Catastro – IRCNL)

Agency : Cadaster (Dirección del Catastro – IRCNL)

It is a common practice to update ownership at the Cadaster before starting the registration procedure at the Property Registry. In practice, the Property Registry requests proof that the Cadaster records have been updated with the new owner.

In this procedure the changes in property ownership are recorded in the cadastral registry through the notice provided by the notary. To complete this procedure the following documents are presented by the notary:

Notification of sale form (original)
Copy of the receipt of payment of the property tax (predial)
Description of the property

The notary presents the sale notice at the Tax Payer Service Department with the required documents. The documents are reviewed and processed by the corresponding department for their approval. After their evaluation the notary returns for the results of the procedure.

The deed is registered at the Public Registry (IRCNL)

Agency : Public Registry (Instituto Registral y Catastral del Estado de Nuevo León, IRCNL) To complete the registration the notary must bring the following documents:

Notarized public deed
Receipt of payment of transfer tax (ISAI)
Paymet of Income Tax d. Non-encumbrance certificate

e. Cadastral value

The notary must bring the documentation to the Public Registry and pay the corresponding fees. Once the procedure is completed the notary will come back to the registry to pick up the documentation. The cost is MXN 5 for every thousand or fraction of the property value with a minimum of 5 daily UMAs (MXN 403) and a maximum of 570 daily minimum wages (MXN 45,942).

The procedure is regulated by Art. 8, Section IV and Arts. 21, 22 and 23 of the Regulatory Law of the Commercial and Property Public Registry of the State of Nuevo León as well as by Arts. 2901, 2904 and 2910 of the Civil Code of the State of Nuevo León. The cost is regulated by Art. 271,

Section I of the Finance Law of the State of Nuevo León.

5 days

MXN 45,430; (MXN 5 for

every thousand or fraction of the property value)

In addition, the notice to the Cadastral Registry must be performed within the month that follows

the date in which the ISAI tax was paid.

The procedure is regulated by Art. 29 of the Cadastral Law and Art. 28 of the Regulatory Law of the Cadastral Law.

1 day No cost

Takes place simultaneously with previous procedure.

Details – Registering Property in Monterrey – Measure of Quality
	Answer	Score
Quality of the land administration index (0-30)		17.5
Reliability of infrastructure index (0-8)		5.0
Type of land registration system in the economy:	Deed Registration System
What is the institution in charge of immovable property registration?	Instituto Registral y Catastral del Estado de Nuevo León dependiente de la Dirección de Registro Público de la Propiedad y del Comercio
In what format are past and newly issued land records kept at the immovable property registry of the largest business city of the economy —in a paper format or in a computerized format (scanned or fully digital)?	Computer/Scanned	1.0
Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)?	Yes	1.0
Institution in charge of the plans showing legal boundaries in the largest business city:	Dirección del Catastro del Instituto Registral y Catastral del Estado de Nuevo León
In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business city of the economy—in a paper format or in a computerized format (scanned or fully digital)?	Computer/Fully digital	2.0
Is there an electronic database for recording boundaries, checking plans and providing cadastral information (geographic information system)?	Yes	1.0
Is the information recorded by the immovable property registration agency and the cadastral or mapping agency kept in a single database, in different but linked databases or in separate databases?	Separate databases	0.0
Do the immovable property registration agency and cadastral or mapping agency use the same identification number for properties?	No	0.0
Transparency of information index (0–6)		3.5
Who is able to obtain information on land ownership at the agency in charge of immovable property registration in the largest business city?	Anyone who pays the official fee	1.0
Is the list of documents that are required to complete any type of property transaction made publicly available– and if so, how?	Yes, online	0.5
Link for online access:	http://nl.gob.mx/depe ndencias/irc/servicios http://www.nl.gob.mx/ servicios/traslacion- de-dominio-0
Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable property registration in the largest business city made publicly available–and if so, how?	Yes, online	0.5
Link for online access:	http://nl.gob.mx/depe ndencias/irc/servicios http://www.nl.gob.mx/ servicios/traslacion- de-dominio-0
Does the agency in charge of immovable property registration agency formally commit to deliver a legally binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard?	Yes, online	0.5
Link for online access:	http://nl.gob.mx/depe ndencias/irc/servicios http://www.nl.gob.mx/ servicios/traslacion- de-dominio-0

Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration?	No	0.0
Contact information:
Are there publicly available official statistics tracking the number of transactions at the immovable property registration agency?	No	0.0
Number of property transfers in the largest business city in 2018:
Who is able to consult maps of land plots in the largest business city?	Only intermediaries and interested parties	0.0
Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how?	Yes, online	0.5
Link for online access:	http://www.nl.gob.mx/ servicios/copia-de- plano-de-terreno
Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and if so, how does it communicate the service standard?	Yes, online	0.5
Link for online access:	http://www.nl.gob.mx/ servicios/copia-de- plano-de-terreno
Is there a speciﬁc and independent mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency?	No	0.0
Contact information:
Geographic coverage index (0–8)		4.0
Are all privately held land plots in the largest business city formally registered at the immovable property registry?	Yes	2.0
Are all privately held land plots in the economy formally registered at the immovable property registry?	No	0.0
Are all privately held land plots in the largest business city mapped?	Yes	2.0
Are all privately held land plots in the economy mapped?	No	0.0
Land dispute resolution index (0–8)		5.0
Does the law require that all property sale transactions be registered at the immovable property registry to make them opposable to third parties?	Yes	1.5
Legal basis:	Ley Reglamentaria del Registro Público de la propiedad y Comercio of 1972 (amended in 2010) and articles 2210 through 2216, 2895 of the Civil Code
Is the system of immovable property registration subject to a state or private guarantee?	Yes	0.5
Type of guarantee:	State guarantee
Legal basis:	Ley Reglamentaria del Registro Público de la propiedad y Comercio (1972, amended 2010) and article 2206 of the Civil Code
Is there a is a speciﬁc, out-of-court compensation mechanism to cover for losses incurred by parties who engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry?	No	0.0
Legal basis:
Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., checking the compliance of contracts with requirements of the law)?	Yes	0.5
If yes, who is responsible for checking the legality of the documents?	Registrar; Notary;

Does the legal system require verification of the identity of the parties to a property transaction?	Yes	0.5
If yes, who is responsible for verifying the identity of the parties?	Notary;
Is there a national database to verify the accuracy of government issued identity documents?	No	0.0
What is the Court of first instance in charge of a case involving a standard land dispute between two local businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located in the largest business city?	First instance Civil Court
How long does it take on average to obtain a decision from the first-instance court for such a case (without appeal)?	Between 1 and 2 years	2.0
Are there publicly available statistics on the number of land disputes at the economy level in the ﬁrst instance court?	No	0.0
Number of land disputes in the economy in 2018:
Equal access to property rights index (-2–0)		0.0
Do unmarried men and unmarried women have equal ownership rights to property?	Yes
Do married men and married women have equal ownership rights to property?	Yes	0.0

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Strength of legal rights index (0–12)

Rights of borrowers and lenders through collateral laws (0-10)
Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)
Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)
Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)
Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

ABC is a domestic limited liability company (or its legal equivalent).
ABC has up to 50 employees.
ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Indicator

Mexico City

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Strength of legal rights index (0-12)

5.3

6.1

12 (5 Economies)

Getting Credit – Mexico City

Credit registry coverage (% of adults)

0.0

14.6

24.4

100.0 (2 Economies)

Depth of credit information index (0-8) 8 5.1 6.8 8 (53 Economies)

Figure – Getting Credit in Mexico City – Score

90.0

Credit bureau coverage (% of adults) 100.0 47.6 66.7 100.0 (14 Economies)

Score – Getting Credit

Figure – Getting Credit in Mexico City and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

0 100

95.0: United States (Rank: 4)

90.0: Colombia (Rank: 11)

90.0: Mexico City

90.0: Monterrey

55.0: Chile (Rank: 94)

50.0: Brazil (Rank: 104)

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Mexico City and comparator economies

5.3

Index Score

Mexico City

Brazil Chile Colombia

United States

Monterrey Latin

America & Caribbean

Details – Legal Rights in Mexico City

Strength of legal rights index (0-12) 10

Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description

of collateral?

Yes

Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable assets exist in the economy?

Yes

May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the

original assets?

Yes

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral?

Yes

Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an

electronic database indexed by debtor's name?

Yes

Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered?

Yes

Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party?

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? No

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No

Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt?

Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it?

Yes

Figure – Credit Information in Mexico City and comparator economies

7 7

5.1

Index Score

Mexico City

Brazil Chile Colombia United States

Monterrey Latin

America & Caribbean

Details – Credit Information in Mexico City

Depth of credit information index (0-8)

Credit bureau

Credit registry

Score

Are data on both firms and individuals distributed?

Yes

Are data from retailers or utility companies – in addition to data from banks and

financial institutions – distributed?

Yes

Are both positive and negative credit data distributed? Yes No 1

Are data on loan amounts below 1% of income per capita distributed?

Yes

Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.)

Yes No 1

By law, do borrowers have the right to access their data in the credit bureau or credit registry?

Yes No 1

Can banks and financial institutions access borrowers’ credit information online (for example, through an online platform, a system-to-system connection or both)?

Yes No 1

Are bureau or registry credit scores offered as a value-added service to help banks and financial institutions assess the creditworthiness of borrowers?

Yes No 1

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Coverage	Credit bureau	Credit registry
Number of individuals	100,200,000	0
Number of firms	5,922,000	0
Total	106,122,000	0
Percentage of adult population	100.0	0.0

Indicator

Monterrey

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Strength of legal rights index (0-12)

5.3

6.1

12 (5 Economies)

Getting Credit – Monterrey

Credit registry coverage (% of adults)

0.0

14.6

24.4

100.0 (2 Economies)

Depth of credit information index (0-8) 8 5.1 6.8 8 (53 Economies)

Figure – Getting Credit in Monterrey – Score

90.0

Credit bureau coverage (% of adults) 100.0 47.6 66.7 100.0 (14 Economies)

Score – Getting Credit

Figure – Getting Credit in Monterrey and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

0 100

95.0: United States (Rank: 4)

90.0: Colombia (Rank: 11)

90.0: Mexico City

90.0: Monterrey

55.0: Chile (Rank: 94)

50.0: Brazil (Rank: 104)

Figure – Legal Rights in Monterrey and comparator economies

5.3

Index Score

Monterrey Brazil Chile Colombia

United States

Mexico City

Latin America & Caribbean

Details – Legal Rights in Monterrey

Strength of legal rights index (0-12) 10

Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description

of collateral?

Yes

May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the

original assets?

Yes

Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral?

Yes

Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an

electronic database indexed by debtor's name?

Yes

Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes

Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party?

Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? No

Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No

Yes

Figure – Credit Information in Monterrey and comparator economies

7 7

5.1

Index Score

Monterrey Brazil Chile Colombia United

States

Mexico City

Latin America & Caribbean

Details – Credit Information in Monterrey

Depth of credit information index (0-8)

Credit bureau

Credit registry

Score

Are data on both firms and individuals distributed?

Yes

Are data from retailers or utility companies – in addition to data from banks and

financial institutions – distributed?

Yes

Are both positive and negative credit data distributed? Yes No 1

Are data on loan amounts below 1% of income per capita distributed?

Yes

Yes No 1

By law, do borrowers have the right to access their data in the credit bureau or credit registry?

Yes No 1

Can banks and financial institutions access borrowers’ credit information online (for example, through an online platform, a system-to-system connection or both)?

Yes No 1

Are bureau or registry credit scores offered as a value-added service to help banks and financial institutions assess the creditworthiness of borrowers?

Yes No 1

Coverage	Credit bureau	Credit registry
Number of individuals	100,200,000	0
Number of firms	5,922,000	0
Total	106,122,000	0
Percentage of adult population	100.0	0.0

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions
Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal remedies (damages, disgorgement of profits, disqualification

from managerial position(s) for one year or more, rescission of the transaction)
Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices
Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions
Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment
Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects
Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices
Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

Is a publicly traded corporation listed on the economy’s most important stock exchange.
Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speciﬁcally required by law.
Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.
Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.
Is a manufacturing company with its own distribution network.

The transaction involves the following details:
Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s ﬁve-member board.
Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.
Mr. James proposes that Buyer purchase Seller’s unused ﬂeet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.
The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.
Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.
The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Protecting Minority Investors – Mexico City

Stock exchange information
Stock exchange		Bolsa Mexicana de Valores
Stock exchange URL		http://www.bmv.com.mx
Listed firms with equity securities		134
City Covered		Mexico City
Indicator	Mexico City	Latin America & Caribbean	OECD high income	Best Regulatory Performance
Extent of disclosure index (0-10)	8.0	4.1	6.5	10 (13 Economies)
Extent of director liability index (0-10)	5.0	5.2	5.3	10 (3 Economies)
Ease of shareholder suits index (0-10)	5.0	6.7	7.3	10 (Djibouti)
Extent of shareholder rights index (0-6)	5.0	3.0	4.7	6 (19 Economies)
Extent of ownership and control index (0-7)	5.0	2.3	4.5	7 (9 Economies)
Extent of corporate transparency index (0-7)	3.0	2.3	5.7	7 (13 Economies)

Figure – Protecting Minority in Mexico City – Score

62.0

Score – Protecting Minority Investors

Figure – Protecting Minority Investors in Mexico City and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

100

80.0: Colombia (Rank: 13)

71.6: United States (Rank: 36)

66.0: Chile (Rank: 51)

62.0: Brazil (Rank: 61)

62.0: Mexico City

62.0: Monterrey

0

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conﬂict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in Mexico City and comparator economies – Measure of Quality

Mexico City 3 5 8

Brazil 6 8

Chile 2 6 8

Colombia 5 7

Monterrey 3 5 8

United States 5 9

5 5 5

5 4 4 4

4 6 7

9 7 4 8

5 5 5

7 3 2 9

OECD high income

Latin America & Caribbean

2.5

5.6

5.4

5.6

4.4

2.5

6.6

3.2

4.3

6.5

4.5

7.4

0 5 10 15 20 25 30 35 40 45

Sub-Indicator Score

Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10)

Details – Protecting Minority Investors in Mexico City – Measure of Quality
	Answer	Score
Extent of conflict of interest regulation index (0-30)
Extent of disclosure index (0-10)		8.0
Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3)	Board of directors excluding interested members	2.0
Must an external body review the terms of the transaction before it takes place? (0-1)	Yes	1.0
Must Mr. James disclose his conflict of interest to the board of directors? (0-2)	Existence of a conflict without any specifics	1.0
Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2)	Disclosure on the transaction and on the conflict of interest	2.0
Must Buyer immediately disclose the transaction to the public? (0-2)	Disclosure on the transaction and on the conflict of interest	2.0
Extent of director liability index (0-10)		5.0
Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Buyer? (0-1)	Yes	1.0
Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2)	Liable if unfair or prejudicial	2.0
Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2)	Liable if negligent	1.0
Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1)	Yes	1.0
Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1)	No	0.0
Is Mr. James disqualified upon a successful claim by shareholders? (0-1)	No	0.0
Can a court void the transaction upon a successful claim by shareholders? (0-2)	Only in case of fraud or bad faith	0.0
Ease of shareholder suits index (0-10)		5.0
Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? (0-1)	Yes	1.0
Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3)	Documents that directly prove specific facts in the plaintiff’s claim	2.0
Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1)	No	0.0
Can the plaintiff directly question the defendant and witnesses at trial? (0-2)	Preapproved questions only	1.0
Is the level of proof required for civil suits lower than that of criminal cases? (0-1)	No	0.0
Can shareholder plaintiffs recover their legal expenses from the company? (0-2)	Yes if successful	1.0
Extent of shareholder governance index (0-20)
Extent of shareholder rights index (0-6)		5.0
Does the sale of 51% of Buyer's assets require shareholder approval?	Yes	1.0
Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders?	Yes	1.0
Must Buyer obtain its shareholders’ approval every time it issues new shares?	Yes	1.0
Do shareholders automatically receive preemption rights every time Buyer issues new shares?	Yes	1.0
Do shareholders elect and dismiss the external auditor?	No	0.0
Are changes to the rights of a class of shares only possible if the holders of the affected shares approve?	Yes	1.0

Extent of ownership and control index (0-7)		5.0
Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors?	No	0.0
Must the board of directors include independent and nonexecutive board members?	Yes	1.0
Can shareholders remove members of the board of directors without cause before the end of their term?	Yes	1.0
Must the board of directors include a separate audit committee exclusively comprising board members?	Yes	1.0
Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer?	Yes	1.0
Must Buyer pay declared dividends within a maximum period set by law?	No	0.0
Is a subsidiary prohibited from acquiring shares issued by its parent company?	Yes	1.0
Extent of corporate transparency index (0-7)		3.0
Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%?	No	0.0
Must Buyer disclose information about board members’ primary employment and directorships in other companies?	Yes	1.0
Must Buyer disclose the compensation of individual managers?	No	0.0
Must a detailed notice of general meeting be sent 21 days before the meeting?	No	0.0
Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda?	No	0.0
Must Buyer's annual financial statements be audited by an external auditor?	Yes	1.0
Must Buyer disclose its audit reports to the public?	Yes	1.0

Protecting Minority Investors – Monterrey

Stock exchange information
Stock exchange		Bolsa Mexicana de Valores
Stock exchange URL		http://www.bmv.com.mx
Listed firms with equity securities		134
City Covered		Monterrey
Indicator	Monterrey	Latin America & Caribbean	OECD high income	Best Regulatory Performance
Extent of disclosure index (0-10)	8.0	4.1	6.5	10 (13 Economies)
Extent of director liability index (0-10)	5.0	5.2	5.3	10 (3 Economies)
Ease of shareholder suits index (0-10)	5.0	6.7	7.3	10 (Djibouti)
Extent of shareholder rights index (0-6)	5.0	3.0	4.7	6 (19 Economies)
Extent of ownership and control index (0-7)	5.0	2.3	4.5	7 (9 Economies)
Extent of corporate transparency index (0-7)	3.0	2.3	5.7	7 (13 Economies)

Figure – Protecting Minority in Monterrey – Score

62.0

Score – Protecting Minority Investors

Figure – Protecting Minority Investors in Monterrey and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

100

80.0: Colombia (Rank: 13)

71.6: United States (Rank: 36)

66.0: Chile (Rank: 51)

62.0: Brazil (Rank: 61)

62.0: Mexico City

62.0: Monterrey

0

Figure – Protecting Minority Investors in Monterrey and comparator economies – Measure of Quality

Monterrey 3 5 8

Brazil 6 8

Chile 2 6 8

Colombia 5 7

Mexico City 3 5 8

United States 5 9

5 5 5

5 4 4 4

4 6 7

9 7 4 8

5 5 5

7 3 2 9

OECD high income

Latin America & Caribbean

2.5

5.6

5.4

5.6

4.4

2.5

6.6

3.2

4.3

6.5

4.5

7.4

0 5 10 15 20 25 30 35 40 45

Sub-Indicator Score

Details – Protecting Minority Investors in Monterrey – Measure of Quality
	Answer	Score
Extent of conflict of interest regulation index (0-30)
Extent of disclosure index (0-10)		8.0
Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3)	Board of directors excluding interested members	2.0
Must an external body review the terms of the transaction before it takes place? (0-1)	Yes	1.0
Must Mr. James disclose his conflict of interest to the board of directors? (0-2)	Existence of a conflict without any specifics	1.0
Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2)	Disclosure on the transaction and on the conflict of interest	2.0
Must Buyer immediately disclose the transaction to the public? (0-2)	Disclosure on the transaction and on the conflict of interest	2.0
Extent of director liability index (0-10)		5.0
Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Buyer? (0-1)	Yes	1.0
Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2)	Liable if unfair or prejudicial	2.0
Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2)	Liable if negligent	1.0
Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1)	Yes	1.0
Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1)	No	0.0
Is Mr. James disqualified upon a successful claim by shareholders? (0-1)	No	0.0
Can a court void the transaction upon a successful claim by shareholders? (0-2)	Only in case of fraud or bad faith	0.0
Ease of shareholder suits index (0-10)		5.0
Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? (0-1)	Yes	1.0
Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3)	Documents that directly prove specific facts in the plaintiff’s claim	2.0
Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1)	No	0.0
Can the plaintiff directly question the defendant and witnesses at trial? (0-2)	Preapproved questions only	1.0
Is the level of proof required for civil suits lower than that of criminal cases? (0-1)	No	0.0
Can shareholder plaintiffs recover their legal expenses from the company? (0-2)	Yes if successful	1.0
Extent of shareholder governance index (0-20)
Extent of shareholder rights index (0-6)		5.0
Does the sale of 51% of Buyer's assets require shareholder approval?	Yes	1.0
Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders?	Yes	1.0
Must Buyer obtain its shareholders’ approval every time it issues new shares?	Yes	1.0
Do shareholders automatically receive preemption rights every time Buyer issues new shares?	Yes	1.0
Do shareholders elect and dismiss the external auditor?	No	0.0
Are changes to the rights of a class of shares only possible if the holders of the affected shares approve?	Yes	1.0

Extent of ownership and control index (0-7)		5.0
Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors?	No	0.0
Must the board of directors include independent and nonexecutive board members?	Yes	1.0
Can shareholders remove members of the board of directors without cause before the end of their term?	Yes	1.0
Must the board of directors include a separate audit committee exclusively comprising board members?	Yes	1.0
Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer?	Yes	1.0
Must Buyer pay declared dividends within a maximum period set by law?	No	0.0
Is a subsidiary prohibited from acquiring shares issued by its parent company?	Yes	1.0
Extent of corporate transparency index (0-7)		3.0
Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%?	No	0.0
Must Buyer disclose information about board members’ primary employment and directorships in other companies?	Yes	1.0
Must Buyer disclose the compensation of individual managers?	No	0.0
Must a detailed notice of general meeting be sent 21 days before the meeting?	No	0.0
Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda?	No	0.0
Must Buyer's annual financial statements be audited by an external auditor?	Yes	1.0
Must Buyer disclose its audit reports to the public?	Yes	1.0

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Case study assumptions

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)
Method and frequency of filing and payment

Time required to comply with 3 major taxes (hours per year)
Collecting information, computing tax payable
Preparing separate tax accounting books, if required
Completing tax return, filing with agencies
Arranging payment or withholding

Total tax and contribution rate (% of commercial profits)
Profit or corporate income tax
Social contributions, labor taxes paid by employer
Property and property transfer taxes
Dividend, capital gains, financial transactions taxes
Waste collection, vehicle, road and other taxes

Postfiling Index
Time to comply with VAT refund (hours)
Time to obtain VAT refund (weeks)
Time to comply with a corporate income tax correction (hours)
Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

The VAT refund process:
In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

The corporate income tax audit process:
An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Indicator

Mexico City

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Payments (number per year)

28.2

10.3

3 (2 Economies)

Paying Taxes – Mexico City

Total tax and contribution rate (% of profit)

55.1

47.0

39.9

26.1 (33 Economies)

Time (hours per year) 241 317.1 158.8 49 (3 Economies)

Figure – Paying Taxes in Mexico City – Score

Postfiling index (0-100) 40.5 47.5 86.7 None in 2018/19

95.0

70.4

57.3

40.5

Payments

Time

Total tax and contribution rate

Postfiling index

Figure – Paying Taxes in Mexico City and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

0 100

86.8: United States (Rank: 25)

75.3: Chile (Rank: 86)

65.8: Mexico City

65.8: Monterrey

58.6: Colombia (Rank: 148)

34.4: Brazil (Rank: 184)

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in Mexico City and comparator economies – Measure of Quality

94.0

57.0

40.5

48.2

40.5

47.5

7.8

100

Index score

Mexico City

Brazil Chile Colombia United States

Monterrey Latin

America & Caribbean

Details – Paying	Taxes in Mexico City
Tax or mandatory contribution	Payments (number)	Notes on Payments	Time (hours)	Statutory tax rate	Tax base	Total tax and contribution rate (% of profit)	Notes on TTCR
Corporate	1.0	online	102.0	30.00%	taxable profit	27.01
income tax
Employer paid –	1.0	online	38.5	various rates	gross salaries	23.82
Social security
contributions
Employer paid –	1.0	online		3.00%	gross salaries	3.38
Payroll tax
Property tax	1.0	online		various rates	property value	0.86
Vehicle tax	1.0	online		various rates	value of vehicle	0.04
Value added tax	1.0	online	100.0	16.00%	sales price	0.00	not included
(VAT)
Employee paid –	0.0	jointly		various rates	gross salaries	0.00	withheld
Social security
contributions
Totals	6		241			55.1

Details – Paying Taxes in Mexico City – Tax by Type
Taxes by type	Answer
Profit tax (% of profit)	27.0
Labor tax and contributions (% of profit)	27.2
Other taxes (% of profit)	0.9

Details – Paying Taxes in Mexico City – Measure of Quality

Answer

Score

Postfiling index (0-100)

40.5

Does VAT exist?

Yes

VAT refunds

Restrictions on VAT refund process

none

Does a VAT refund process exist per the case study? Yes

Is there a mandatory carry forward period?

Percentage of cases exposed to a VAT audit (%) 50% – 74%

Time to obtain VAT refund (weeks)

42.0

25.1

Time to comply with VAT refund (hours) 21.0 59.0

Does corporate income tax exist?

Yes

Corporate income tax audits

Time to comply with a corporate income tax correction (hours)

13.5

78.0

Percentage of cases exposed to a corporate income tax audit (%) 25% – 49%

Time to complete a corporate income tax correction (weeks) 87.1 0.0

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Indicator

Monterrey

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Payments (number per year)

28.2

10.3

3 (2 Economies)

Paying Taxes – Monterrey

Total tax and contribution rate (% of profit)

55.1

47.0

39.9

26.1 (33 Economies)

Time (hours per year) 241 317.1 158.8 49 (3 Economies)

Figure – Paying Taxes in Monterrey – Score

Postfiling index (0-100) 40.5 47.5 86.7 None in 2018/19

95.0

70.4

57.3

40.5

Payments

Time

Total tax and contribution rate

Postfiling index

Figure – Paying Taxes in Monterrey and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

0 100

86.8: United States (Rank: 25)

75.3: Chile (Rank: 86)

65.8: Mexico City

65.8: Monterrey

58.6: Colombia (Rank: 148)

34.4: Brazil (Rank: 184)

Figure – Paying Taxes in Monterrey and comparator economies – Measure of Quality

94.0

57.0

40.5

48.2

40.5

47.5

7.8

100

Index score

Monterrey Brazil Chile Colombia United

States

Mexico City

Latin America & Caribbean

Details – Paying	Taxes in Monterrey
Tax or mandatory contribution	Payments (number)	Notes on Payments	Time (hours)	Statutory tax rate	Tax base	Total tax and contribution rate (% of profit)	Notes on TTCR
Corporate	1.0	online	102.0	30.00%	taxable profit	27.01
income tax
Employer paid –	1.0	online	38.5	various rates	gross salaries	23.82
Social security
contributions
Employer paid –	1.0	online		3.00%	gross salaries	3.38
Payroll tax
Property tax	1.0	online		various rates	property value	0.86
Vehicle tax	1.0	online		various rates	value of vehicle	0.04
Value added tax	1.0	online	100.0	16.00%	sales price	0.00	not included
(VAT)
Employee paid –	0.0	jointly		various rates	gross salaries	0.00	withheld
Social security
contributions
Totals	6		241			55.1

Details – Paying Taxes in Monterrey – Tax by Type
Taxes by type	Answer
Profit tax (% of profit)	27.0
Labor tax and contributions (% of profit)	27.2
Other taxes (% of profit)	0.9

Details – Paying Taxes in Monterrey – Measure of Quality

Answer

Score

Postfiling index (0-100)

40.5

Does VAT exist?

Yes

VAT refunds

Restrictions on VAT refund process

none

Does a VAT refund process exist per the case study? Yes

Is there a mandatory carry forward period?

Percentage of cases exposed to a VAT audit (%) 50% – 74%

Time to obtain VAT refund (weeks)

42.0

25.1

Time to comply with VAT refund (hours) 21.0 59.0

Does corporate income tax exist?

Yes

Corporate income tax audits

Time to comply with a corporate income tax correction (hours)

13.5

78.0

Percentage of cases exposed to a corporate income tax audit (%) 25% – 49%

Time to complete a corporate income tax correction (weeks) 87.1 0.0

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Documentary compliance

Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy
Obtaining, preparing and submitting documents required by destination economy and any transit economies
Covers all documents required by law and in practice, including electronic submissions of information

Border compliance
Customs clearance and inspections
Inspections by other agencies (if applied to more than 20% of shipments)
Handling and inspections that take place at the economy’s port or border

Domestic transport
Loading or unloading of the shipment at the warehouse or port/border
Transport between warehouse and port/border
Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.
It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.
The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.
All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.
A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.
Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

Trading across Borders – Mexico City

Indicator	Mexico City	Latin America & Caribbean	OECD high income	Best Regulatory Performance
Time to export: Border compliance (hours)	20	55.3	12.7	1 (19 Economies)
Cost to export: Border compliance (USD)	400	516.3	136.8	0 (19 Economies)
Time to export: Documentary compliance (hours)	8	35.7	2.3	1 (26 Economies)
Cost to export: Documentary compliance (USD)	60	100.3	33.4	0 (20 Economies)
Time to import: Border compliance (hours)	44	55.6	8.5	1 (25 Economies)
Cost to import: Border compliance (USD)	450	628.4	98.1	0 (28 Economies)
Time to import: Documentary compliance (hours)	18	43.2	3.4	1 (30 Economies)
Cost to import: Documentary compliance (USD)	100	107.3	23.5	0 (30 Economies)

Figure – Trading across Borders in Mexico City – Score

Time	Cost	Time	Cost	Time	Cost	Time	Cost
to	to	to	to	to	to	to	to
export:	export:	export:	export:	import:	import:	import:	import:
Border	Border	Documentary	Documentary	Border	Border	Documentary	Documentary
compliance	compliance	compliance	compliance	compliance	compliance	compliance	compliance

Figure – Trading across Borders in Mexico City and comparator economies – Ranking and Score

87.8

62.3

95.9

85.0

84.5

62.5

93.1

85.7

DB 2020 Trading Across Borders Score

0 100

92.0: United States (Rank: 39)

82.1: Mexico City

82.1: Monterrey

80.6: Chile (Rank: 73)

69.9: Brazil (Rank: 108)

62.7: Colombia (Rank: 133)

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in Mexico City – Time and Cost

450

400

100

Time (hours)

Time (hours) Cost (USD)

500

400

Cost (USD)

30 300

20 200

10 100

Export

–

Border Compliance

Export

–

Documentary Compliance

Import

–

Border Compliance

Import

–

Documentary Compliance

Details – Trading across Borders in Mexico City

Characteristics Export Import

Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

HS 8708: Parts and accessories of motor vehicles

Border

Nuevo Laredo border crossing

Trade partner United States United States

Domestic transport time (hours)

Distance (km) 1117 1117

Domestic transport cost (USD) 1300 1300

Details – Trading across Borders in Mexico City – Components of Border Compliance

	Time to Complete (hours)	Associated Costs (USD)
Export: Clearance and inspections required by customs authorities	20.4	250.0
Export: Clearance and inspections required by agencies other than customs	0.0	0.0
Export: Port or border handling	20.4	150.0
Import: Clearance and inspections required by customs authorities	44.2	300.0
Import: Clearance and inspections required by agencies other than customs	0.0	0.0
Import: Port or border handling	44.2	150.0

Details – Trading across Borders in Mexico City – Trade Documents

Export

Import

Guía de Transporte (Road Transport Document) Guía de Transporte (Road Transport Document)

Customs Export Declaration Customs Export Declaration

Commercial Invoice Commercial Invoice

Packing List COVE

NAFTA Certificate of Origin  Packing List

NAFTA Certificate of Origin

Trading across Borders – Monterrey

Indicator	Monterrey	Latin America & Caribbean	OECD high income	Best Regulatory Performance
Time to export: Border compliance (hours)	20	55.3	12.7	1 (19 Economies)
Cost to export: Border compliance (USD)	400	516.3	136.8	0 (19 Economies)
Time to export: Documentary compliance (hours)	8	35.7	2.3	1 (26 Economies)
Cost to export: Documentary compliance (USD)	60	100.3	33.4	0 (20 Economies)
Time to import: Border compliance (hours)	44	55.6	8.5	1 (25 Economies)
Cost to import: Border compliance (USD)	450	628.4	98.1	0 (28 Economies)
Time to import: Documentary compliance (hours)	18	43.2	3.4	1 (30 Economies)
Cost to import: Documentary compliance (USD)	100	107.3	23.5	0 (30 Economies)

Figure – Trading across Borders in Monterrey – Score

Time	Cost	Time	Cost	Time	Cost	Time	Cost
to	to	to	to	to	to	to	to
export:	export:	export:	export:	import:	import:	import:	import:
Border	Border	Documentary	Documentary	Border	Border	Documentary	Documentary
compliance	compliance	compliance	compliance	compliance	compliance	compliance	compliance

Figure – Trading across Borders in Monterrey and comparator economies – Ranking and Score

87.8

62.3

95.9

85.0

84.5

62.5

93.1

85.7

DB 2020 Trading Across Borders Score

0 100

92.0: United States (Rank: 39)

82.1: Mexico City

82.1: Monterrey

80.6: Chile (Rank: 73)

69.9: Brazil (Rank: 108)

62.7: Colombia (Rank: 133)

Figure – Trading across Borders in Monterrey – Time and Cost

450

400

100

Time (hours)

Time (hours) Cost (USD)

500

400

Cost (USD)

30 300

20 200

10 100

Export

–

Border Compliance

Export

–

Documentary Compliance

Import

–

Border Compliance

Import

–

Documentary Compliance

Details – Trading across Borders in Monterrey

Characteristics Export Import

Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles

HS 8708: Parts and accessories of motor vehicles

Border

Nuevo Laredo border crossing

Trade partner United States United States

Domestic transport time (hours)

Distance (km) 219 219

Details – Trading across Borders in Monterrey – Components of Border Compliance

Domestic transport cost (USD) 500 500

Time to Complete (hours)

Associated Costs (USD)

Export: Clearance and inspections required by

customs authorities

20.4

250.0

Export: Port or border handling

20.4

150.0

Export: Clearance and inspections required by agencies other than customs

0.0 0.0

Import: Clearance and inspections required by

agencies other than customs

0.0

Import: Clearance and inspections required by customs authorities

44.2 300.0

Import: Port or border handling 44.2 150.0

Details – Trading across Borders in Monterrey – Trade Documents

Export

Import

Guía de Transporte (Road Transport Document) • Guía de Transporte (Road Transport Document)

Customs Export Declaration Customs Export Declaration

Commercial Invoice Commercial Invoice

Packing List COVE

NAFTA Certificate of Origin Packing List

NAFTA Certificate of Origin 

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Time required to enforce a contract through the courts (calendar days)

Time to file and serve the case
Time for trial and to obtain the judgment
Time to enforce the judgment

Cost required to enforce a contract through the courts (% of claim value)
Average attorney fees
Court costs
Enforcement costs

Quality of judicial processes index (0-18)
Court structure and proceedings (-1-5)
Case management (0-6)
Court automation (0-4)
Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.
The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.
The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.
The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.
The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.
The judge decides in favor of the seller; there is no appeal.
The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Standardized Case

Claim value MXN 329,229

Enforcing Contracts – Mexico City

City Covered Mexico City

Court name Mexico City First Instance Oral Civil Court

Figure – Enforcing Contracts in Mexico City – Score

Indicator

Mexico City

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Time (days)

350

774.2

589.6

120 (Singapore)

Quality of judicial processes index (0-18)

9.5

8.8

11.7

None in 2018/19

Cost (% of claim value) 33.5 32.0 21.5 0.1 (Bhutan)

81.1

62.4

52.8

Time

Cost

Quality of judicial processes index

Figure – Enforcing Contracts in Mexico City and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

10

74.6: Monterrey

73.4: United States (Rank: 17)

65.5: Mexico City

64.7: Chile (Rank: 54)

64.1: Brazil (Rank: 58)

34.3: Colombia (Rank: 177)

0 0

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in Mexico City – Time and Cost

1400

1200

Time (days)

1000

800

600

400

200

Time (days) Cost (% of claim value)

1288 45.8

801

32.0

33.5

25.6

774.2

30.4

30.5

22.0

519

589.6 21.5

350

444

295

Cost (% of claim value)

Brazil Chile Colombia Latin America

& Caribbean

Mexico City

Monterrey OECD high

income

United States

Figure – Enforcing Contracts in Mexico City and comparator economies – Measure of Quality

Mexico City

Brazil

Chile

Colombia

Monterrey

1.5

2.5

3.5

1.5

0.5

3.5

0.5

4.1

United States

OECD high income

Latin America & Caribbean

2.5

2.4

2.2

3.2

4.7

2.4

3.6

4.4

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in Mexico City

Indicator

Time (days) 350

Trial and judgment 125

Filing and service 42

Cost (% of claim value) 33.5

Enforcement of judgment 183

Court fees 5

Attorney fees 22.5

Quality of judicial processes index (0-18) 9.5

Enforcement fees 6

Case management (0-6) 3.0

Court structure and proceedings (-1-5) 3.5

Alternative dispute resolution (0-3) 2.5

Court automation (0-4) 0.5

Details – Enforcing Contracts in Mexico City – Measure of Quality
	Answer	Score
Quality of judicial processes index (0-18)		9.5
Court structure and proceedings (-1-5)		3.5
1. Is there a court or division of a court dedicated solely to hearing commercial cases?	No	0.0
2. Small claims court		1.5
2.a. Is there a small claims court or a fast-track procedure for small claims?	Yes
2.b. If yes, is self-representation allowed?	Yes
3. Is pretrial attachment available?	Yes	1.0
4. Are new cases assigned randomly to judges?	Yes, automatic	1.0
5. Does a woman's testimony carry the same evidentiary weight in court as a man's?	Yes	0.0
Case management (0-6)		3.0
1. Time standards		1.0
1.a. Are there laws setting overall time standards for key court events in a civil case?	Yes
1.b. If yes, are the time standards set for at least three court events?	Yes
1.c. Are these time standards respected in more than 50% of cases?	Yes
2. Adjournments		0.0
2.a. Does the law regulate the maximum number of adjournments that can be granted?	No
2.b. Are adjournments limited to unforeseen and exceptional circumstances?	No
2.c. If rules on adjournments exist, are they respected in more than 50% of cases?	n.a.
3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?	Yes	1.0
4. Is a pretrial conference among the case management techniques used before the competent court?	Yes	1.0
5. Are there any electronic case management tools in place within the competent court for use by judges?	No	0.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?	No	0.0
Court automation (0-4)		0.5
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?	No	0.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?	No	0.0
3. Can court fees be paid electronically within the competent court?	No	0.0
4. Publication of judgments		0.5
4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	No
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
Alternative dispute resolution (0-3)		2.5
1. Arbitration		1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?	Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?	No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?	Yes

2. Mediation/Conciliation 1.0

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or

section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig

Yes

2.a. Is voluntary mediation or conciliation available? Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)?

Standardized Case

Claim value MXN 329,229

Enforcing Contracts – Monterrey

City Covered Monterrey

Court name Monterrey First Instance Oral Commercial Court

Figure – Enforcing Contracts in Monterrey – Score

Indicator

Monterrey

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Time (days)

295

774.2

589.6

120 (Singapore)

Quality of judicial processes index (0-18)

13.0

8.8

11.7

None in 2018/19

Cost (% of claim value) 30.4 32.0 21.5 0.1 (Bhutan)

85.7

65.9

72.2

Time

Cost

Quality of judicial processes index

Figure – Enforcing Contracts in Monterrey and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

10

74.6: Monterrey

73.4: United States (Rank: 17)

65.5: Mexico City

64.7: Chile (Rank: 54)

64.1: Brazil (Rank: 58)

34.3: Colombia (Rank: 177)

0 0

Figure – Enforcing Contracts in Monterrey – Time and Cost

1400

1200

Time (days)

1000

800

600

400

200

Time (days) Cost (% of claim value)

1288 45.8

801

32.0

33.5

25.6

774.2

30.4

30.5

22.0

519

589.6 21.5

350

444

295

Cost (% of claim value)

Brazil Chile Colombia Latin America

& Caribbean

Mexico City

Monterrey OECD high

income

United States

Figure – Enforcing Contracts in Monterrey and comparator economies – Measure of Quality

Monterrey

Brazil

Chile

Colombia

Mexico City

1.5

2.5

3.5

1.5

0.5

3.5

0.5

3.5

4.1

United States

OECD high income

Latin America & Caribbean

2.5

2.4

2.2

3.2

4.7

2.4

3.6

4.4

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in Monterrey

Indicator

Time (days) 295

Trial and judgment 120

Filing and service 15

Cost (% of claim value) 30.4

Enforcement of judgment 160

Court fees 5

Attorney fees 20.4

Quality of judicial processes index (0-18) 13.0

Enforcement fees 5

Case management (0-6) 5.0

Court structure and proceedings (-1-5) 5.0

Alternative dispute resolution (0-3) 2.5

Court automation (0-4) 0.5

Details – Enforcing Contracts in Monterrey – Measure of Quality
	Answer	Score
Quality of judicial processes index (0-18)		13.0
Court structure and proceedings (-1-5)		5.0
1. Is there a court or division of a court dedicated solely to hearing commercial cases?	Yes	1.5
2. Small claims court		1.5
2.a. Is there a small claims court or a fast-track procedure for small claims?	Yes
2.b. If yes, is self-representation allowed?	Yes
3. Is pretrial attachment available?	Yes	1.0
4. Are new cases assigned randomly to judges?	Yes, automatic	1.0
5. Does a woman's testimony carry the same evidentiary weight in court as a man's?	Yes	0.0
Case management (0-6)		5.0
1. Time standards		1.0
1.a. Are there laws setting overall time standards for key court events in a civil case?	Yes
1.b. If yes, are the time standards set for at least three court events?	Yes
1.c. Are these time standards respected in more than 50% of cases?	Yes
2. Adjournments		0.0
2.a. Does the law regulate the maximum number of adjournments that can be granted?	No
2.b. Are adjournments limited to unforeseen and exceptional circumstances?	No
2.c. If rules on adjournments exist, are they respected in more than 50% of cases?	n.a.
3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?	Yes	1.0
4. Is a pretrial conference among the case management techniques used before the competent court?	Yes	1.0
5. Are there any electronic case management tools in place within the competent court for use by judges?	Yes	1.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?	Yes	1.0
Court automation (0-4)		0.5
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?	No	0.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?	No	0.0
3. Can court fees be paid electronically within the competent court?	No	0.0
4. Publication of judgments		0.5
4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	No
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
Alternative dispute resolution (0-3)		2.5
1. Arbitration		1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?	Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?	No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?	Yes

2. Mediation/Conciliation 1.0

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or

section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig

Yes

2.a. Is voluntary mediation or conciliation available? Yes

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to recover debt (years)

Measured in calendar years
Appeals and requests for extension are included

Cost required to recover debt (% of debtor’s estate)
Measured as percentage of estate value
Court fees
Fees of insolvency administrators
Lawyers’ fees
Assessors’ and auctioneers’ fees
Other related fees

To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:
- A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.
- The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.
- The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.
In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

Outcome
Whether business continues operating as a going concern or business assets are sold piecemeal

Recovery rate for creditors
Measures the cents on the dollar recovered by secured creditors
Outcome for the business (survival or not) determines the maximum value that can be recovered
Official costs of the insolvency proceedings are deducted
Depreciation of furniture is taken into account
Present value of debt recovered

Strength of insolvency framework index (0- 16)
Sum of the scores of four component indices:
Commencement of proceedings index (0-3)
Management of debtor’s assets index (0-6)
Reorganization proceedings index (0-3)
Creditor participation index (0-4)

Indicator

Mexico City

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Recovery rate (cents on the dollar)

63.9

31.2

70.2

92.9 (Norway)

Resolving Insolvency – Mexico City

Cost (% of estate)

18.0

16.8

9.3

1.0 (Norway)

Time (years) 1.8 2.9 1.7 0.4 (Ireland)

Figure – Resolving Insolvency in Mexico City – Score

Strength of insolvency framework index (0-16)

11.5

7.2

11.9

None in 2018/19

Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. ..

68.8

71.9

Recovery rate Strength of insolvency framework index

Figure – Resolving Insolvency in Mexico City and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

90.5: United

71.4: Colombia (Rank: 32)

70.3: Mexico City

70.3: Monterrey

60.1: Chile (Rank: 53)

50.4: Brazil (Rank: 77)

0 100

States (Rank: 2)

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in Mexico City – Time and Cost

4.5

Time (years)

3.5

2.5

1.5

0.5

Time (years) Cost (% of estate)

4.0

16.8

18.0

14.5

12.0

2.9

2.0

10.0

1.7

8.5

1.8

9.3

1.7

1.0

Cost (% of estate)

Brazil Chile Colombia Latin America

& Caribbean

Mexico City

Monterrey OECD high

income

United States

Figure – Resolving Insolvency in Mexico City and comparator economies – Measure of Quality

Mexico City

Brazil

Chile

Colombia

Monterrey

United States

OECD high income

Latin America & Caribbean

3.7

4.5

5.5

5.3

2.4

2.5

2.8

1.9

0.8

2.1

1.5

0.5

1.5

1.9

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in Mexico City and comparator economies – Recovery Rate

81.0

63.9

68.7

63.9

41.9

31.2

18.2

Recovery rate(cents on the dollar)

Mexico City Brazil Chile Colombia United States Monterrey Latin America & Caribbea

Details – Resolving Insolvency in Mexico City

Indicator

Answer

Score

Proceeding

reorganization

The Law of the Commercial Insolvency Law (LCM) provides a unitary form of insolvency proceedings (concurso mercantil) which has two phases: Conciliation (reorganization) and Bankruptcy (Liquidation). Mirage would commence a reorganization proceeding (conciliation) by filing for a “concurso mercantil” in light of Art. 10 of the (LCM). It will be sufficient to demonstrate that the debtor is generally unable to pay its debts as they mature. One of the main advantages of this option is that once the “concurso mercantil” commences, all all enforcement actions against the

debtor would be automatically suspended, allowing Mirage to reorganize.

Time (in years)

1.8

It would take approximately 21 months to resolve an insolvency proceeding in Mexico City, similar to the case study, in which a debtor reaches a reorganization agreement with its creditors and the agreement is approved. All necessary steps to complete the entire process are included within this estimate, including the appointment of an inspector, a conciliator and insolvency administrator, and the preparation of the creditor’s claims. The period prescribed by Article

145 of the Commercial Insolvency Law is rarely enforced, but it is taken into account when approving the agreement.

Outcome going concern Since it would be possible to reach a reorganization agreement, the hotel will continue operating as a going concern.

Recovery rate

(cents on the dollar)

63.9

Cost (% of estate) 18.0 The costs associated with an insolvency proceeding (in which a reorganization agreement is approved) in Mexico would amount to approximately 18% of Mirage’s estate. The main components of this cost would be the attorney’s fees (5-11 %), as well as the inspector, conciliator and insolvency administrator (7%) and additional judicial costs (1%).

Details – Resolving Insolvency in Mexico City – Measure of Quality
	Answer	Score
Strength of insolvency framework index (0-16)		11.5
Commencement of proceedings index (0-3)		2.5
What procedures are available to a DEBTOR when commencing insolvency proceedings?	(a) Debtor may file for both liquidation and reorganization	1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?	(a) Yes, a creditor may file for both liquidation and reorganization	1.0
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets	(e) Other	0.5
Management of debtor's assets index (0-6)		5.5
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?	Yes	1.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?	Yes	1.0
Does the insolvency framework allow avoidance of preferential transactions?	Yes	1.0
Does the insolvency framework allow avoidance of undervalued transactions?	Yes	1.0
Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?	Yes	1.0
Does the insolvency framework assign priority to post-commencement credit?	(a) Yes over all pre- commencement creditors, secured or unsecured	0.5
Reorganization proceedings index (0-3)		1.5
Which creditors vote on the proposed reorganization plan?	(a) All creditors	0.5
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?	No	0.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?	Yes	1.0
Creditor participation index (0-4)		2.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?	No	0.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?	No	0.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?	Yes	1.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?	Yes	1.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Indicator

Monterrey

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Recovery rate (cents on the dollar)

63.9

31.2

70.2

92.9 (Norway)

Resolving Insolvency – Monterrey

Cost (% of estate)

18.0

16.8

9.3

1.0 (Norway)

Time (years) 1.8 2.9 1.7 0.4 (Ireland)

Figure – Resolving Insolvency in Monterrey – Score

Strength of insolvency framework index (0-16)

11.5

7.2

11.9

None in 2018/19

Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. ..

68.8

71.9

Recovery rate Strength of insolvency framework index

Figure – Resolving Insolvency in Monterrey and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

90.5: United

71.4: Colombia (Rank: 32)

70.3: Mexico City

70.3: Monterrey

60.1: Chile (Rank: 53)

50.4: Brazil (Rank: 77)

0 100

States (Rank: 2)

Figure – Resolving Insolvency in Monterrey – Time and Cost

4.5

Time (years)

3.5

2.5

1.5

0.5

Time (years) Cost (% of estate)

4.0

16.8

18.0

14.5

12.0

2.9

2.0

10.0

1.7

8.5

1.8

9.3

1.7

1.0

Cost (% of estate)

Brazil Chile Colombia Latin America

& Caribbean

Mexico City

Monterrey OECD high

income

United States

Figure – Resolving Insolvency in Monterrey and comparator economies – Measure of Quality

Monterrey

Brazil

Chile

Colombia

Mexico City

United States

OECD high income

Latin America & Caribbean

3.7

4.5

5.5

5.3

2.4

2.5

2.8

1.9

0.8

2.1

1.5

0.5

1.5

1.9

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Figure – Resolving Insolvency in Monterrey and comparator economies – Recovery Rate

81.0

63.9

68.7

63.9

41.9

31.2

18.2

Recovery rate(cents on the dollar)

Monterrey Brazil Chile Colombia United States Mexico City Latin America & Caribbea

Details – Resolving Insolvency in Monterrey

Indicator

Answer

Score

Proceeding

reorganization

would be automatically suspended, allowing Mirage to reorganize itself.

Time (in years)

1.8

It would take approximately 21 months to resolve an insolvency proceeding in Monterrey, similar to the case study, in which a debtor reaches a reorganization agreement with its creditors and the agreement is approved. All necessary steps to complete the entire process are included within this estimate, including the appointment of an inspector, a conciliator and insolvency administrator, and the preparation of the creditor’s claims. The period prescribed by Article

145 of the Commercial Insolvency Law is rarely enforced, but it is taken into account when approving the agreement.

Outcome going concern Since it would be possible to reach an agreement on a reorganization plan, the hotel will continue operating as a going concern.

Recovery rate

(cents on the dollar)

63.9

Cost (% of estate) 18.0 The costs associated with an insolvency proceeding (in which a reorganization agreement is approved) in Monterrey would amount to approximately 18% of Mirage’s estate. The main components of this cost would be the attorney’s fees (5-11 %), as well as the inspector, conciliator and insolvency administrator (7%) and additional judicial costs (1%).

Details – Resolving Insolvency in Monterrey – Measure of Quality
	Answer	Score
Strength of insolvency framework index (0-16)		11.5
Commencement of proceedings index (0-3)		2.5
What procedures are available to a DEBTOR when commencing insolvency proceedings?	(a) Debtor may file for both liquidation and reorganization	1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?	(a) Yes, a creditor may file for both liquidation and reorganization	1.0
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets	(e) Other	0.5
Management of debtor's assets index (0-6)		5.5
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?	Yes	1.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?	Yes	1.0
Does the insolvency framework allow avoidance of preferential transactions?	Yes	1.0
Does the insolvency framework allow avoidance of undervalued transactions?	Yes	1.0
Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?	Yes	1.0
Does the insolvency framework assign priority to post-commencement credit?	(a) Yes over all pre- commencement creditors, secured or unsecured	0.5
Reorganization proceedings index (0-3)		1.5
Which creditors vote on the proposed reorganization plan?	(a) All creditors	0.5
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?	No	0.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?	Yes	1.0
Creditor participation index (0-4)		2.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?	No	0.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?	No	0.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?	Yes	1.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?	Yes	1.0

Note:

Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.
Is a full-time employee.
Is not a member of the labor union, unless membership is mandatory.

The business:
Is a limited liability company (or the equivalent in the economy).
Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Has 60 employees.
Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.
Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Mexico City

Details – Employing Workers in Mexico City

Hiring

Fixed-term contracts prohibited for permanent tasks? Yes

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 140.6

Maximum length of probationary period (months) 1.0

Ratio of minimum wage to value added per worker 0.1

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 25.0

Premium for overtime work (% of hourly pay) 100.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? Yes

Paid annual leave for a worker with 1 year of tenure (working days) 6.0

Paid annual leave for a worker with 5 years of tenure (working days) 14.0

Paid annual leave for a worker with 10 years of tenure (working days) 16.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 12.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? Yes

Third-party approval if one worker is dismissed? Yes

Third-party notification if nine workers are dismissed? Yes

Third-party approval if nine workers are dismissed? Yes

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? Yes

Priority rules for reemployment? Yes

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 14.6

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 21.4

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 30.0

Unemployment protection after one year of employment? No

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 22.0

Employing Workers – Monterrey

Details – Employing Workers in Monterrey

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? Yes

Maximum length of a single fixed-term contract (months) No limit

Maximum length of fixed-term contracts, including renewals (months) No limit

Minimum wage applicable to the worker assumed in the case study (US$/month) 140.6

Maximum length of probationary period (months) 1.0

Ratio of minimum wage to value added per worker 0.1

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 0.0

Premium for work on weekly rest day (% of hourly pay) 25.0

Premium for overtime work (% of hourly pay) 100.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? Yes

Paid annual leave for a worker with 1 year of tenure (working days) 6.0

Paid annual leave for a worker with 5 years of tenure (working days) 14.0

Paid annual leave for a worker with 10 years of tenure (working days) 16.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 12.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? Yes

Third-party approval if one worker is dismissed? Yes

Third-party notification if nine workers are dismissed? Yes

Third-party approval if nine workers are dismissed? Yes

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? Yes

Priority rules for reemployment? Yes

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 14.6

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 21.4

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 30.0

Unemployment protection after one year of employment? No

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 22.0

PEO Mexico

Mexico stands out as a compelling choice for businesses seeking the advantages of a Professional Employer Organization (PEO). With its strategic location, robust economy, and skilled workforce, Mexico offers a conducive environment for companies aiming to expand their operations internationally. The country’s pro-business policies, coupled with a growing market and diverse industries, create a fertile ground for PEOs to provide efficient HR and employment solutions. Navigating Mexico’s complex employment regulations becomes more manageable with the expertise of PEOs, ensuring compliance while tapping into a dynamic talent pool. Whether streamlining administrative processes or accessing new opportunities, Mexico’s status as a PEO country provides a gateway to smoother business expansion and enhanced success.

PEO services, or Professional Employer Organization services, have emerged as a strategic solution for businesses operating in Mexico’s diverse and evolving corporate landscape. These services provide a valuable avenue for companies to streamline their human resource management by outsourcing functions such as payroll administration, employee benefits management, tax compliance, and more. By collaborating with a PEO, businesses can offload intricate administrative tasks, enabling them to concentrate on core operations and strategic growth objectives. This is especially beneficial for foreign companies seeking to establish a presence in Mexico, as PEOs possess an in-depth understanding of local labor laws and regulations, ensuring adherence and risk mitigation. Ultimately, PEO services in Mexico offer an efficient approach to navigate the intricacies of workforce management, contributing to improved operational efficiency and overall business competitiveness.

Business Reforms in Mexico

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008.

=Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Dealing with Construction Permits: Mexico (Mexico City) made dealing with construction permits more difficult by increasing the fees for obtaining a building permit.

DB2019

Dealing with Construction Permits: Mexico City made dealing with construction permits more expensive by amending its tax code.

DB2018

Dealing with Construction Permits: Mexico made dealing with construction permits costlier by increasing several fees. This reform applies to both Mexico City and Monterrey.

Getting Electricity: Mexico (Mexico City) improved the reliability of electricity supply by installing smart meters, extending the medium-voltage network and implementing a new system to remotely restore power service.

Registering Property: Mexico (Monterrey) made registering property more expensive by increasing the municipal property transfer tax.

DB2017

Registering Property: Mexico made registering property easier by digitizing its land records, improving the quality of the Land Registry infrastructure and making the registration process more efficient.

Employing Workers:

Mexico adopted a resolution that eliminated geographic differences in national minimum wages. Prior to the reform Mexico was divided into two zones—zone A and zone B—with different applicable minimum wages. This reform applies to both Mexico City and Monterrey.

DB2016

Getting Credit: Mexico improved access to credit by implementing a decree allowing a general description of assets granted as collateral. This reform applies to both Mexico City and Monterrey.

Paying Taxes: Mexico made paying taxes easier for companies by abolishing the business flat tax—though it also made paying taxes more costly by allowing only a portion of salaries to be deductible. These changes apply to both Mexico City and Monterrey. In addition, the payroll tax rate paid by employers was increased for Mexico City.

DB2015

Getting Credit: Mexico improved access to credit by amending its insolvency proceedings law and establishing clear grounds for relief from a stay of enforcement actions by secured creditors during reorganization procedures. This reform applies to both Mexico City and Monterrey.

Resolving Insolvency: Mexico made resolving insolvency easier by clarifying several rules, shortening the time extensions allowed during reorganization, facilitating the electronic submission of documents and improving the legal rights of creditors and other parties involved in bankruptcy procedures. This reform applies to both Mexico City and Monterrey.

DB2014

Getting Electricity: Mexico made getting electricity easier by increasing the efficiency of the utility’s internal processes and by enforcing a “silence is consent” rule for the approval of the feasibility study for a new connection.

Trading across Borders: Mexico made trading across borders easier by implementing an electronic single-window system.

Enforcing Contracts: Mexico made enforcing contracts easier by creating small claims courts, with oral proceedings, that can hear both civil and commercial cases.

DB2013

Starting a Business: Mexico made starting a business easier by eliminating the minimum capital requirement for limited liability companies.

Getting Electricity: In Mexico the distribution utility made getting electricity easier by streamlining procedures, offering training opportunities to private contractors, using a geographic information system (GIS) to map the electricity distribution network and increasing the stock of materials.

DB2012

Dealing with Construction Permits: Mexico made dealing with construction permits faster by consolidating internal administrative procedures.

Getting Credit: Mexico strengthened its secured transactions system by implementing a centralized collateral registry with an electronic database that is accessible online.

Paying Taxes: Mexico continued to ease the administrative burden of paying taxes for firms by ending the requirement to file a yearly value added tax return and reduced filing requirements for other taxes

DB2011

Starting a Business: Mexico launched an online one-stop shop for initiating business registration.

Paying Taxes: Mexico increased taxes on companies by raising several tax rates, including the corporate income tax and the rate on cash deposits. At the same time, the administrative burden was reduced slightly with more options for online payment and increased use of accounting software.

DB2010

Starting a Business: Mexico made starting a business easier by establishing an electronic platform for company registration, by substantially reducing the time required for registration and by eliminating the requirement to register with the statistical office.

Paying Taxes: Mexico made paying taxes easier for companies by introducing electronic payment systems for payroll, property and social security taxes.

DB2009

Paying Taxes: Mexico made paying taxes less costly for companies by abolishing the asset tax—though it also made it more difficult by introducing a new flat tax, a new withholding tax on cash deposit interest and new reporting rules for value added tax.

Resolving Insolvency: Mexico made reorganization more accessible by amending its bankruptcy law to allow debtors and creditors to enter into a reorganization agreement at any stage of the insolvency procedure.

DB2008

Registering Property: Mexico issued a new notary fee schedule that reduced the cost of registering property.

Paying Taxes: Mexico made paying taxes less costly for companies by reducing the corporate income tax rate.

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Economy Profile of Mexico

Ease of Doing Business in Mexico

Rankings on Doing Business topics – Mexico

Topic Scores

Starting a Business

What the indicators measure

Procedures to legally start and formally operate a company (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

Paid-in minimum capital (% of income per capita)

The business:

The owners:

Starting a Business – Mexico City

Figure – Starting a Business in Mexico City – Score

Figure – Starting a Business in Mexico City and comparator economies – Ranking and Score

Figure – Starting a Business in Mexico City – Procedure, Time and Cost

Details – Starting a Business in Mexico City – Procedure, Time and Cost

1 Obtain the authorization of using the company name online

2 Notary prepares the deed and parties sign it at the notary public

3 File the deed of incorporation with the Public Registry of Commerce

4 Obtain a Tax Registry Number (RFC) with the Tax Authorities (Sistema de Administración Tributaria – SAT)

Starting a Business – Monterrey

Figure – Starting a Business in Monterrey – Score

Figure – Starting a Business in Monterrey and comparator economies – Ranking and Score

Figure – Starting a Business in Monterrey – Procedure, Time and Cost

Details – Starting a Business in Monterrey – Procedure, Time and Cost

1 Obtain the authorization of using the company name online and file the draft deed of incorporation with the notary online

2 Notary prepares the deed of incorporation and parties sign it at the notary public

3 File the deed of incorporation with the Public Registry of Commerce

4 Obtain a Tax Registry Number with the Tax Authorities (Sistema de Administración Tributaria – SAT)

5 Register with the Mexican Social Security Institute (IMSS)

6 Register with the State Taxpayer Registry at the Ministry of Finance of the State of Nuevo León

7 Register with the National Business Information Registry (Sistema de Información Empresarial – SIEM)

Dealing with Construction Permits

What the indicators measure

Procedures to legally build a warehouse (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

Building quality control index (0-15)

The construction company (BuildCo):

The warehouse:

The water and sewerage connections:

Dealing with Construction Permits – Mexico City

Figure – Dealing with Construction Permits in Mexico City – Score

Figure – Dealing with Construction Permits in Mexico City and comparator economies – Ranking and Score

Figure – Dealing with Construction Permits in Mexico City – Procedure, Time and Cost

Figure – Dealing with Construction Permits in Mexico City and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Mexico City – Procedure, Time and Cost

1 Request and obtain the alignment certificate (alineamiento) and official number (número official)

2 Obtain a topographic map

Details – Dealing with Construction Permits in Mexico City – Measure of Quality

Dealing with Construction Permits – Monterrey

Figure – Dealing with Construction Permits in Monterrey – Score

Figure – Dealing with Construction Permits in Monterrey and comparator economies – Ranking and Score

Figure – Dealing with Construction Permits in Monterrey – Procedure, Time and Cost

Figure – Dealing with Construction Permits in Monterrey and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Monterrey – Procedure, Time and Cost

1 Obtain feasibility and guidelines information for urban land use (uso de suelo) in the Secretariat for Urban Development and Ecology

2 Receive civil protection authorization from the Department of Civil Protection at the Secretariat for Urban Development and Ecology (SEDUE)

3 Obtain alignment certificate (alineamiento vial) from the Secretariat for Urban Development and Ecology

4 Request land use license, building use license, official number and construction license

5 Receive inspection prior to issuing the land use license, building use license, official number and construction license

6 Receive land use license, building use license, official number and construction license

8 Request and obtain feasibility study for water and drainage services from the Water and Drainage Services of Monterrey (SADM)

9 Obtain excavation permit from the Secretariat of Public Services (Technical Department, Permit Coordination)

10 Request and connect to water and drainage services at the Water and Drainage Services of Monterrey (SADM)

11 Submit completion of construction work report (oficio de obra terminada) and request stamp by the Secretariat for Urban Development and Ecology

12 Receive final inspection from the Secretariat for Urban Development and Ecology

13 Obtain certificate of completion of construction work from the Secretariat for Urban Development and Ecology

Details – Dealing with Construction Permits in Monterrey – Measure of Quality

Getting Electricity

What the indicators measure

Procedures to obtain an electricity connection (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

The reliability of supply and transparency of tariffs index (0-8)

The warehouse:

The electricity connection:

The monthly consumption:

Price of electricity (cents per kilowatt-hour)*