On April 3, 2013, Federal Congresswoman Gloria Elizabeth Núñez Sánchez and Federal Congressman ManlioFabio Beltrones Rivera of the Institutional Revolutionary Party (PRI) submitted the initiative to Congress, alongwith the draft decree to amend section I of article 27 of the Constitution of the United Mexican States. Thisinitiative is the first attempt to reform the constitutional provision dating from 1917 which prohibits foreignersfrom directly acquiring ownership of real property located within the “restricted zone,” consisting of a strip ofland that covers 100 kilometers along Mexico’s land borders and 50 kilometers along the country’s coastlines.The initiative seeks to allow foreigners to acquire direct ownership of real property located within the restrictedzone, so long as the use is for residential purposes and not for commercial purposes. The initiative is based on,among other things, the following considerations: i) in 1917 the ban was justified primarily on the fear of thethreat of invasion by foreign troops, the same which as of today is believed to have disappeared; ii) the currentprohibition applies only to border and coastline areas given that for real property located within the interior of theRepublic, it suffices that the foreigners agree to consider themselves as Mexican nationals with respect to suchreal property in order to directly acquire ownership to such; iii) lifting the ban on ownership by foreigners willnot prejudice the sovereignty, territory or other legal rights protected by the Mexican State; iv) the ban has beenevaded and overcome by means of investing through trusts so that the Mexican trust is named as the direct ownerof the real property acquired by the foreigner who is the beneficiary under the trust; v) the trust structure requiresadditional costs and transactions that discourage investment opportunities offered by the global economy; and vi)removing the ban will ensure certainty in the legal protection demanded by foreign investors in Mexico. Subjectto the initiative’s goals of attracting more investment and generating greater economic development in certaincoastal areas of Mexico, it is expected that, either in House of Representatives or in the Senate, certain technicaladjustments will be made to, for example, define more precisely the concepts of residential and commercial use.
In many countries, the provision of real estate services consists of the promotion and marketing of real estate, and it is required that such services be provided by individuals or companies that have gone through an accreditation process with an authority or a certifying association. Such process exists in order to professionalize the quality of service, training and updating of realtors and verify that they act ethically and are penalized for actions that do not conform to required minimum standards. The lack of regulation of realtors, or real estate brokers, in Mexico has led to a market that ranges from global companies with high quality and ethical standards to firms that, because of a lack of employment opportunities in the market, do not have sufficient knowledge or institutional support, which latter situation clearly has a negative impact on confidence in Mexico's real estate sector. Recently, some Mexican states have enacted laws regulating the provision of real estate services. In the case of the Federal District, the Real Estate Services Law of the Federal District (the "Law") establishes the obligation of realtors to register with the Registry of Professional Realtors, and obtain the corresponding accreditation, for which applicants must demonstrate their experience and knowledge in the field. The Law even states that realtors can obtain assistance, at their own risk, from realtor assistants, in order to provide services. Similarly, this Law also establishes an obligation upon companies to employ realtors who are registered and accredited by the Ministry of Economic Development of the Federal District, confirming that they are responsible for the services they provide, but without establishing specific penalties for any failure to do so. Existing laws in Mexico aimed at regulating the provision of real estate services are still in a very early stage, and much work remains to be done, such as establishing codes of ethics, mechanisms for penalties, etc. Nevertheless, it is still important to note that regulation in this sector is here to stay, and it is important to remain informed of progress in this area.
Recently, the Second Chamber of Mexico's Supreme Court of Justice (Suprema Corte de Justicia de la Nación or SCJN) approved judicial decision number 2a. /J. 34/2013 (10a.) under the heading, "Supplementary Laws. Requirements for Their Operation." In such case decision, the Second Chamber of the SCJN held that the use of supplementary laws may be proper to satisfy an omission in the law or to interpret its provisions and integrate such with other rules or general rules of principles contained in other laws. Based on the forgoing, the court held that in order for such a supplementary law to apply, the following is necessary: (i) that the law serving to supplement another law expressly establishes such possibility, indicating the law or norms that may be applied to such on a supplementary basis, or that a law establishes the supplementary application, fully or partially, to other laws; (ii) that the law being supplemented does not contemplate the legal concept or situations to which the supplementary law will apply or, if such are contemplated, the law being supplemented does not develop such or regulates such in a deficient manner; (iii) that the omission or legislative gap makes necessary the supplementary application of the law in order to resolve a pending legal issue, without addressing other legal issues that lawmakers did not intend to establish in the law being supplemented; (iv) that the applicable norms being applied on a supplementary basis would not run contrary to the underlying law such is supplementing, and only as long as such is consistent with its principle and the basis that specifically govern the issue in question. The above case decision is currently pending publication in the Weekly Federal Court Gazette.
All Mexican employers, whether individuals or entities, are required to calculate and pay mandatory profit sharing payments to employees within 60 days following the filing of their annual Mexican tax return, so PTU payments are due on May 30, 2013 for entities and June 30, 2013 for individuals . The obligation for employers to make such payments is based on the legal provisions in Section IX of Article 123 of the Political Constitution of the United Mexican States, which establishes that employees shall have the right to participate in their employer's profits in the amount of 10% of such employer's taxable income. As such, the following types of employees have the right to receive profit sharing payments: a).- permanent employees hired to carry out normal, long-term work for an employer, without regard to the number of days worked during the January 1 through December 31, 2012 fiscal year; b).- eventual permanent employees who have worked for an employer fewer than 60 days, whether continuously or sporadically, during the fiscal year referred to above; c).- former employees who have the right to claim profit sharing payments, when such rights have not lapsed.Mexico's Federal Labor Lay (Ley Federal del Trabajo), which serves as a supplementary regulation to Constitutional Article 123 above, establishes that certain businesses and organizations are exempt from the obligation to make profit sharing payments to employees, including, among others: (a) newly created businesses, during the first year of operation; (b) newly created businesses dedicated to manufacture a new product, during the first two years of operation; (c) newly-created mining and extraction industries, during the exploration period; and (d) private charitable organizations recognized by Mexican law as such, which with their own assets carry out humanitarian activities, without receiving any profit and without individually designating their beneficiaries.The legal provisions cited above also establish that some taxpayers are not eligible to receive profit sharing payments, including the following: (a) directors, administrators and general managers of a business; (b) individuals who are owners or co-owners of a business; (c) professional technicians, artisans and others who provide services through independent service arrangements; and (d) new, eventual permanent, employees who have worked fewer than 60 days during the employer's fiscal year.In order to be able to determine the profit sharing payments to be paid to employees, both the employer and its employees are required to designate representatives to serve on a Mixed Commission, which is responsible for calculating the employer's annual profit sharing payment. The Mixed Commission is in charge of calculating each individual's profit sharing payment, which is to say it is responsible for dividing the whole profit sharing payment among the individual employees. When the Mixed Commission has determined the amount to be paid as a result of the employer's profits, such amount is divided into two parts, with the first part being the same for all employees, taking into consideration the number of days worked during 2012, without regard to the individual salary; and the second amount being paid in proportion to the amount of salary received by each employee during the year, which is to say such payment depends on the salary received by each worker. Once this procedure has been completed, results of the profit sharing payment are published by the Mixed Commission at least 15 days prior to payment, which publication must be located in a visible place at the employer's place of business (normally, such publication is made through the Human Resources Department). It is important to clarify that the Federal Labor Law, which establishes the right of employees to participate in profit sharing payments, in no way implies any right whatsoever for employees to participate in the management or administration of the employer. Finally, amounts of unclaimed employee profit sharing payments in the current year are added to the employee profit sharing amounts that will be distributed in the following year.