Mexico Final Small

Transcription

Mexico Final Small

ME XI CO
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Trade
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Regulations
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Clearing
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COU NTRY
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COUNTRY OVERVIEW
BASIC DATA
Capital City:
Mexico City
Land Area:
1,964,375 sq km
Population:
112.5m in 2010
Main Towns:
Guadalajara (1.5M) Monterrey (3.2M) Tijuana (1.6M) Puebla (1.5M)
Climate:
Tropical in the south, temperate in the highlands, dry in the north.
Language:
Spanish is the official language. Over 60 indigenous languages are also
spoken, mainly Náhuatl (1.2m speakers), Maya (714,000), Mixtec (387,000)
and Zapotec (403,000)
Measures:
Metric System
Currency:
Peso (P s ). Average exchange rates in 2010: Ps12.64:US$1; Ps16.75:€1
Time:
Six hours b ehind GMT in Mexico City
Government:
President
Agrarian Reform
Agriculture
Communications & Transport
Economy
Energy
Environment & Natural Resources
Finance & Public Credit
Foreign Relations
Health
Interior
Labor & Social Welfare
National Defense
Public Education
Public Security
Social Development
Tourism
Central Bank Governor
Felipe Calderon
Abelardo Escobar Prieto
Francisco Javier Mayorga
Dionisio Pérez-Jácome Friscione
Bruno Ferrari
Jordi Herrera Flores
Juan Rafael Elvira Quesada
José Antonio Meade Kuribreña
Patricia Espinosa Cantellano
Salomón Chertorivski Woldenberg
Alejandro Poiré Romero
Javier Lozano Alarcón
Guillermo Galván Galván
Alonso Lujambio Irázabal
Genaro García Luna
Heriberto Félix Guerra
Gloria Guevara Manzo
Agustín Carstens
Source: The Economist Intelligence Unit as of February 2012
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COUNTRY OVERVIEW
A. POLITICAL STRUCTURE
Official Name
United Mexican States
Political Divisions
31 states and the Federal District (Mexico City); states are divided into municipalities
Form of Government
Presidential, with a constitutionally strong Congress
The Executive
The president is elected for a non-renewable six-year term and appoints the cabinet.
National Legislature
Bicameral Congress: 128-member Senate, elected for a six-year term, with 64 seats elected
on a rst-pastthe- post basis, 32 using the rst minority principle and 32 by proportional
representation; 500-member Chamber of Deputies (the lower house), elected for a
threeyear term, with 300 seats elected on a rst-past-the-post basis and 200 by proportional
representation.
Regional Governments
State governors are elected for six-year terms; each state has a local legislature and has
the right to levy state-wide taxes; municipal presidents are elected for three-year terms.
Legal System
There are 68 district courts and a series of appellate courts with a Supreme Court; federal
legal system, with states enjoying signicant autonomy.
National Elections
July 2006 (presidential and congressional); next elections July 2012 (presidential and
congressional upper and lower house).
National Government
The president, Felipe Calderón of the centre-right Partido Acción Nacional (PAN), heads a
minority government.
Main Political Organizations
Government: Partido Acción Nacional (PAN)
Opposition: Partido Revolucionario Institucional (PRI); Partido de la Revolución Democrática
(PRD); Partido Verde Ecologista de México (PVEM); Convergencia; Partido del Trabajo (PT);
Partido Nueva Alianza (Panal).
Citi Transaction Services Latin America & Mexico
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COUNTRY OVERVIEW
B. POLITICAL OUTLOOK 2012 – 2016
Despite some early campaigning blunders, the Economist Intelligence Unit’s baseline scenario is that Enrique Peña Nieto, the candidate of the Partido Revolucionario Institucional
(PRI), will win the presidential election, defeating the yet to be selected candidate of the
current ruling party, the centre-right Partido Acción Nacional (PAN), and Andrés Manuel
López Obrador of the centre-left Partido de la Revolución Democrática (PRD). There is little
hope of any significant progress on important political and economic reforms (including
labor, security, tax, energy and education bills) before the July 2012 election and prospects
thereafter are also uncertain, given the improbability of the next president commanding a
working majority in Congress. In principle, the PAN would tend to be in favor of addressing
the reform issues given its efforts in this area when it was in office, but it is likely to be less
supportive of similar PRI initiatives with no election on the horizon. Therefore, in the
absence of a political reform that would make it easier for the party of the incoming president to command a congressional majority, continuing legislative delays on structural
reforms are expected. Although complete gridlock is unlikely, as public pressure mounts for
some action to tackle rising crime and the slowing economy, any bills that pass are likely to
be heavily watered down, which will reduce their effectiveness. Aside from governability
issues, a worsening security situation with escalating drug-related violence will remain a
key concern for the next administration. according to official figures released in January, a
total of 47,515 murders were recorded from when the current administration took office in
December 2006 until September 2011. Increasingly brutal tactics by drugs cartels have convinced a growing number of people that the security strategy of the current president,
Felipe Calderón (which is centered on engaging the armed forces to confront the cartels),
is in urgent need of revision. However, a convincing alternative has not yet been put
forward by the opposition. Even if the next government chooses to concentrate its scarce
resources on tackling the most powerful drug-trafficking organizations, such as the Sinaloa
Cartel and Los Zetas, broader reforms to the police force and judiciary (not to mention poverty reduction and job creation schemes) would be required for substantial progress to be
achieved. In the absence of more radical. and unlikely measures to tackle the crime
epidemic (such as a partial legalization of drugs or stricter gun control in the US), this is
expected to remain a critical issue in the medium term.
The bilateral relationship with the US, Mexico’s dominant trade and investment partner and
host to around 13m people of Mexican origin, will remain the overriding foreign policy focus.
We expect closer co-operation on security and drugs policy in the medium term, as demonstrated by the recent announcement that the US is seeking a small physical presence in
Mexico in order to train and advise local security forces. However, the prospect of a significant step-up in US aid to support security improvements appears slim because of US fiscal
constraints, as well as Mexico’s long-running aversion to a more integrated role for the US
in its territory.
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COUNTRY OVERVIEW
In spite of support from the US president, Barack Obama, for a reform of US immigration
policy to help to assimilate undocumented Mexican workers into the formal workforce, the
resurgence of the Republican Party at the mid-term US elections in November 2010 and the
upcoming general elections this year mean that a comprehensive reform bill is unlikely to
advance before then. Although Mexico can boast one of the largest networks of trade agreements in the world (comprising over 40 countries on three continents), efforts to diversify
trade and investment relations away from the US have had limited success so far, with that
country still accounting for 80% of Mexico’s total exports in 2010.down from 90% in 2000.
Efforts in this direction are likely to be intensified in the forecast period, notably by discussing closer trade links with Brazil (which currently accounts for around 1% of export sales), as
well as with the Trans-Pacific Partnership (TPP) pact; the latter with the aim of boosting
trade and investment ties with Asia, including Japan.
C. ECONOMIC PERFORMANCE
In December 2011 the survey of the manufacturing sector by the Instituto Nacional de
Estadística y Geografía (INEGI, the national statistical institute) indicated that business
confidence increased by 1.7 points over the previous month on a seasonally-adjusted basis.
This reflected gains in orders and production, while employment and inventories declined.
The unadjusted indicator reached 50.9 points, an increase of 0.2 points over the last 12
months. Similarly, orders and production were higher than a year earlier, while employment, supplier deliveries and inventories remained lower. These trends are compatible
with a scenario of ongoing recovery but raised uncertainty as companies continue to
increase production and maintain a stable level of new orders, while at the same time
remaining reluctant to increase employment while they let inventories run down. If economic activity in the US continues to improve, domestic manufacturing production is likely
to also stay on a path of growth. However, the seasonally-adjusted index of consumer confidence edged down 0.69% from November to December 2011. This points to concerns
from households over the recovery losing steam and a possible intensification of the headwinds from the global economy in 2012. The unadjusted series stood at 90.8 points, which
was 0.4% lower than a year ago. Although on average the index has been relatively stable
during the past few months, there seems to be a slight downward trend in all components
except purchases of durable goods.
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In December 2011 the headline consumer price index increased by 0.8% month on month and 3.8%
compared to the same month in 2010. This was the highest year-on-year rate seen since the beginning of the year, and was higher than the 3.5% rate seen in November. The monthly increase in
December reflected a 1.9% rise in non-core prices, marking the sixth consecutive increase and the
highest jump for the month of December since 2000. The main driver was non processed foodstuffs,
which rose by 4.3% during the month, reflecting a 2.7% increase in prices of meat products. This
item added 0.4 percentage points to headline inflation during December. Meanwhile, core prices
increased 0.5%, the highest jump since January 2010. Processed foodstuffs rose 0.7% and added
0.2 percentage points, while other services increased 0.7% and contributed 0.1 percentage points to
headline inflation. Overall, the spike in inflation can be partly explained by a combination of higher
energy prices, exchange rate depreciation and negative weather conditions. But assuming that
these pressures recede, the 12-month change in headline inflation will edge down during the first
quarter of 2012, and remain stable thereafter. Given the possibility of external shocks, it is too early
to discount the possibility of inflation bouncing back in the second half of the year. And with uncertainty clouding the global macroeconomic outlook, the internal debate within the Banco de México
(Banxico, the central bank) on whether to cut rates is likely to continue and intensify during the first
few months of 2012.
During the first two weeks of January, the exchange rate regained ground and appreciated by 4.5%,
from a low of Ps14.2:US$1 in late November to Ps13.6:US$1. This strengthening partly reflects
Banxico’s decision to reintroduce dollar auctions of US$400m per day at the end of November,
although so far not even one has been awarded. In addition, recent better than expected data
releases in the US (which prompted the Economist Intelligence Unit to revise its 2012 forecast for
GDP growth in that country upward from 1.3% to 1.8%) could have also helped reassure the markets
that economic activity will continue improving. However, a bigger than expected deterioration in
global economic conditions could have a significant effect on the exchange rate, leading to a
pronounced depreciation of the peso. For Banxico, the most important objective is to allow an
orderly correction of the exchange rate and avoid sharp adjustments that could jeopardize inflation
expectations. In addition, high volatility could also adversely affect consumer and business expectations, and therefore the overall pace of the recovery. This helps to explain the decision to reintroduce dollar auctions of a limited amount. At the same time, the weakening of the currency in an environment of global economic slowdown is not an entirely negative event, as it can help to alleviate
some pressures stemming from lower foreign demand and improve relative competitiveness against
some of the Asian economies. Over the medium term, Banxico will probably favor adjustment taking
place through the currency rather than interest rates, which are likely to increase and eventually
become attractive for foreign investors once again.
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E. ECONOMIC FORECAST
Economic Growth
Stronger than expected GDP growth in the third quarter prompted us to revise up our
full-year estimate for 2011 last month, from 3.4% to 3.9%, but the outlook for 2012
remains highly uncertain, with signicant downside risks to our (unchanged) forecast of
3.1%. Despite some trade diversication, close synchronicity with the US business cycle
leaves the economy vulnerable to any deterioration in economic conditions in the US
market. Recent US indicators have been more positive, but an ongoing problem is that the
collapse in property prices has eroded the wealth of the household sector, which is already
saddled with high levels of debt. This will have an impact on US domestic demand, which
will feed through into Mexico’s exports (which account for around one-third of total GDP).
As a result, growth of export volumes will weaken in 2012, but on the benign assumption
that the global picture picks up in 2013, should accelerate to an average of 6.6% per year
in 2013-16. Real imports will follow a similar pattern, also remaining weak in the early part
of the forecast period, before picking up thereafter. Mexico would not be aected directly
by an escalation of economic diculties in the euro zone, but with European banks (several
of which are active in Mexico) needing to meet stricter capital requirements, they could
slow credit growth, thereby dampening domestic demand. At the same time, the banking
sector appears solid and well capitalized (see Economic policy) and both bank deposits
and commercial bank loans continue to expand at a satisfactory pace, according to the
most recent data.
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Low inflation will support some gains in real wages, but weak job creation will prevent private
consumption growth from rising significantly above 4% in the forecast period. Real lending
rates will remain low and credit growth is expected to remain firm, but limited banking penetration suggests that credit will fail to stimulate consumption significantly, despite recent
efforts to improve credit provision. Fixed investment growth will pick up only from 2013, on
the assumption that some industrial restructuring in the US prompts companies to set up in
Mexico. However, shallow capital markets will restrict financing options and high (and rising)
levels of violence will deter investment in some parts of the country. Government consumption growth will also be weak, reflecting revenue constraints faced by the central government
and conservative borrowing policies.
On the supply side, export-oriented manufacturing will suffer on the back of the gloomy
global outlook, with domestically oriented services expected to perform marginally better. In
the medium term, restructuring of the US automotive industry is likely to benefit Mexico, as
some production may shift to more cost-effective Mexican locations. Evidence of some
Chinese firms setting up factories in Mexico for export to the US, as well as some firms choosing Mexico over China, owing to lower transport costs and rising Chinese wages, will also
provide some support in the medium term. Sectors including utilities and construction, which
depend to a significant extent on domestic demand, will stay weak in 2012, but should post
stronger growth from 2013. On the negative side, growth in tourism will be deterred by high
crime levels, while poor infrastructure will cap growth in agriculture. Expansion of financial
services, which underpinned GDP growth in the pre-crisis years, will also remain below potential, owing to ongoing cautious lending practices on the part of banks.
Inflation
Disciplined scal management over the economic cycle, weak demand-side pressures and
currency appreciation until August have so far kept ination contained, but, as the recent
weakening of the currency feeds through to consumer prices, inationary pressures are
expected to rise in early 2012.
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However, this will be muted by only modest increases in real wages and ample spare
capacity, which will prevent domestic demand from exerting signicant pressure on ination. We retain our baseline assumption that ination should remain broadly within the
2-4% target range in 2012, but with a heightened risk of overshooting of the ocial
target, given monetary easing. Ination will be signicantly lower than the average rate of
5.2% in 2008-09, but much higher than OECD ination (which will record an annual average
rate of 2.2% in the forecast period).
Exchange Rates
Mexico’s large external financing requirement and exposure to the US economy make the
peso particularly vulnerable to shifts in market sentiment, as shown by a sharp currency
depreciation in mid-September when the peso weakened from Ps12.8:US$1 to Ps13.9:US$1
in the space of a week. The peso has remained vulnerable since then, reaching Ps14.2:US$1
in late November before recovering to around Ps13.6:US$1 in mid-January, partly in view of
better US data and consequent rosier prospects for Mexico’s outlook. Further weakening
in 2012 is possible given the gloomy global picture, which may deter investors from riskier
asset classes such as emerging market currencies, but we do not expect the same extent
of weakening as in 2008-09 (when the peso reached nearly Ps15:US$1 in February 2009).
Banxico’s decision to launch daily auctions of US$400m of reserves when the peso weakens by more than 2% will help to control currency volatility. Banxico’s total foreign
reserves stood at US$144 at the beginning of January, up from US$121bn at year-end 2010,
and remain relatively stable given that the bank continues to accumulate them from transactions with Petróleos Mexicanos (Pemex, the state oil firm) and through purchases of
foreign exchange with market participants. Moreover, the peso does not appear currently
overvalued in real terms, and we expect stronger foreign direct investment (FDI) and portfolio inflows in the forecast period.
External Sector
From an average of 0.6% of GDP in 2009-10, the current-account decit is expected to
widen in the forecast period, reaching 3.3% of GDP by 2016. This will be mostly owing to a
widening of the merchandise trade decit to US$45.9bn in 2016 (equivalent to 3% of GDP).
The services decit will remain relatively stable as a share of GDP over the forecast period,
as sluggish growth in tourism (on the back of security concerns and economic slowdown
in Mexico’s key markets) is oset by still-high freight costs, whereas the income decit will
ease as a share of GDP, owing to higher returns on international reserves and lower
interest payments on foreign debt (these factors will oset rising prot repatriations from
foreign companies operating in Mexico). The current transfers surplus.which is dominated
by workers’ remittances from Mexicans overseas.has been falling since 2008 as a share
of GDP, but will pick up moderately in 2012-16 (although at 2.4% of GDP in 2016, it will
remain signicantly lower than the 2.7% of GDP peak in 2006). Our forecasts rest on the
assumption that the current-account decit will remain manageable and largely nanced
by FDI inows, although portfolio ows will also be strong in the short term, supported by
interest rate dierentials with developed economies.
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CITI SOLUTIONS AND SERVICES
CASH MANAGEMENT SERVICES
A. GENERAL BUSINESS TERMS AND CONDITIONS
Account Services
Under Mexican law. Customers who wish to open Demand Deposit Accounts (or checking
accounts) may do so in USD and in Mexican Peso. USD accounts may be interest bearing,
accounts denominated in Mexican Peso may receive interest pegged at a rate under Cetes
(Certicados de la Tesoreria). Mexican banks provide concentration accounts through which
deposits can be made at any of the branches. There are no baking laws or regulations
restricting automatic funds concentration, funding of accounts balances or intra-day
overdrafts.
Payments
Almost 80% of payment transactions in Mexico are made via check or cash. In 1995,
Banxico introduced several reforms to the Payment System, with the main objective of
converting most of the payments to a more ecient system. First step was the creation of
a wider Electronic Payment System (Sistema de Pagos Electronicos de Uso Ampliado –
SPEUA) that worked until July 2005 when a new system called SPEI (Sistema de Pagos
Electronicos Interbancarios) arrived. SPEI has dramatically changed the way Financial
Institutions and Corporations move funds. This system is comparable to the U.S. Federal
Wire. The postal system is generally unreliable and therefore the seller usually sends a
messenger to the buyer’s payment center on a specied payment date. Banamex is the only
bank in Mexico capable of making payments to almost any Mexican Bank in the country.
Collections
The collection methods used by companies in Mexico include:
• Collection of checks at the client’s oce via specialized messenger service (ECD) –
Depósito Electrónico Banamex
• Direct deposit to the account using a single reference for identication and amount
and due date validating (optional) with cash and checks – Cuenta Concentradora or
Servicio Electrónico de Pagos
• Credit to the account via funds transfer – Cuenta Concentradora
• Direct Debit, interbank debits to local banks - Domiciliación
• Commercial cards, Distribution Cards, and Purchase Cards to collect from customers
facilitating a credit line with corporate risk.
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• On Line Invoicing, it is an electronic collection service where you can submit, collect,
reconcile and visualize the detail of the company’s invoices – Factura Electrónica
Large Volume Cash Center
Cash centers exist in cities like Mexico City so that large sums of cash can be collected.
The cash is usually picked up by an armored car service (hired by the client) that keeps
the amount overnight and deposits it the next day to a concentration bank. This type of
service is mainly used by utility companies, public organizations and corporations that
collect large amounts of cash (for example, consumer goods companies that collect cash
directly from their point of sale) – Servicios de Efectivo Tradicional and Electrónico.
B. BANAMEX’S ACCOUNTS SERVICES SOLUTIONS
Resident and Non-resident SmartAccount - Local Currency
Smart Account Local Currency
• In this type of checking account no interest rate is paid
• Requires an initial deposit of: $10,000 (MXN)
• Minimum average balance of: $10,000 (MXN)
Smart Account Premium
• Interest rate of CETES (Treasury Certicates) is paid according to the monthly average
balance
• Offers an interest rate of 15%, 60%, 65%, 70%, 80%, 90% or 100% CETES
Smart Accounts Local Currency with Interest
• Minimum average balance of: $20,000 (MXN)
• Interest rate is paid according to the monthly average balance of the checking
account negotiated between the executive and client.
Resident and non-resident SmartAccount - U.S. Dollar
SmartAccount – USD
• Requires an initial deposit of: $500(USD)
• No interest rate is paid in this type of checking account
• Minimum average balance of: $500 (USD)
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SmartAccount – USD with interest
• Requires an initial deposit of: $1,000(USD)
• Minimum average balance of: $1,000 (USD)
• Oers an interest rate of 75%, 90% or 100% of LIBOR
* Tax rate is charged on the amount deposited not in the interest rate, if the tax rate is
higher than the interest rate there is no interest paid.
Documentation & Regulation
To open an account with Banamex, companies must submit:
• Copy of the company’s incorporation agreement, and powers of attorney.
• Oficial ID on the company’s representatives (signatories and accounts ocers)
• Copy of the company’s RFC (taxpayer ID)
• Copy of the company’s proof of address in Mexico
Basic Transactions, Services & Fees
Basic transactions, services & fees (some fees apply if the event occurs) are charged to
the checking account.
Basic Transactions:
• Opening fee
• Account opening
• Annual management fee
• Check issued
• Free checks per month
Concepts only apply if the event occurs:
• Monthly minimum average balance
• Account management when balance is lower than the monthly minimum
• Returned check due to insucient funds
• Returned deposited check
C. PAYMENT SOLUTIONS IN MEXICO
Cross Border Payments
CitiDirect Online Banking
WorldLink SM
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Local Payments
PayLink SM
Local electronic banking, BancaNet Empresarial is used for local tax payments and service
payments, such as: mobile phone, telephone lines, electricity, etc.
Both services include electronic funds transfers (third parties and payroll), manager
checks and local referenced payment orders.
Custom Taxes
Impuestos Aduanales is the service that enables your company to pay directly custom
taxes, derived from your international commerce transactions, without the participation
of a third party.
D. BANAMEX’S COLLECTIONS SOLUTIONS IN MEXICO
Cross Border Collections
Funds Transfers
International funds transfers can be received in USD or MXN. The foreign exchange (FX)
applied will be imposed by FX desk, and the value date is same day if received before 1:30
p.m. Domestic funds transfers are accepted in local currency and USD accounts located in
Mexico are treated as Payments Orders.
Local Collections
Collections can be processed at the branch level with or without a reference. This can be
a numeric or alphanumeric reference (Cuenta Concentradora). Automated collections can
be done with the Banamex Direct Debit product (Domiciliación - similar to ACH debit in
the U.S.).
E. DELIVERY SYSTEMS
Cross Border Delivery Systems
CitiDirect Online Banking SM
International Delivery System
SWIFT
• Local Address: BNMXMXMM
• Messages time limits: 9:00 a.m. – 1:30 p.m. is the operative schedule, but the system
can receive information at all hours.
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• Message types accepted: All messages. However, MT (operative messages) must be
received through an authenticator (thus must have a prior agreement with Banamex).
• CitiDirect Online Banking SM Local Delivery Systems
• CitiDirect Online Banking
• Scheduled CitiDirect On Line times in Mexico 9:00 a.m. to 6:00 p.m. BancaNet Empre
sarial
• Available 24/7 for book to book transactions. Scheduled times for other services.
LIQUIDITY
Currently, the Mexican peso is a fully convertible, free-oating currency and there are no
exchange controls. Local and foreign currency accounts are available to resident and nonresident entities. All nonresident entities are required to register any foreign currency
accounts held in Mexico with the banking authorities.
There are generally no “lifting fees” (Taxes that companies may be required to pay when
moving funds out of a country) on transfers between resident and non-resident accounts.
There are Mexican Peso and USD Accounts available in Mexico, both for resident and nonresident entities.
Banks are allowed to pay interest on any account, but in practice rarely pay interest on
current (demand deposit) accounts, and if they do, the interest payment is generally much
lower than that which could be earned in an investment instrument.
A. OVERDRAFTS
Overdrafts (Líneas de sobregiro) are available to both resident and non-resident entities,
but are a rather expensive nancing mechanism with interest charged at more than twice
the rate on TIIE (Tasa de Interés Interbancaria de Equilibrio), Mexican benchmark interbank
money market rate. It also depends on each banking relationship and the particular client’s
credit prole and its bank’s appetite for providing the credit line.
B. BANK LOANS OF CREDIT/LOANS
Credit lines are available to both resident and non-resident entities, for working capital
and long term purposes. Typically, short term loans are known as “Credito Revolvente”. An
operational disadvantage of short-term debt is the continuing need to renegotiate or “roll
over” the debt. A lender (bank) may decide not to roll over the loan or renew the credit
line at maturity due to changing nancial variables in the company or changes in general
economic conditions.
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C. BANKERS ACCEPTANCES (BA)
In Mexico, this type of instrument is rarely used for short-term funding. Its rates are based
on the CETE or the Mexican benchmark interbank money market rate, known as “TIIE”.
D. COMMERCIAL PAPER (CP)
Most MXN denominated commercial paper is issued by large companies and non-banking
financial institutions with strong credit quality and ratings. The rates are based on TIIE or
CETE’s and discounted by brokers. Paper has to be issued as part of a revolving one-year
credit program, and the typical tenor may range from 7 to 91 days.
This type of instrument provides a quick source of low-cost short-term nancing for large
companies which are active in the market.
E. SUPPLIER CREDIT
Depending on the relationship between companies and their suppliers, dierent tenors
of credit, ranging from 30 to 90 days after delivery, may be extended. There are some
highly specialized relationships in which a “supplier-managed” replenishment program is
established. In this program, the supplier maintains and tracks the inventory of materials it
provides to a customer, and as the inventory is used, the supplier bills the customer for the
items and replenishes the supply.
F. TRADE BILLS – DISCOUNTED
Banks will often discount trade bills for up to 90 days with recourse, but this form of nancing
is most commonly used by small exporters. The most popular tenor is 45 days.
G. INTER-COMPANY BORROWING
It is common that parent companies nance their subsidiaries by extending supplier credit.
Additionally, foreign-owned subsidiaries in Mexico may also access USD funding through
inter-company loans. The usage of a cash concentration product (ZBA) facilitates this role,
as funding is sent via the parent, and funds are controlled and disbursed via a “core account”
(master account). This account may establish limits on the funds it provides, to the related
“payables accounts”.
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H. FACTORING
Factoring is another alternative for obtaining liquidity and involves the sale of receivables to
a company that specializes in nancing and managing receivables.
TRADE SERVICES
A. TRADE FLOW
2010 EST
Exports
U.S. $291.3 billion
Imports
U.S. $297.8 billion
B. TRADE PRODUCTS AND SERVICES
Trade Services
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Letters of Credit
Documentary Collections
Standby Letters of Credit
Electronic Banking (Transaction Initiation)
Trade Finance
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Pre & Post Export Financing
Import Financing
Draft Discount
Medium term nancing
Exim or ECA’S
Value added tailor made transaction
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C. FOREIGN EXCHANGE REGULATIONS
FX Controls: No
Central bank provides the FX: No
Trade Transactions reported: No
Trade Obligations reported: No
Mandatory repatriation of export proceeds: No
Cash-deposit for import: No
Import License: Yes, only for restricted / luxury articles
Import Restrictions: Depending on sector
O-shore accounts: Yes
Restrictions on hard currency transfers: No
Restrictions on income in investments: Yes, for restricted investments (oil, nuclear, etc.)
Operates under ALADI: Yes
LOCAL REGULATIONS
A. IDENTIFICATION FILE FOR NATIONAL LEGAL ENTITIES
I. Provided that the client is a legal entity of Mexican nationality, the corresponding
identication le must meet the following requirements:
a) It must contain settled the following:
- Firm name;
- Line of business, activity or purpose;
- Nationality;
- Code of the Federal Taxpayer Registry;
- Serial number of the Advanced Electronic Signature, when available;
- Permanent address (including street name, avenue or road duly specied, external number
and, where appropriate, interior, colony or county, city or town, state and zip code);
- Permanent address phone number;
- Email, if any;
- Date of incorporation, and Name(s) and surname, without abbreviations, of the manager
or managers, director or legal guardian who, with his/her signature, can bind the legal
person for purposes of opening an account, creating a contract, or performing the
operation in question.
b) In addition, each entity shall obtain and include in the client identication le a copy of at
least the following documents relating to the legal entity:
(i) Testimony or certied copy of public documents providing their legal existence entered in
the appropriate public record, according to the nature of the legal entity, or any instrument
which include details of its constitution and its entry in that public record, or a document
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that, according to the regime applicable to the legal entity concerned, proves its existence.
In the event that the legal entity is newly formed, and such, it is not yet registered in the
appropriate public record in accordance with its nature, the legal entity shall obtain a letter
signed by a person legally empowered to prove his/her identity in terms of public instrument
verifying its legal existence referred to in subsection b) paragraph (iv) of this section, stating
the obligation to carry out the respective entry and provide, at the time, the data for the
entity itself;
(ii) Tax Identication Card issued by the Secretary or evidence of the Advanced Electronic
Signature, when the corresponding legal entity has it;
(iii) Proof of residence referred to in subsection a) of this section II, in terms of what is stated
in subsection b) paragraph (iii) of section I [1];
(iv) Testimony or certied copy of documents containing the powers of the legal
representative/s, issued by a public notary, when not contained in public documents attesting
the legal existence of the legal entity in question, and the personal identication [2] of each
of those representatives, pursuant to subsection b), paragraph (i) of section I [3];
II. Provided that the client is a person of foreign nationality, the entity in question must
observe the following:
a) In the event of the individual to declare to the entity that he/she does not have the
immigration status of immigrant or immigrated in terms of the General Law of Population,
the respective identication le shall contain settled the same data as specied in subsection
a) of section I, and besides this, the entity shall obtain and include in that le a copy of
the following documents: passport and ocial document issued by the National Institute of
Migration, when it has the latter, stating its legal entry or stay in the country, as well as
the document conrming the address of the client at his/her place of residence, in terms of
subsection b) paragraph (iii) of section I of this provision. In addition, the entity concerned
shall obtain from the individual referred to in this subsection, a declaration under subsection
b), paragraph (iv) of section I of this provision.
B. IDENTIFICATION FILE FOR FOREIGN ENTITIES
a) In the case of foreign legal entities, the respective identication le shall contain settled the
following:
- Firm name;
- Line of business, activity or purpose;
- Nationality;
- Code of the Federal Taxpayer Registry and/or serial number of the Advanced Electronic
Signature, when available;
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- Email, if any;
Date of incorporation
b) In addition, each entity shall obtain and include in the client identication le a copy of at
least the following documents relating to the legal entity:
(i) Document that proves conclusively its legal existence, as well as information that helps to
determine its ownership structure and in the event that this legal entity is classied as high
risk client in terms of the 25th of these provisions. Also, it should be collected and included
documentation identifying the respective shareholders or members;
(ii) Proof of residence referred to in subsection b), in terms of what is stated in subsection
b), paragraph (iii) of section I of this provision;
(iii) Testimony or certied copy of documents containing the powers of the legal representatives,
issued by a public notary, when not contained in public documents attesting the legal existence
of the legal entity in question, and the personal identication of each of those representatives,
pursuant to subsection b), paragraph (i) of section I or subsection a) of this section III, as
applicable. For those legal representatives who are outside the national territory and which
do not have passports, personal identication must be, in any case, an original document
issued by ocial authority in the country of origin containing the photograph, signature, and
address of that representative. For purposes of the stated above, valid personal identication
documents include, driver’s license and credentials issued by federal authorities of the
country concerned. The verication of the authenticity of these documents is responsibility
of the entities; Regarding the document referred to in paragraph (i), the entity in question
shall require that this is duly legalized or, in the case that the country where the document
was issued is part of “The Hague Convention”, the Requirement of Legalization for Foreign
Public Documents is abolished, according to The Hague, Netherlands, October 5, 1961. It will
be only required that the document bears an apostille attached to the referred convention. In
the event that the client does not submit duly legalized or apostilled relevant documentation
referred to in paragraph (i), it will be the entity’s responsibility to ensure the authenticity of
that document.
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C. IDENTIFICATION FILE FOR FOREIGN GOVERNMENTS
a) In the case of foreign governments, the respective identication le shall contain settled the
following:
- Name;
- Activity or purpose;
- Nationality;
- Email, if any;
- Date of incorporation.
b) In addition, each entity shall obtain and include in the respective identication le of the
foreign legal entity, a single copy of at least the following documents related to that legal
entity:
that document.
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D. IDENTIFICATION FILE FOR INTERNATIONAL ORGANIZATIONS
a) In the case of International Organizations, the respective identication le shall contain
settled the following:
- Agreement of incorporation/ document evidencing that are participating members
- Date
- Object
- Name;
- Activity or purpose;
- Nationality;
- Email, if any;
- Date of incorporation.
b) In addition, each entity shall obtain and include in the respective identication le of the
foreign legal entity, a single copy of at least the following documents related to that legal
entity:
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that document.
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MARKET GUIDE FOR TREASURY
Allowed —
No material
restrictions
Allowed —
Straightforward
regulations,
approval or
license
Operating Accounts1
Allowed —
Challenging
regulatory
approval or
license
Allowed —
Subject to a
complex set
of rules
Strictly
Prohibited
Non-Residents
Residents
Non-Residents
Residents
Non-Residents
Residents
Non-Residents
Residents
Non-Residents
Residents
Non-Resident to Resident
Resident toNon-resident
Non-Residents
Residents
Onshore local currency
Onshore foreign currency
Offshore local currency
Offshore foreign currency
Overdrafts
Interest-Bearing Accounts
Onshore local currency operating accounts
Onshore foreign currency operating accounts
Time Deposits
Domestic Notional Pooling2,3
Inter-company Lending5
FX Convertibility/Transferability
• Local currency is freely convertible domestic and offshore.
Tax and Transfer Pricing Considerations
• Corporate t ax variable according to business, should be checked on case-by-case
basis.
Other Payment and Clearing Considerations for Treasury
• No major restrictions on netting.
• No major restrictions on Non-Residents making payment on behalf of Residents.
For more information, please visit www.transactionservices.citi.com.
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MARKET GUIDE FOR TREASURY
Notes:
1 Oshore a ccounts for Residents cannot be actively promoted by local banks, but can be
ofered through anyCitibank office abroad.
2 Notional p ooling is not allowed in Mexico.
3 Physical p ooling is allowed for either Resident or Non-Resident.
4 Companies m ust sign intercompany credit agreements and charge market rate interests
among them.
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CONTACT INFORMATION
Industry Sector Heads
Carolina Juan
Treasury and Trade Solutions Client Sales Management
Latin America & Mexico Head
Citi Transaction Services
Email: [email protected]
Cel: + 57 (316) 743 - 9347
Of. Phone: +57 (1) 639 - 4026
Industrials Sector
Ines Vargas Barrera
Cel: +52 (181) 8366 - 5190
Of. Phone: +52 (81) 1226 - 8525
Branding, Consumer and Healthcare Sector
Oscar Mazza
Cel: +1 (305) 588 - 9396
Of. Phone: +1 (305) 347 - 1336
Technology, Media and Telecom Sector
Gabriel Kirestian
Cel: +54 (911) 3301 - 4826
Of. Phone: +54 (11) 4329 - 1516
Energy, Power and Chemicals Sector
Peter Langshaw
Cel: +55 (11) 6183 - 6958
Of. Phone: +55 (11) 6183 - 6958
Public Sector
Jorg Paasche
Cel: +52 (1) 55 5453 - 0103
Of. Phone: +52 (55) 2226 - 6020
Based: Mexico DF, Mexico
Brazil
Adoniro Cestari
Cel: +55 (11) 7130 - 9447
Of. Phone: +55 (11) 4009 - 7838
Based: Sao Paulo, Brazil
Central America
Evelin Madrid
Cel: + 506 8701 - 4529
Of. Phone: +506 2588 - 7541
Based: San Jose, Costa Rica
Mexico
Miguel Ytuarte
Cel: +52 (1) 55 4088 - 2284
Of. Phone: +5255 (1226) 8895
Based: Mexico DF, Mexico
Sales Heads
Andean Region
Carolina Juan
Cel: + 57 (316) 743 - 9347
Of. Phone: +57 (1) 639 - 4026
Based: Bogota, Colombia
Argentina
Adrian Scosceira
Cel: +54 (911) 5674 - 6966
Of. Phone: +54 (11) 4329 - 1194
Based: Buenos Aires, Argentina
Non Bank FI Sector (NFBI)
Ricardo Dessy
Cel: +54 (911) 6641 - 9752
Of. Phone: +54 (11) 4329 - 1471
Based: Buenos Aires, Argentina
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Citi Transaction Services
www.transactionservices.citi.com
© 2012 Citibank, N.A. All rights reserved. Citi and Arc Design is a trademark and service mark of Citigroup Inc., used and registered throughout the world. All other
trademarks are the property of their respective owners.

Mexico Final Small

Transcription

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