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Ease of Doing Business in

Mexico

Mexico Download Profile (2060.2KB, pdf)
Region Latin America & Caribbean
Income Category Upper middle income
Population 127,017,224
GNI Per Capita (US$) 9,710
City covered Mexico City, Monterrey

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 47 45 down
2
72.29 71.95 down
0.34
Starting a Business 93 72 down
21
85.74 86.92 down
1.18
Dealing with Construction Permits 83 87 up
4
69.79 68.91 up
0.88
Getting Electricity 98 84 down
14
68.32 70.11 down
1.79
Registering Property 101 111 up
10
61.05 56.89 up
4.16
Getting Credit 5 5
-
90.00 90.00
-
Protecting Minority Investors 53 51 down
2
60.00 60.00
-
Paying Taxes 114 112 down
2
65.81 65.85 down
0.04
Trading across Borders 61 60 down
1
82.09 82.09
-
Enforcing Contracts 40 42 up
2
67.01 65.69 up
1.32
Resolving Insolvency 30 29 down
1
73.11 73.03 up
0.08

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

Viewing the data for

DB 2017 DTF (% points):

59.08

DB 2016 DTF (% points):

54.06

Change in DTF (% points):

up5.02

STANDARD PROPERTY TRANSFER
Property value MXN 7,083,838
City Mexico City
Indicator Mexico City Latin America & Caribbean OECD high income
Procedures (number) info_outline 8 7.1 4.7
Time (days) info_outline 46 68.6 22.4
Cost (% of property value) info_outline 5.6 5.8 4.2
Quality of the land administration index (0-30) info_outline 16 11.9 22.7
  • Measure of efficiency
    No. Procedure Time to Complete Associated Costs
    1

    The notary obtains the Zoning Certificate of the property

    Agency: Ministry of Housing and Urban Development of the Federal District (Secretaría de Desarrollo Urbano y Vivienda del Distrito Federal 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.


    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 AU-01.

    - 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.

    -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.

    12 days (simultaneous with Procedures 2, 3, 4 & 5) MXN 1,336
    * 2

    The notary obtains a non-encumbrance certificate

    Agency: Public Registry of Property of the Federal District ("Registro Público de la Propiedad y del Comercio del Distrito Federal")

    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.


    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 for the Federal District 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://www.consejeria.cdmx.gob.mx/index.php/dgrppyc/certificado-de-existencia-o-inexistencia-de-gravamenes

    1 day if urgent process, 7 days if regular process (simultaneous with Procedures 1, 3, 4 & 5) MXN 540.00 (Non urgent) MXN 1,080.00 (Urgent)
    * 3

    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 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 (simultaneous with Procedures 1, 2, 4 & 5) 0.2% of the Property Value
    * 4

    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 for the Federal District 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.


    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 144.70.

    less than a day (online procedure simultaneous with Procedures 1, 2, 3 & 5) MXN 144.7
    * 5

    The notary checks the good standing of the seller on the property tax (predial)

    Agency: Ministry of Finance of the Federal District (Secretaría de Finanzas del Distrito Federal)

    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 the Federal District; 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 a day if checked online or 13 days if certificate of good standing ("constancia de no adeudo") is requested (online procedure, simultaneous with procedures 1, 2, 3 & 4). MXN 144.7 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 Federal District)

    • Copy of the official identification of the seller's and buyer's representatives


    The notary will procure on behalf of the parties:

    • The zoning certificate (obtained in Procedure 2)

    • The valuation (obtained in Procedure 3)

    • Certificate of good standing with the water company (obtained in Procedure 1)

    • Certificate of good standing in the property tax (obtained in procedure 4)


    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 28% 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 2015), 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 342,412.82 according to our 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 94,072.57: MXN 207.92. Rate between these amounts 0.01105
    From MXN 94,072.58 to MXN 150,516.06: MXN 1,247.52 Rate between these amounts 0.03315
    From MXN 150,516.07 to MXN 225,773.88: MXN 3,118.80 Rate between these amounts 0.05526
    From MXN 225,773.89 to MXN 451,547.89: MXN 7,277.20 Rate between these amounts 0.03684
    From MXN 451,547.90 to MXN 1,128,869.71: MXN 15,594.00 Rate between these amounts 0.03530
    From MXN 1,128,869.72 to MXN 2,257,739.43: MXN 39,504.80 Rate between these amounts 0.04328
    From MXN 2,257,739.44 to MXN 4,349,334.30: MXN 88,366.00 Rate between these amounts 0.04722
    From MXN 4,349,334.31 to MXN 11,326,391.96: MXN 187,128.00 Rate between these amounts 0.04768
    From MXN 11,326,391.97 to MXN 20,887,467.14: MXN 519,800.00 Rate between these amounts 0.04812
    From MXN 20,887,467.15 and up: MXN 981,000.00 Rate after this amount 0.04997


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

    Until MXN 143,183.00: Fix fee of MXN 4,172.00
    From MXN 143,183.01 to MXN 286,366.00: Rate of 1.125%
    From MXN 286,366.01 to MXN 572,732.00: Rate of 0.975%
    From MXN 572,732.01 to MXN 1,145,464.00: Rate of 0.825%
    From MXN 1,145,464.01 to MXN 2,290,928.00: Rate of 0.675%
    From MXN 2,290,928.01 to MXN 4,581,856.00: Rate of 0.578%
    From MXN 4,581,856.01 to MXN 9,163,713.00: Rate of 0.420%
    From MXN 9,163,713.01 onwards: Rate of 0.327%
    7

    The Notary lodges the preventive notice (aviso preventivo) at the Public Registry of Property of the Federal District

    Agency: Public Registry of Property of the Federal District ("Registro Público de la Propiedad y del Comercio del Distrito Federal")

    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 the Federal District

    Agency: Public Registry of Property of the Federal District ("Registro Público de la Propiedad y del Comercio del Distrito Federal")

    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 15,950

    * Takes place simultaneously with previous procedure.

  • Measure of quality
    Answer Score
    Quality of the land administration index (0-30) 16.0
    Reliability of infrastructure index (0-8) 5.0
    What is the institution in charge of immovable property registration? Registro Público de la Propiedad y de Comercio
    In what format are the majority of title or deed records kept in the largest business city—in a paper format or in a computerized format (scanned or fully digital)? Computer/Scanned 1.0
    Is there an electronic database for checking for encumbrances (liens, mortgages, restrictions and the like)? Yes 1.0
    In what format are the majority of maps of land plots kept in the largest business city—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://www.consejeria.df.gob.mx/index.php/rppyc lists all the s...
    Is the applicable fee schedule for any 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://www.consejeria.df.gob.mx/portal_old/civica/RPPyCDF01Costos2015.pdf
    Does the agency in charge of immovable property registration commit to delivering a legally binding document that proves property ownership within a specific time frame–and if so, how does it communicate the service standard? Yes, online 0.5
    Link for online access: The website http://www.consejeria.df.gob.mx/index.php/rppyc lists all the s...
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the agency in charge of immovable property registration? No 0.0
    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 2015:
    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.df.gob.mx/TRAM/InformacionDetalladaTramite.aspx
    Does the cadastral or mapping agency commit to delivering an updated map within a specific time frame—and if so, how does it communicate the service standard? Yes, online 0.5
    Link for online access: http://ovica.finanzas.df.gob.mx/TRAM/InformacionDetalladaTramite.aspx
    Is there a specific and separate mechanism for filing complaints about a problem that occurred at the cadastral or mapping agency? No 0.0
    Geographic coverage index (0–8) 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 formally registered at the immovable property registry? No 0.0
    Are all privately held land plots in the economy mapped? No 0.0
    Are all privately held land plots in the largest business city mapped? Yes 2.0
    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
    Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5
    Is there a specific 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
    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 identity documents? No 0.0
    For a standard land dispute between two local businesses over tenure rights of a property worth 50 times gross national income (GNI) per capita and located in the largest business city, what court would be in charge of the case in the first instance? Juzgado Civil del Distrito Federal
    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 any statistics on the number of land disputes in the first instance? No 0.0
    Number of land disputes in the largest business city in 2015:
    Equal access to property rights index (-2–0) 0.0
    Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0
    Do married men and married women have equal ownership rights to property? Yes 0.0