If enacted, the bill would establish a variety of benefits for investors in the special economic zones. Multinationals interested in investing in Mexico should continue to monitor the progress of this bill.

On December 14, 2015, the lower chamber of Mexico's Congress approved a bill that would establish special economic zones (SEZs) to promote investment, productivity, competitiveness, employment and a better distribution of wealth in regions of Mexico with higher levels of social underdevelopment. Mexico's President proposed the bill on September 29, 2015.

The President has announced that, with the final promulgation of the bill, the first SEZs would be:

— Interoceanic Industrial Corridor in the Tehuantepec Isthmus, which will connect the Pacific Ocean with the Gulf of Mexico

— Michoacan and Guerrero municipalities, adjacent with the Lazaro Cardenas Port

— Port of Chiapas or Madero

Some of the specific objectives of the bill include: (i) increasing regional competitiveness; (ii) generating agglomeration economies; (iii) attracting foreign and domestic investment; (iv) creating direct and indirect employment; (v) boosting the development of infrastructure; (vi) accelerating the growth of exports and diversification of production; and (vii) triggering a branding effect on the localities where the SEZs will operate.

The bill would establish the SEZs as areas of Mexico that would be subject to a special regime, in which authorized investors who settle in those areas may perform various activities, including manufacturing, processing and storage, support services and other services deemed necessary according to the objectives of the bill, as well as imports. Persons operating in those areas would receive tax, customs and financial benefits, administrative privileges and competitive infrastructure, among other special treatments.

For such purposes, the bill would establish certain key drivers for the construction, development, management and maintenance of the respective zones, namely:

— Integral Manager: a corporate or governmental entity that will be selected and will be responsible for the construction, development, management and maintenance of the SEZ

— Investor: an individual or a corporate entity, national or foreign, authorized to carry out the productive economic activities in the SEZ

The bill would provide temporary tax benefits that would gradually decrease. The benefits would be granted for a minimum of eight years, during which they would not be modified, except for their gradually decreasing nature.

The respective decree granting the SEZ would define the applicable tax payment forms and procedures.

The bill also would require the Executive Branch to create a customs regime for the SEZs, which would regulate the introduction and extraction of foreign merchandise, as well as the operation of the activities within the SEZ.

With its approval by the lower chamber of Congress, the bill has been submitted to the Mexican Senate for its final Congressional ratification.

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