Driven by a desire to stimulate employment and the internal market, as well as to scale the World Bank’s “Ease of Doing Business” rankings, the Mexican government approved a package of reforms in December 2011 aimed at facilitating the creation of new businesses. The modifications, which affect laws such as the Foreign Investment Law, the General Law of Mercantile Societies, the Public Administration Law and others, are intended to reduce the time, cost and aggravation of registering a new company. Some of the changes entered into effect as of January 1, 2012, and others will become operational as of June of this year.
Taken as a package, the reforms seek to concentrate the required procedures for forming a business within the Economy Ministry (SE), instead of having them distributed throughout various government agencies, each with their own offices, forms, procedures and fees. The official reform decree also calls upon the SE to coordinate the harmonization of procedures across agencies and incorporate the overall process into a unified digital registration system, via the web portal www.tuempresa.gob.mx. Examples of the regulatory modifications include:
• Reduction of obligatory response time for new business approval applications
• Elimination of fixed amount of initial share capital
• Elimination of various fees from new business application process
• Removal of requirement to establish a fixed duration for registered companies
The reforms are more incremental than revolutionary, but very welcome just the same. Having hacked our way through a dense forest of procedures and fees to register our own companies in years past, we commend the current administration’s efforts to simplify the process for entrepreneurs. To a similar end, the Federal Regulatory Improvement Commission (Cofemer) will be undertaking throughout the year a comprehensive examination of federal regulations and procedures to evaluate their cost-benefit efficiency. The program, conducted with support from the Organization for Economic Cooperation and Development (OECD), seeks to implement best practices and harmonize systems at all levels of government with the lofty goal of reducing the overall cost of regulation to the economy by 25%. Fun dayn moyl in gots oyern, we say!
With mere months remaining in his administration, we imagine President Felipe Calderon would be well chuffed to achieve an uptick in Mexico’s Ease of Doing Business ranking. Even though we’re still *cough* 73 positions ahead of Brazil, there’s still plenty of room for improvement.
The decree detailing the new-business reforms can be found here.