OFFICIAL GUIDE TO SHIP & YACHT REGISTRIES

Mexico

Shipowner Eligibility 

Article 2 of the NL defines a “shipowner” as the individual or entity that owns or possesses one or more vessels performing any of the following activities: equip, supply stores, provisions and crew, maintain afloat, operate and exploit vessels.

Pursuant to Article 7 of the Mexican Foreign Investment Law (Ley de Inversión Extranjera), the participation of foreign investment in the capital stock of Mexican shipping companies that are engaged in the business of operating vessels in interior and cabotage navigation is limited to 49% of such capital stock, except in the following cases:
• Mexican shipping companies that operate vessels for touristic purposes, and for the construction, maintenance and operation of port installations, and
• Mexican shipping companies that render marine services for the interior navigation of other vessels, such as tugging and mooring.

Such 49% investment limit can be exceeded with the authorization of the Ministry of Economy through the issuance of neutral or restrictive shares.

About the Flag

Mexico is one of the world’s largest countries with a surface of 1,964,375 square kilometers of land and 3,149,920 square kilometers of sea. Mexico is a federal republic divided into thirty-one (31) states and a federal district (seat of the federal powers). The executive power is the president who is elected for a period of six years without reelection. The legislative power is divided into two parliamentary chambers (representatives and senate). The judicial power is headed by the Supreme Court of Justice.

The legal system of Mexico follows the pattern of codified law based on the Napoleonic Civil Code. The laws are generally contained in codes, both at federal and state level. Most of the provisions which are relevant to a foreign investor, such as commerce, corporations, foreign investment, labor, intellectual property, tax and maritime matters are regulated by federal statutes.

Mexico is the world’s fourteenth (14th) largest economy. The Mexican economy reached an average growth rate of four percent (4%) of the Gross Domestic Product in 2011 and inflation was around three point eighty two percent (3.82%). For the year 2012 the Gross Domestic Product grew four percent (4%) for the first quarter of the year and inflation reached three point zero-seven percent (3.07%). This information was published by the Ministry of Finance and Public Credit on the first days of May.

On June 1, 2006, the new Mexican Navigation and Maritime Commerce Law (Ley de Navegación y Comercio Marítimos) (“NL”) was enacted with the purpose of strengthening maritime commerce in Mexico and enhancing business opportunities for Mexican shipping companies.

Company Formation

Mexican companies are regulated by the General Law of Mercantile Companies (Ley General de Sociedades Mercantiles). The most frequent type of company is the “sociedad anónima”, a capital stock corporation in which the shareholders are liable only for the payment of their respective capital contributions. Such capital contributions are represented by shares which are freely transferable. The “sociedad anónima” or “S.A.” offers considerable flexibility for management purposes.

These types of companies must be incorporated by at least two shareholders, each of which must subscribe at least one share. There are no minimum capital requirements.

A permit from the Ministry of Foreign Affairs authorizing a corporate name and a set of bylaws complying with Mexican law are necessary to incorporate a Mexican company in the form of a S.A.

The incorporation of the company will be made with a notary public, who will issue the corresponding incorporation deed, which then has to be recorded in the Public Registry of Commerce and the National Maritime Public Registry (“RPMN”).

Taxation

Under the Mexican Income Tax Law (Ley del Impuesto Sobre la Renta) companies shall be deemed as Mexican residents when incorporated and registered as such in Mexico or if foreign entities have established a permanent place of business in Mexico. The aforementioned law defines a “permanent place of business” as any place where business, entrepreneurship activities or rendering of services are conducted.

In order to conduct business in Mexico, all Mexican companies must be registered before the Federal Taxpayer Registry (Registro Federal de Contribuyentes).

Company taxes are calculated on yearly basis and are self determined. The fiscal year for all companies must end on December 31 of each year, except in the case of the company’s liquidation or closure.

Mexican companies must file an annual income tax return, no later than three months after the end of the fiscal year and a provisional income tax return on a monthly basis.

A. Corporate Income Tax (ISR).
Companies are generally subject to a corporate income tax at a rate of 30% rate. In case of dividends paid to foreign shareholders, there is no withholding tax. No further taxes are applied if the dividends are distributed out of earnings on which the regular corporate tax has been paid (“after tax earnings” or “cuenta de utilidad fiscal neta CUFIN”). Other forms of payment abroad, such as royalties and interest, are also subject to withholdings.

For purposes of the calculation of income tax, net income is determined by subtracting from gross income, the specified costs, business expenses and net losses, which can be carried forward up to a maximum of 10 years.

Deductible expenses include, among others, losses, expenses, depreciation, interest, insurance premiums, rental payments, repairs, research, royalties, salaries and payroll contributions.

B. Value Added Tax (IVA).
Mexican Law provides a 16% rate value added tax to all transactions other than transactions such as the purchase of food, medicines and books. A special 10% VAT rate has been enacted in certain border regions. VAT is a recoverable tax for businesses. A company may offset VAT paid against VAT recovered and either forward the difference to the tax authorities if positive, or request a refund if negative.

C. Mandatory Profit Sharing (PTU).
Mexican resident corporations are required to pay 10% of their taxable net income to its employees on a yearly basis.

D. Taxes and Contributions Applicable to Payroll.
Social security contributions (IMSS) are paid at a rate of approximately 21%; contributions to housing fund (INFONAVIT) at a rate of 5%, and contributions to the employee retirement fund (SAR) at a rate of 2%. Additionally, payroll tax is paid locally at a variable rate not exceeding 2%.

E. Sole Rate Corporation Tax (IETU).
Enacted in 2008, the Sole Rate Corporation Tax (impuesto empresarial a tasa única) supplements income tax. This tax can be credited against income tax and is calculated at a rate of 17.5% on all income from the sale or allowance of temporal use of assets and the rendering of services, minus all applicable deductions. IETU is payable when it exceeds the income tax for the year. Please notice that deductions hereto differ from those of the income tax.

Mexico has entered double taxation treaties with Argentina, Australia, Austria, Bahrain, Barbados, Belgium, Brazil, Canada, Chile, China, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Greece, Hungary, India, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Korea, Lithuania, Luxembourg, Netherlands, New Zealand, Norway, Panama, Poland, Portugal, Romania, Russia, Singapore, Slovak Republic, South Africa, Spain, Sweden, Switzerland, UK, Uruguay and USA.

Tax treaties signed but pending ratification: Colombia, Kuwait, Latvia, Peru and Venezuela.

Treaties under negotiation: Lebanon, Malaysia, Morocco, Nicaragua, Pakistan, Slovenia, Thailand, Turkey, Ukraine.

Registration and Documentation

Article 38 of the NL defines “cabotage navigation” as the navigation between two Mexican ports or between two points located within Mexican marine zones or coast lines.

Pursuant to article 40 of the NL, the operation and exploitation of vessels for cabotage navigation is reserved to Mexican shipping companies or Mexican individuals with Mexican flagged vessels, subject to the following exceptions:

The operation and exploitation of vessels in cabotage navigation for the rendering of touristic services and the performance of sports and recreational activities, as well as for the construction and maintenance of port installations and dredging, may be performed by foreign shipping companies with Mexican or foreign flagged vessels; provided that there is reciprocity with the relevant foreign country and priority shall be given to Mexican shipping companies; and
In case that there are no Mexican flagged vessels with the required technical specifications or due to public interest reasons, the Mexican Ministry of Communications and Transport (Secretaría de Comunicaciones y Transportes) (the “SCT”) has the authority to grant temporary cabotage navigation permits (“Navigation Permits”) in favor of, and subject to the following priority:
(i) Mexican shipping company in possession of a foreign flagged vessel under a bareboat charter party;
(ii) Mexican shipping company in possession of a foreign flagged vessel under any other type of charter party, and
(iii) Foreign shipping company in possession of a foreign flagged vessel.

Navigation Permits are effective for a term of three (3) months and may be renewed for additional three (3) month periods; provided that no Navigation Permit for a relevant vessel may be renewed for more than seven (7) times, except if the relevant vessel is qualified by the SCT as a vessel with extraordinary specialized technical characteristics, in which case such permits may be extended at the discretion of the SCT.

Any Mexican shipping company holder of a Navigation Permit with respect to a foreign flagged vessel that will be operated in Mexican waters for more than 2 years (except in case of extended permits as referred above), is obliged to reflag such vessel with Mexican flag no later than the expiration of such term as from the date of issuance of the first Navigation Permit. If said vessel is not reflagged within the aforementioned term, the SCT shall be impeded to grant any renewals or additional Navigation Permits for said vessel or any other vessel that the respective Mexican shipping company may intend to charter to replace it.

In accordance with Article 11 of the NL, only Mexican individuals or entities may register and flag vessels with Mexican flag, provided that the relevant Mexican individual or entity owns the respective vessel or is under his/her/its possession by means of a financial lease agreement. Vessels cannot be registered and flagged in Mexico under a bareboat charter agreement.

Bareboat Charter Registration

Article 10 of the NL, establishes that Mexican vessels are considered to be those flagged and registered in any Port Authority (Capitanía de Puerto) at the request of their owner or shipping company, prior verification of the corresponding safety conditions and submission of the deletion of flag of the State of origin. The vessel will be recorded in the RPMN and will be issued a registration certificate (certificado de matrícula), which shall remain onboard at all times to evidence the Mexican nationality.

Under Article 9 of the Regulations of the NL, the registration requests have to be submitted with the following information and documents:
• Name and address of the requesting party;
• Original or certified copy (by notary public or commercial broker) of the following documents:
• Public deed of incorporation of the company, and any amendment to the bylaws;
• Public deed containing the power of attorney of the requesting party, in case such party is not acting directly;
• Agreement, invoice or bill of sale evidencing ownership of the vessel, or financial lease agreement granted with a notary public or commercial broker evidencing possession of the vessel;
• Document evidencing the deletion of flag and the cancellation of the registration of the vessel in the State of origin; and
• Certificates pertaining to navigation worthiness and safety.
• Representation under oath that the requesting party is a Mexican national;
• Name and specifications of the vessel; and
• Payment of duties.

All documents must be filed in Spanish; therefore any document that is in a foreign language must be translated into Spanish by an authorized translator. All documents issued by foreign authorities must be duly legalized by the Mexican Consulate in the country of issuance or apostilled under the provisions of the Hague Convention.

During the registration process, the Port Authority or the Mexican Consulate if the vessel is located in a foreign jurisdiction may issue a temporary navigation permit (pasavante de navegación) during the flagging and registration process. The pasavante may be considered as a provisional Mexican flag.

Vessel and Yacht Eligibility & Survey Requirements

On June 12, 2008, the SCT published a resolution establishing the age that vessels must have when obtaining the registration and Mexican flag.

Article First of this resolution establishes that vessels equal or exceeding 500 units of gross tonnage may not exceed 20 years of age of construction when filing the request of registration, except for special authorization of the Maritime Commerce Agency (Dirección General de Marina Mercante) upon inspection of the vessel.

Article Third establishes that such vessels must also be classified by a classification society member of the International Association Classification Societies (I.A.C.S.)

Crewing

Article 25 of the NL establishes that all crew on board a Mexican vessel must be Mexican nationals by birth and cannot obtain a different nationality. All officers and seafarers must hold a license issued by the Ministry of Transport and Communications. Mexico is a party to the Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended.

Mortgages

The maritime mortgage in Mexico is regulated in the NL. Under Mexican law, a maritime mortgage is a lien created over a vessel (including vessels under construction) in order to secure compliance and preference in the payment of any obligations (i.e. repayment of a loan).
A maritime mortgage may be created by either the execution of an agreement between the grantor of the maritime mortgage (owner of the vessel) (the “Mortgagor”) and the beneficiary of the maritime mortgage (creditor) (the “Mortgagee”), or unilaterally by the Mortgagor. In both cases, the maritime mortgage must be formalized in a public deed granted before a notary public or commercial broker.
In order for a maritime mortgage to be effective vis a vis third parties, it must be recorded with the RPMN; in the understanding that a maritime mortgage may only be recorded with the RPMN if the vessel subject matter of the maritime mortgage is flagged with Mexican flag and registered with the RPMN or navigating in Mexican waters under a pasavante.
Unless the Mortgagor and Mortgagee provide otherwise, the maritime mortgage will create a lien in favor of the Mortgagee over (i) the vessel, (ii) its accessories, belongings and other assets or goods incorporated to the vessel and (iii) the vessel’s improvements. The Mortgagor and Mortgagee may additionally agree that the maritime mortgage creates a lien in favor of the Mortgagee over the rents or freights due to the Mortgagor.
A creditor which credit is secured with a maritime mortgage recorded with the RPMN, has preference in the payment of its credit over any other creditor, including creditors secured with maritime mortgages in second and subsequent places. The ranking priority of Maritime Mortgages is determined by the order in which they are recorded with the RPMN.
Maritime Privileges. Pursuant to article 102 and 91 of the NL, the following credits or creditors have preference over credits secured with a Maritime Mortgage:

a) Wages and other debts owed to the vessel’s crew, in virtue of their hiring for the operation of the vessel, including repatriation costs and social security quotas;
b) Indemnities derived from death or injuries resulting from the exploitation of the vessel;
c) Rewards for salvage of the vessel;
d) Credits for the usage of port premises, maritime signage, navigation lanes and navigation;
e) Indemnities derived from damages caused by pollution resulting from the spill of hydrocarbons; radioactive substances; toxic, explosive or other hazardous materials of nuclear fuel or radioactive products or waste, and
f) Indemnities derived from civil liability resulting from loss or material damage caused by the operation of the vessel, different to loss, or damage caused by carriage, containers and personal properties of the passengers on board the vessel.

Maritime privileges derived from the last voyage shall be preferred to those derived from past voyages.
Applicable Law and Jurisdiction. A maritime mortgage created over a vessel flagged with Mexican flag or under a pasavante must be governed by Mexican law and subject to the jurisdiction of federal competent courts of Mexico, in terms of Section III of Article 13 of the Federal Civil Code (Código Civil Federal) and article 264 and 275 of the NL, respectively.

Fees

Fees are established and must be paid in Mexican pesos.

The following information is provided in US dollars, using an exchange rate of $13.1659 pesos per US dollar.
Flag & Deletion of Flag
Vessels 50 GRT or less .............................................. US $ 40.37
Vessels 51 - 500 GRT ........................................................... 80.77
Vessels 501 - 5,000 GRT .....................................................141.38
Vessels 5,001 - 15,000 GRT ...............................................202.00
Vessels 15,001 - 25,000 GRT ............................................ 505.04
Vessels 25,001 - 50,000 GRT ............................................ 707.05
Vessels over 50,000 GRT ....................................................808.07
Annual Fees
There are no annual fees or tonnage taxes.
Other Shipping Related Fees
Certificate of Registration (matrícula)
Vessels 20 - 100 GRT ...................................................... 82.09
Vessels 100.01 - 500 GRT 97.67
Vessels 500.01 - 5,000 GRT 113.11
Vessels 5,000.01 - 15,000 GRT 134.59
Vessels 15,000.01 - 25,000 GRT 374.08
Vessels 25,000.01 - 50,000 GRT 523.68
Vessels over 50,000.01 GRT ........................................ 598.56
Mortgages
There are no fees or duties regarding Maritime Mortgages.
Registration of Shipping Companies
or Individuals as Shipowners
There are no fees or duties regarding the registration of shipowners in the RPMN.

Contact

Ship inspection and casualty investigation services
Secretaría de Marina
Contralmirante CG. DEM. Gerardo de Jesús Toledo Guzmán
Director General Adjunto de Ordenamientos, Enlace, Accidentes e Incidentes Marítimos
Heroica Escuela Naval Militar Número 669
Colonia Presidentes Ejidales, Segunda Sección, Delegación Coyoacán
Ciudad de México
04470
Mexico

Phone
52 55 56246500 ext 1795

Email
unicapam.digaor@semar.gob.mx

Web
http://www.gob.mx/semar/digecapam

Stockholm Agreement 96
IMO Convention 48
* IMO amendments 91 
* IMO amendments 93
SOLAS Convention 74
SOLAS Protocol 78
SOLAS Protocol 88
LOAD LINES Convention 66
LOAD LINES Protocol 88
TONNAGE Convention 69
COLREG  Convention 72
CSC Convention 72
CSC amendments 93
SFV Protocol 93
STCW  Convention 78
STCW-F Convention 95
SAR  Convention 79
STP Agreement 71
STP Protocol 73
IMSO Convention 76
INMARSAT OA 76
INMARSAT amendments 94
INMARSAT amendments 98
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65
MARPOL 73/78 (Annex I/II)
MARPOL 73/78 (Annex IV)
MARPOL 73/78 (Annex V)
MARPOL Protocol 97 (Annex VI)
London Convention 72
London Convention Protocol 96
INTERVENTION Convention 69
INTERVENTION Protocol 73
CLC Convention 69
CLC Protocol 76
CLC Protocol 92
FUND Convention 71
FUND Protocol 92
FUND Protocol 2003
NUCLEAR Convention 71
MARPOL 73/78 (Annex III)
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89
OPRC  Convention 90
HNS Convention 96
OPRC/HNS 2000
BUNKERS CONVENTION 01
ANTI FOULING 01
BALLASTWATER 2004
NAIROBI WRC 2007
HONG KONG CONVENTION
HNS PROT 2010
Cape Town Agreement 2012
SUA Convention 88
SUA Protocol 88

IMO Conventions

Status of Conventions Mexico

IMO Convention 48 x
SOLAS Convention 74 x
SOLAS Protocol 78 x
SOLAS Protocol 88 x
SOLAS Agreement 96
LOAD LINES Convention 66 x
LOAD LINES Protocol 88 x
TONNAGE Convention 69 x
COLREG Convention 72 x
CSC Convention 72 x
CSC amendments 93
SFV Protocol 93
Cape Town Agreement 2012
STCW Convention 78 x
STCW-F Convention 95
SAR Convention 79 x
STP Agreement 71
Space STP Protocol 73
IMSO Convention 76 x
INMARSAT OA 76 x
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65 x
MARPOL 73/78 (Annex I/II) x
MARPOL 73/78 (Annex III)
MARPOL 73/78 (Annex IV)
MARPOL 73/78 (Annex V) x
MARPOL Protocol 97 (Annex VI)
London Convention 72 x
London Convention Protocol 96 x
INTERVENTION Convention 69 x
INTERVENTION Protocol 73 x
CLC Convention 69 d
CLC Protocol 76 x
CLC Protocol 92 x
FUND Protocol 76 x
FUND Protocol 92 x
FUND Protocol 2003
NUCLEAR Convention 71
PAL Convention 74
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76 x
LLMC Protocol 96
SUA Convention 88 x
SUA Protocol 88 x
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89 x
OPRC Convention 90 x
HNS Convention 96
HNS PROT 2010
OPRC/HNS 2000
BUNKERS CONVENTION 01
ANTI FOULING 2001 x
BALLASTWATER 2004 x
NAIROBI WRC 2007
HONG KONG CONVENTION

x= ratification
d=denunciation

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