On December 7, 2023, the U.S. and Mexican governments signed a Memorandum of Intent (“MOI”) agreeing to cooperate and bolster foreign investment screening.  Both countries have expressed a commitment to establish a bilateral working group for the exchange of information and best practices on foreign investment, with the goal of helping Mexico develop a CFIUS-like screening regime and strengthening the collective security of the United States and Mexico.    

The current Mexican FDI regime, primarily consisting of La Ley de Inversion Extranjera and its regulations, employs an ex ante regime that requires the review and approval for both direct and indirect investments by foreign investors acquiring a majority shareholding in Mexican companies that carry out “strategic activities” or hold assets worth approximately USD $1.1 billion dollars.  Although certain sectors are also subject to participation caps or are reserved for the Mexican state (i.e., electricity transmission, nuclear power and treatment of radioactive minerals, postal services) or Mexican nationals (i.e., freight and passenger transportation within Mexico and development banks), the Mexican government has declared a policy of protecting and encouraging foreign investment since the 1990s.

The signing of the MOI is part of a global trend of continued strengthening and expansion of foreign direct investment regimes, often in coordination with the United States.  Although Latin American countries have generally and historically employed more limited FDI regimes than certain other western economies, the MOI signals the continuing expansion worldwide of inbound foreign investment regimes aimed at protecting national security