Mexico Releases Framework For Investment Trusts In Energy And Infrastructure - Corporate/Commercial Law - Mondaq Mexico - Mondaq Business Briefing - Books and Journals - VLEX 583472606

Mexico Releases Framework For Investment Trusts In Energy And Infrastructure

Author:Mr Alberto de la Parra, José Estandía, Antonio Franck, Rodrigo Gómez, Luis Rodrigo Salinas and Andrés Lieja
Profession:Jones Day

The Mexican government, through its Tax Administration Service, has released a preliminary framework for fiscally transparent trusts focused on energy and infrastructure investments. The tax treatment of such "Energy and Infrastructure Trusts" is similar to that of FIBRAs (Mexican Real Estate Investment Trusts) and follows the efforts of the Mexican government to attract investment in the Mexican energy and infrastructure industries.

Under the administrative framework, an Energy and Infrastructure Trust must be incorporated under Mexican law, and its purpose must be to invest in Mexican legal entities that are wholly owned by persons or entities resident in Mexico for tax purposes. In addition, its business activities must be exclusively focused on one or more of the following:

Midstream (oil and gas transportation, storage, commercialization, refinement or gas liquefaction, compressing, and regasification) and downstream (processing of petroleum-based products and refinement of petroleum-based products). The Mexican legal entities in which the Energy and Infrastructure Trust invests cannot perform any activities related to the sale of hydrocarbons to the public or to any upstream activities (exploration, drilling, and production). Generation, transmission, or distribution of electricity. Infrastructure projects implemented through concessions, service agreements, or any other contractual scheme, as long as they are entered into by and among the public sector and private entities, are operational and have a remaining contractual life of at least seven years, and engage in any of the following areas: (i) roads, highways, railways, and bridges; (ii) city transportation systems; (iii) ports, industrial docks, and terminals...

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