By Duncan Tucker
Streamlined regulation and an on-line portal to register new companies are among a series of reforms the Mexican government has passed to facilitate the creation of start-ups.
Their aim is to eliminate unnecessary red tape and reduce the time and cost required to register new businesses, as well as weaken monopolies that threaten to suffocate the markets, to stimulate employment and increase efficiency and investments in the Mexican economy.
While some of the reforms to the laws – which include the Foreign Investment Law, the General Law of Mercantile Societies and the Public Administration Law, among others – came into effect on January 1, the remainder will do so in June of this year. The government says the reforms will reduce the time it takes to register a new firm from 56 days in 2006 to just nine days.
The various reforms reduce the response time for new business applications, eliminate various fees for the application process and reduce business transaction costs. Additional regulatory reform eliminates unnecessary bureaucracy within the Federal Public Administration by eliminating 16,000 internal regulations and replacing over 7,000 rules with nine handbooks.
To register a new business in the past it was necessary to apply to various government agencies, each with their own paperwork, procedures and fees. Under the reforms, the registration process is now dealt with solely by the Ministry of Economy (SE).
The SE has created a new website ( www.tuempresa.gob.mx ) which condenses the application process to a single online registration system. The government describes it as “a portal created to facilitate the establishment and operation of companies in Mexico, through the use of electronic media and the streamlining of federal procedures.”
Entrepreneurs will also find encouragement in reforms made to the Federal Law on Economic Competition to combat the monopolies that stifle competitiveness in the Mexican marketplace. The changes criminalize absolute monopolistic practices and give the Federal Commission of Competition (COFECO) greater power against monopolies and oligopolies by increasing economic sanctions.
The reforms come as President Felipe Calderon enters the final months of his administration, hoping to leave a positive legacy and boost his party’s chances in the July elections by overseeing improvement in the economy. The government also hopes to improve Mexico’s ranking in the World Bank’s “Ease of Doing Business” table. It is currently sandwiched between St. Lucia and Botswana in position 53.
By increasing competitiveness and reducing bureaucracy, the government hopes these legislative changes will greater incentive for private investment and result in better opportunities for start-ups in Mexico.