Reviewed 2 November 2026.
Legal due diligence in Mexico is the review the buyer's Mexican counsel runs on the target's own documents: the corporate books and share registry, title and leases, permits, labor and subcontracting, tax standing, material contracts, intellectual property, the litigation the seller discloses and the approvals the deal itself needs. It tells the buyer whether the target is organized and owned as presented and holds the approvals it operates under.
Counsel works from the data room, which holds what the seller chose to upload. Undisclosed litigation, owners behind nominees, the sellers' reputation, suppliers controlled by insiders, links to organized crime and the union that actually represents the workforce sit in court files, registries and the field. Investigators find those, and their work should start in the same week as counsel's. Our page on due diligence in Mexico describes how we run that stream.
Corporate books and share transfers
Counsel starts with the corporate books. The Código de Comercio (Commerce Code) requires every company to keep a general ledger and minutes books (Article 34) recording the resolutions of the shareholders' or partners' meetings and of the board (Article 36). Minutes of a general meeting must record attendance, the shares represented and the resolutions word for word, while board minutes need only the date, the attendees and the resolutions (Article 41).
Ownership is recorded inside the company. Under the Ley General de Sociedades Mercantiles (General Law of Commercial Companies), a sociedad anónima (S.A., the stock corporation) keeps a share registry of its shareholders, their shares and the transfers (Article 128), and treats as owner whoever appears in it (Article 129). A sociedad de responsabilidad limitada (S. de R.L., the limited liability company) keeps a partners' book, and a transfer of partes sociales (membership interests) has no effect against third parties until it is recorded there (Article 73). Articles 73 and 129 both require a notice of each recorded transfer to be published in the electronic system of the Secretaría de Economía (the Economy Ministry).
Counsel reconciles the registry with the notarized deeds and the published notices. A transfer that appears in a deed but not in the registry, or an entry with no document behind it, means the seller may not be able to deliver what it is selling. Our article on beneficial ownership in Mexico explains what the public record shows about current owners.
Labor: subcontracting, REPSE and the collective contract
The subcontracting reform published on 23 April 2021 rewrote Articles 12 to 15 of the Ley Federal del Trabajo (Federal Labor Law). Subcontracting of personnel, meaning one person providing its own workers for the benefit of another, is prohibited (Article 12). Specialized services or works outside the client's corporate purpose and predominant economic activity are permitted if the contractor is in the public register kept under Article 15 (Article 13). That register, the Padrón Público de Contratistas de Servicios Especializados u Obras Especializadas (REPSE, the register of specialized contractors), is kept by the Secretaría del Trabajo y Previsión Social (STPS, the Labor Ministry), must be public online and requires renewal every three years (Article 15).
A company that contracts with a non-compliant contractor is jointly liable for the obligations owed to the workers used (Article 14). In a share purchase that liability stays with the target. Counsel checks every contractor working at the target's sites against the register and tests whether the service falls inside the target's own corporate purpose. In an asset purchase, Article 41 keeps the employment relationships in place on a substitution of employer and makes the seller jointly liable for prior obligations for six months from notice to the union or the workers.
Under the labor reform published on 1 May 2019, collective contracts already in force had to be legitimized by a vote of the workers. Under an agreement of 1 May 2023 signed by the director general of the Centro Federal de Conciliación y Registro Laboral (CFCRL, the Federal Center for Conciliation and Labor Registration), every such contract that lacked a legitimation certificate at the 1 May 2023 deadline is deemed terminated from 2 May 2023, with its wages and benefits preserved for the workers. Anyone can search the CFCRL's public repository of collective contracts and union files by employer, union, state and address, without an account. Counsel reads the contract on file and asks for the certificate.
Tax, permits, contracts and intellectual property
On tax, counsel reviews returns, audits and disputes. The Servicio de Administración Tributaria (SAT, the tax authority) issues an opinion on whether a taxpayer is meeting its tax obligations under Article 32-D of the Código Fiscal de la Federación (Federal Tax Code), through a procedure set out on its website. Require a compliance opinion issued in the days before closing as a closing deliverable, rather than relying on the copy in the data room.
Works and activities listed in Article 28 of the Ley General del Equilibrio Ecológico y la Protección al Ambiente (General Law of Ecological Balance and Environmental Protection), among them pipelines, the extraction of minerals reserved to the federation, hazardous waste facilities and real estate developments affecting coastal ecosystems, need prior environmental impact authorization from the Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT, the Environment Ministry) in the cases its regulation sets.
States and municipalities hold their own environmental powers (Articles 7 and 8), and municipalities issue the authorizations and permits for urban development works, in line with local land-use plans, under Article 11 of the Ley General de Asentamientos Humanos, Ordenamiento Territorial y Desarrollo Urbano (General Law of Human Settlements, Land Planning and Urban Development).
Environmental liability outlasts the deal. Under the Ley Federal de Responsabilidad Ambiental (Federal Environmental Liability Law), the federal government, acting through the Procuraduría Federal de Protección al Ambiente (PROFEPA, the federal environmental enforcement agency), may sue for environmental damage (Article 28), and the action expires twelve years after the damage and its effects occur (Article 29). Owners or possessors of land with contaminated soil are jointly liable for remediation, and land contaminated with hazardous waste cannot be transferred without SEMARNAT's express authorization (Articles 70 and 71 of the Ley General para la Prevención y Gestión Integral de los Residuos, the General Law for the Prevention and Comprehensive Management of Waste).
Material contracts are read for change-of-control clauses, exclusivity and agreements with related parties. The Instituto Mexicano de la Propiedad Industrial (IMPI, the Mexican Institute of Industrial Property) records renewals, transfers and licenses (Article 5 of the Ley Federal de Protección a la Propiedad Industrial, the Federal Law for the Protection of Industrial Property), so counsel confirms that each registration stands in the target's name.
Competition and foreign investment approvals
Merger control now sits with the Comisión Nacional Antimonopolio (CNA, the National Antimonopoly Commission), which took over the rights, obligations and powers of the former Comisión Federal de Competencia Económica (COFECE) and, according to its activity report for the fourth quarter of 2025, began work on 17 October 2025. The reform published on 16 July 2025 that created it also amended Article 86 of the Ley Federal de Competencia Económica (Federal Economic Competition Law), which sets the merger thresholds in multiples of the daily Unidad de Medida y Actualización (UMA, the indexed unit for legal amounts).
The first is a transaction worth more than 16 million UMA in Mexico. The second is the acquisition of 30 percent or more of the assets or shares of an economic agent whose Mexican sales or assets exceed 16 million UMA. The third is an accumulation of Mexican assets or capital above 7.4 million UMA where two or more participating economic agents have Mexican sales or assets, combined or separately, above 40 million UMA.
At the 2026 daily UMA of MXN 117.31, which the Instituto Nacional de Estadística y Geografía (INEGI, the national statistics institute) announced on 8 January 2026 for use from 1 February 2026, 16 million UMA is about MXN 1,877 million, 7.4 million about MXN 868 million and 40 million about MXN 4,692 million. The CNA has 30 business days to resolve from receipt of the notification or of additional information it requests, extendable by up to 20 in exceptionally complex cases (Articles 90 and 114). Closing above a threshold without prior authorization is fined at up to 8 percent of the economic agent's income (Article 127).
The Ley de Inversión Extranjera (Foreign Investment Law) reserves some activities to the State or to Mexicans (Articles 5 and 6) and caps foreign investment in others, at 49 percent in activities such as explosives and firearms, newspapers circulated only in Mexico, fishing and domestic air transport (Article 7).
Foreign investment above 49 percent needs a favorable resolution of the Comisión Nacional de Inversiones Extranjeras (CNIE, the National Foreign Investment Commission) in the activities listed in Article 8, and in any company whose total assets exceed the amount the Commission sets each year (Article 9). A resolution published in the Diario Oficial de la Federación (DOF, the federal official gazette) on 5 August 2025 set that amount at MXN 28,623,925,390.72 until a new one is issued, so check for a later resolution.
After closing, the company must be registered in the Registro Nacional de Inversiones Extranjeras (National Foreign Investment Registry) within 40 business days of the foreign investment's participation (Article 32). Land in the restricted zone, 100 kilometers along the borders and 50 along the coasts (Article 2), is held under separate rules for non-residential and residential use, the second through a bank trust for which the Secretaría de Relaciones Exteriores (the Foreign Ministry) must issue a permit (Articles 10 and 11). Our article on property title checks in Mexico covers title, the restricted zone and the trust.
Anti-corruption and money laundering exposure
Under the Ley General de Responsabilidades Administrativas (General Law of Administrative Responsibilities), a company is sanctioned when people acting in its name commit acts linked to serious administrative offenses while seeking a benefit for it (Article 24). The authority weighs whether the company has an integrity policy meeting the seven minimum elements of Article 25, which require among other things a code of conduct with mechanisms of real application and controls that test compliance periodically. Counsel asks for the policy and for evidence that it operates.
For buyers within reach of US law, the Justice Department's Evaluation of Corporate Compliance Programs, updated in September 2024, expects a well-designed compliance program to include comprehensive due diligence of acquisition targets, and asks whether misconduct or its risk was identified during it.
The anti-money laundering law reaches the closing itself. Under the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (the federal anti-money laundering law), last amended on 16 July 2025, a notary who formalizes a purchase of shares or partes sociales performs a vulnerable activity that is always reported (Article 17).
The notary must identify a corporate client's beneficial controller (Article 18) and must refrain from the act if the client refuses to provide the information (Article 21). Prepare the documents on the buyer's own beneficial controller before the notary appointment. If the target carries on a vulnerable activity, its client files, which must be kept for at least ten years (Article 18), are part of the review.
What the 2025 data protection law allows in a data room
The Ley Federal de Protección de Datos Personales en Posesión de los Particulares (Federal Law on the Protection of Personal Data Held by Private Parties), published on 20 March 2025, makes processing subject to consent (Article 7) with the exceptions in Article 9, and requires express written consent for sensitive data (Article 8). Communicating personal data to anyone other than the data subject, the controller or its processor is a transfer (Article 2). Article 36 lists seven transfers that need no consent, among them transfers within a group under common control. None of them refers to the sale of a business.
Employee files in a data room should therefore be dissociated so that no individual can be identified, a case in which Article 9 dispenses with consent. Identified data on key people can follow with their consent, or after closing, when the common control exception may apply. Background checks on the sellers and managers are processing of personal data too, and our article on background checks in Mexico covers consent and its limits.
What the data room cannot show
The seller assembles the data room, and our article on why a foreign due diligence checklist fails in Mexico covers the records Mexico does not keep. These are the gaps that counsel's review leaves open.
Undisclosed litigation
The litigation schedule lists the cases the seller chose to list. Suits in other states, labor claims and criminal proceedings involving the target, the sellers or the directors are found by searching the courts where they could have been filed, as our article on litigation searches in Mexico explains.
Owners behind nominees
A registry entry shows the holder of record. Where that holder is a prestanombres (a nominee who lends a name), the person in control, who may be the real counterparty, appears in no document in the data room. Investigators test each holder's means, history and links to the people who run the business.
The sellers' reputation
How the sellers have treated partners, lenders, employees and officials is established through inquiries with people who have dealt with them, press and court archives and records in the states where they have done business.
Related-party suppliers
Suppliers owned by a seller, a director or their relatives can move margin out of the target before and after closing. Investigators compare the supplier and customer lists with the shareholders, directors, attorneys-in-fact and their families, and run the checks in our guide on how to verify a Mexican company on each material supplier.
Cartel exposure
Extortion payments and imposed suppliers do not appear as such in financial statements. Our article on cartel-related risk in due diligence covers the terrorism designations. The Justice Department's Foreign Corrupt Practices Act guidelines of 9 June 2025 make association with the criminal operations of a cartel or transnational criminal organization a primary consideration in deciding whether to pursue a case.
The union on the ground
The contract on file names a union. Whether the workers recognize it, and whether another organization is recruiting or a dispute is open, is established at the site and through local sources.
Running both streams in parallel
The two streams work from one list of the sellers, directors, attorneys-in-fact, shareholders of record, material suppliers, properties and operating addresses, and both start in the first week. Counsel's reconciled registry and deeds give investigators the names and addresses to test. The investigators' litigation and registry searches tell counsel which representations, disclosure schedules and indemnities need rewriting before the draft agreement goes back to the seller.
Site visits answer what counsel cannot close on paper, such as whether operations match the permits, whether the people on site are the target's employees or a contractor's, and which union is present. Findings from both streams go into one issues list, each with its source and a note of whether it is established or inferred, so that counsel can decide whether it supports a condition precedent, a price adjustment, a specific indemnity or a right to walk away.
Red flags that should pause a deal
Some findings justify stopping the timetable until they are resolved. On ownership, they include a registry that does not match the deeds or the published notices and a holder of record with no visible means. On labor, they include a contractor that supplies staff without REPSE registration or performs the target's core activity, and a union on site that is not the one on file.
On approvals, they include foreign ownership above an Article 7 cap, or above 49 percent without a CNIE resolution that Article 8 or 9 requires, and a deal above the Article 86 thresholds whose timetable leaves no room for the CNA's review. On assets, they include contaminated land and works built without the environmental impact authorization they required. On people, they include undisclosed suits or criminal proceedings, sellers or suppliers linked to cartel operations, and a counterparty that will not identify its beneficial controller.
Checks after closing
Record the transfer in the share registry or partners' book and publish the notice in the Economy Ministry's system (Articles 73 and 129 of the Ley General de Sociedades Mercantiles). The anti-money laundering law adds its own notice of the registration in that ministry's electronic system (Article 33 Bis). Register the foreign investment within 40 business days. In an asset deal, the labor indemnity in the purchase agreement should run longer than the seller's six months of joint liability under Article 41 of the Ley Federal del Trabajo.
Diary the contractors' three-year REPSE renewals and check the CFCRL repository after each revision of the collective contract. Re-run litigation searches on the target and the sellers during the indemnity period, because claims filed after closing are in no data room, and an environmental liability action can be brought for twelve years after the damage and its effects occur.
Where we come in
From our office in the World Trade Center in Mexico City, Warden Consulting runs the investigative stream of an acquisition alongside the buyer's Mexican and foreign counsel. Our investigating lawyers read the corporate books, deeds and filings that counsel collects, test them against court records and registries, and direct investigators who work in the states where those records sit and where the target operates. We report each finding with its source and with a clear line between what is established and what is inferred, in a form counsel can use in the disclosure schedules and the purchase agreement.
Our page on due diligence in Mexico describes the service. To discuss a transaction, contact our Mexico City office.
Frequently asked questions
What does legal due diligence in Mexico cover?
It covers the corporate books and share registry, real estate, permits, labor and subcontracting, tax standing, contracts, intellectual property, disclosed litigation and the approvals the deal needs. It reviews documents the seller supplies, so on its own it does not find what the seller left out.
Does an acquisition in Mexico need antitrust approval?
It does when the deal exceeds a threshold in Article 86 of the Ley Federal de Competencia Económica. At the 2026 UMA value the first two tests turn on about MXN 1,877 million, and the third on an accumulation above about MXN 868 million where the parties' Mexican sales or assets exceed about MXN 4,692 million. The Comisión Nacional Antimonopolio has 30 business days to resolve, and closing without its prior authorization can be fined at up to 8 percent of income.
Do foreign buyers need approval to buy a Mexican company?
A favorable resolution of the Comisión Nacional de Inversiones Extranjeras is required when foreign investment will exceed 49 percent in an activity listed in Article 8 of the Ley de Inversión Extranjera, or in a company whose total assets exceed the annual amount, set at MXN 28,623,925,390.72 by the resolution published on 5 August 2025. After closing, the company must be registered in the National Foreign Investment Registry within 40 business days.
Can employee personal data be put in a data room in Mexico?
Disclosing identified employee data to a prospective buyer is a transfer under the 2025 data protection law, and none of the seven cases in Article 36 that dispense with consent refers to the sale of a business. Dissociated data, from which no individual can be identified, can be processed without consent under Article 9. Sensitive data need express written consent under Article 8.
What is REPSE and why does it matter when buying a Mexican company?
REPSE is the Labor Ministry's public register of contractors allowed to provide specialized services or works. Since the 2021 reform, subcontracting of personnel is prohibited, and specialized services may be contracted only from a registered contractor and only outside the client's corporate purpose and predominant activity. A company that uses a non-compliant contractor is jointly liable for that contractor's obligations to the workers, and in a share purchase the target keeps that liability.
This article is general information, not legal advice.