Top Ten Permits in Administrative Matters for Construction and Operation of Business (Mexico)

By Cuesta Campos y Asociados

Is your company planning to establish a subsidiary or branch in Mexico? You may need to obtain certain permits, licenses and authorizations from the federal, state, and municipal governments. Although licensing and permit requirements as well as government fees for small, medium and large businesses can vary among jurisdictions, it is critical that you are aware of the licenses and permits you may need to acquire prior to opening a business or carrying out any commercial or industrial activities in Mexico.

Below are the top ten permits, licenses and authorizations in administrative matters that every owner or organization is obliged to obtain in order to evidence the proper construction and operation of the business. Remember you should always contact your state and local government, in order to determine the specific obligations or additional permits that may be required.

The urban impact approval is an official document issued by the Department of Urban Development of the corresponding state or municipality, which evaluates the environmental consequences of the business, as well as the impact of insertion of future construction projects of medium and large scale, by the analysis of its preliminary stages, construction, operation and maintenance.

This approval is intended to ensure, prevent and/or minimize the impact to the infrastructure conditions (i.e. roads), as well as the hydraulic, health, social and economic structure, including the existing urban image in the state or municipality.

The land use permit is an official document issued by the Department of Urban Development of the corresponding state or municipality, which states whether the land use of a certain construction, including its commercial purpose, is compatible with the provisions set forth in the Urban Development Program(s) of the corresponding state or municipality, on the uses, reserves and the destinations of the areas of land.

It also states the permitted, prohibited or conditioned uses, as well as restrictions for real estate properties, based on the provisions set forth in the Urban Development Program(s) of the corresponding state and/or municipality, as well as in the laws, regulations, standards and other applicable regulations.

The certificate of alignment and official number, is an official authorization issued by the Department of Urban Development of the corresponding state or municipality, which certifies the official number of the property and its measures with respect the axis of the street or boundaries that the property has in connection with the public streets.

It is the tracing on the ground that limits a respective portion of land with respect to public roads in use or future public roads, including restrictions or encumbrances of urban nature, according to the applicable urban development laws and regulations.

The certificate of alignment and official number does not grant the applicant(s) any property rights and, in general, it is issued based on the information and statements provided by the applicant under oath and under its responsibility.

This permit is an official document issued by the Department of Urban Development of the corresponding state or municipality, which authorizes the owners to build, extend or alter a building.

It is important to note that it is only necessary to obtain a new permit if there is a new construction to be made, in which case, the authorities may request the previous construction permits (generally granted to the owner or landlord), to verify if the previous construction works were carried out in accordance with the blueprints, conditions and specifications that were authorized by the authorities, after paying the applicable government fees.

The Notice of Completion of Construction is an official document issued by the Department of Urban Development of the corresponding state or municipality, through which it is stated that the facility, building or construction fulfills conditions, specifications, area and boundaries that were authorized throughout the blueprints and the construction permit issued by the authorities.

It also states whether the construction or building was concluded to one hundred percent during the period granted for such purpose.

The occupation and safety approval, is an official document that certifies that a certain building or construction meets the necessary structural requirements for its occupation. The above, in accordance with the provisions set forth in the laws, regulations and other applicable standards.

This document must be obtained by owners or possessors of newly constructed buildings, with an occupation of over 50 people, or in case that derived from the activities or operations of the company, the building or construction exceeds 50 square meters (538 square foot).

The civil protection approval and the authorization of the internal civil defense program, are official documents issued by the Civil Protection Department of the corresponding state or municipality, which state that the property or building meets the necessary safety measures and requirements for the mitigation of risks (emergency exits, fire extinguishers, signaling, specialized equipment emergency lamps, safety windows, etcetera).

It is worth mentioning that in some cases and according to the state or municipality where the company is established, courses on civil protection, and training on the use of extinguishers and first aid may be required for all the company's employees.

The operating license is an official authorization granted by the Commerce Department of the Ministry of Finance, or by the City Hall of the corresponding municipality, which authorizes the development of the type of economic activity carried out in the related state or municipality, in accordance with the specific line of business of the company and for a particular location in favor of the holder.

It is important to note that the authorities may grant operating licenses for more than one line of business; provided that they are similar or complementary. Municipalities, by way of ordinance, must define the related or complementary line of businesses attending to their jurisdiction.

Companies located in two or more commercial establishments must obtain a license for each.

It is an official authorization granted by the Commerce Department of the Ministry of Finance, or by the City Hall of the corresponding municipality, which authorizes owners or possessors of buildings, to construct or place any illustration, symbol, line, number, letter, word, phrase, picture or combination of these, which identifies a product, service, message or idea.

Signs may be attached to buildings, constructions, structures, billboards, panels, real or personal property, and will be considered part of the sign for purposes of the payment of government fees.

This authorization is an environmental policy that aims to prevent, mitigate and repair the damage to the environment, and to regulate activities to avoid or reduce adverse impacts to the environment and on human health.

This official document states that the construction activities to be carried out are compatible with the environmental preservation policies and the management of natural resources. In most cases the environmental impact authorization is required for the construction of large buildings or facilities.

It is important to note that other type of permits, licenses and authorizations may be required from the federal, state or municipal authorities, in health, environmental or administrative matters; depending on the specific line of business of the company.

In general terms, the administrative sanctions for operating without a specific permit, license or authorization, are: (i) fines; (ii) total or partial closing of the property; (iii) total or partial suspension of activities; (iv) arrest; and (v) demolition (in case of constructions made or signs installed without the corresponding permits). The above-mentioned sanctions do not exclude the imposition of others.

Although according to law the authorities have a maximum period of 3 months to issue permits and licenses listed above, in practice, this period may vary depending on the complexity of the information requested, or the workload of the corresponding authorities.