November 2, 2020 | by Wong Fleming
The enacting of the United States-Mexico-Canada Agreement (USMCA), on July 1st of 2020, creates business opportunities in Mexico for the financial sector.
Financial services in Mexico are a profitable business given that fees and interest rates applied to customers are among the highest in the world.
As a consequence, the current players in Mexico have not had incentives to offer new services or improve market penetration.
These circumstances may change with the enactment of USMCA, which provisions seek to improve competitiveness in the sector.
We hereby briefly list some of the provisions included in Chapter 17 of USMCA, titled “Financial Services”:
- No party shall oblige a cross-border provider of financial services of another party to establish or maintain a representation office in its territory.
- Each party shall grant the investors of the other parties, treatment that is not less favorable than that granted to its own investors.
- No party shall adopt measures that impose limitations in the number of financial institutions or cross-border service providers.
- Each party shall grant the financial institutions of the other parties established in its territory, access to payment and clearing systems administered by its public entities.
- No party shall require a covered person to use or locate computing facilities in its territory, as a condition for doing business.
Mexico is the 15th largest economy in the world and has a population of 127 million. Based on official data, at least 39 million Mexicans use financial services, and thus, there is a great market share available.
It is expected that the new provisions of USMCA will create greater business opportunities for American and Canadian players in this important sector.
About Martha Villalobos
Martha Angélica Villalobos Murillo is the Partner-in-Charge of the Firm’s Chihuahua, Mexico alliance office of Wong Fleming, which is called Villalobos & Moore. Ms. Martha Villalobos has experience in corporate law, mergers and acquisitions, incorporation and liquidation of companies, corporate housekeeping, corporate due diligence, public bids, governmental permitting and investment incentives, design and negotiation of contracts, including services agreements, manufacturing, distribution, supply and confidentiality agreements. She has also practiced real estate law for more than seventeen years with specialized experience in the corporate and mining areas. In addition, she has knowledge and experience in environmental, labor, litigation and foreign trade.