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Restricted sectors in Mexico: activities reserved to the State, reserved to Mexicans and capped for foreign investors

Last verified: 2026-10-26 · Status: Stable

Most of the Mexican economy is open to 100 percent foreign ownership, but the Foreign Investment Law keeps four lists: strategic areas reserved to the State, activities reserved to Mexicans, activities capped at 10 or 49 percent, and activities that need CNIE approval above 49 percent. The Constitution, as reformed in October 2024, adds lithium, the State internet service and the activities of State public companies to the strategic areas, and makes satellite communication and rail priority areas where private parties need a concession. Caps cannot be bypassed through trusts, side agreements or pyramid structures; the only lawful route to more economic exposure is neutral investment, and acts that break the rules can be declared void and fined.

USD figures use MXN 18.5026 per US dollar, the Federal Reserve H.10 noon buying rate for 16 October 2026 (FRED series DEXMXUS), the latest official observation verified for this page. Conversions are for orientation only.

Key facts

Foreign investment cap in domestic air transport	49 %LIE art. 7, fraction III, y), as of 2026-10-26 · in force
Foreign investment cap in broadcasting, subject to reciprocity	49 %LIE art. 7, fraction III, x), as of 2026-10-26 · in force
Foreign investment cap in production cooperatives	10 %LIE art. 7, fraction I, as of 2026-10-26 · in force
Foreign investment cap in inland and cabotage shipping companies (cruises and dredges excluded)	49 %LIE art. 7, fraction III, v), as of 2026-10-26 · in force
Domestic land transport of passengers, tourism and freight (courier excluded) reserved to Mexicans	Yes textLIE art. 6, fraction I, as of 2026-10-26 · in force
Lithium is a State strategic area under the Constitution	Yes textConstitution art. 28, fourth paragraph, as of 2024-10-31 · in force
General fine for LIE infractions without a specific penalty	100 to 1,000 UMALIE art. 38, fraction VI, as of 2026-10-26 · in force

The rule

1. Strategic areas reserved to the State. The LIE reserves exclusively to the State the functions that the laws set in these strategic areas: exploration and extraction of oil and other hydrocarbons; planning and control of the national electricity system and the public service of electricity transmission and distribution; nuclear power generation; radioactive minerals; telegraphs; radiotelegraphy; mail; issuing banknotes; minting coins; control, supervision and surveillance of ports, airports and heliports; and any others that laws expressly set. Private and foreign capital can still take part in these value chains only where the sector law allows contracts, permits or concessions.
Cost to do it: Not available to private investors at any price; the relevant cost is structuring a project around the contracts or permits the sector law allows.
Example: A foreign group cannot own Mexico's electricity transmission grid, but it can build and own a private generation plant if the electricity sector law allows the permit. / The same restriction applies whatever the size of the investment in US dollars.Ley de Inversión Extranjera (Foreign Investment Law, LIE), DOF 27 December 1993, last reform DOF 27 May 2024, Art. 5 (fractions I and III reformed DOF 11 August 2014), 1993-12-27 official text · verified 2026-10-26

2. The Constitution now goes further than the LIE list. Following the reforms published in the DOF on 30 and 31 October 2024, Constitution art. 28 lists as State strategic areas mail, telegraphs and radiotelegraphy; radioactive minerals, lithium and nuclear power generation; the internet service provided by the State; planning and control of the national electricity system and electricity transmission and distribution; oil and hydrocarbon exploration and extraction; and the activities of State public companies and others the laws set. Satellite communication and railways, for both passengers and freight, are priority areas where the State grants assignments, concessions or permits, and the State has retaken the right to use rail tracks to provide passenger service, through public companies or concessions to private parties. Where the LIE text and the Constitution differ, the Constitution prevails.
Cost to do it: No fee; the cost is the narrower room for private projects in lithium, grid and rail.
Example: A foreign battery maker can buy lithium compounds and build a cathode plant, but cannot hold a private concession to mine lithium in Mexico. / Not applicable.Constitución Política de los Estados Unidos Mexicanos (Constitution), as last reformed DOF 7 October 2026, Art. 28, fourth and fifth paragraphs (reformed DOF 30 and 31 October 2024), 2024-10-31 official text · verified 2026-10-26 · changed: The October 2024 constitutional reforms added lithium, the State internet service and the activities of State public companies to the strategic areas, framed electricity planning around a State public company and named passenger and freight rail as priority areas.

3. Activities reserved to Mexicans. Only Mexicans or Mexican companies with a foreigners exclusion clause may carry out domestic land transport of passengers, tourism and freight (courier and parcel services are not included), development banking, and the professional and technical services that specific laws reserve. Foreign investment cannot take part in these activities directly or through trusts, agreements, bylaw clauses, pyramid schemes or any other mechanism that gives control or any participation, except through neutral investment. A foreigners exclusion clause is a bylaw clause stating that the company will not admit foreign investors, directly or indirectly, nor companies that admit foreigners.
Cost to do it: No approval is available; a breach exposes the deal to nullity (LIE art. 37) and fines of 100 to 1,000 UMA, MXN 11,731 to MXN 117,310 at the 2026 UMA of MXN 117.31 (LIE art. 38, fraction VI).
Example: A foreign logistics group may own 100 percent of a Mexican courier and parcel company, but not of a company that runs domestic truck freight, which must stay in Mexican hands. / Fine range about USD 634 to USD 6,340.Ley de Inversión Extranjera (Foreign Investment Law, LIE), DOF 27 December 1993, last reform DOF 27 May 2024, Art. 6; art. 2, fraction VII, 1993-12-27 official text · verified 2026-10-26

4. Activities capped at 10 or 49 percent. Foreign investment may hold up to 10 percent of production cooperatives. It may hold up to 49 percent in: making and selling explosives, firearms, cartridges, ammunition and fireworks (industrial use of explosives excluded); printing and publishing newspapers circulated only in Mexico; series T shares of companies that own agricultural, livestock and forest land; fishing in fresh water, coastal waters and the exclusive economic zone (aquaculture excluded); integral port administration; port pilotage for inland navigation; shipping companies for inland and coastal (cabotage) navigation, except tourist cruises and dredges; supply of fuel and lubricants for vessels, aircraft and railway equipment; broadcasting, subject to reciprocity with the country of the investor or its ultimate controller; and domestic scheduled and non scheduled air transport, international non scheduled air taxi and specialized air transport. These limits cannot be exceeded directly or through trusts, agreements, bylaw clauses, pyramid schemes or any mechanism that gives control or a larger share, except through neutral investment.
Cost to do it: No fee to invest up to the cap. Exceeding it is not possible by approval; the economic exposure above the cap can only be taken through authorized neutral investment (see Neutral investment).
Example: A foreign airline group investing MXN 490,000,000 for 49 percent of a domestic airline with MXN 1,000,000,000 of capital is at the cap; any further voting shares must go to Mexican holders. / MXN 490,000,000 is about USD 26,482,765; total capital about USD 54,046,458.Ley de Inversión Extranjera (Foreign Investment Law, LIE), DOF 27 December 1993, last reform DOF 27 May 2024, Art. 7, fractions I and III, last paragraph (fraction III reformed DOF 24 December 1996; items w, x and y reformed or added DOF 26 June 2017), 2017-06-26 official text · verified 2026-10-26

5. How the share is counted. Foreign investment made indirectly through Mexican companies with Mexican majority capital is not counted toward the caps, as long as those companies are not controlled by foreign investment. Foreign participation is measured against all shares that are not neutral investment, including shares placed in trust. Investment by foreigners who hold permanent resident status counts as Mexican investment, except in the activities of Titles One and Two of the LIE (reserved and capped activities, and real estate and trusts in the restricted zone).
Cost to do it: No fee; the cost is the legal work to document control and the share calculation.
Example: A Mexican company owned 70 percent by Mexicans and 30 percent by a foreign fund, and not controlled by the fund, can hold shares in a capped activity without its stake being counted as foreign. / Not applicable.Ley de Inversión Extranjera (Foreign Investment Law, LIE), DOF 27 December 1993, last reform DOF 27 May 2024; Reglamento de la Ley de Inversión Extranjera y del Registro Nacional de Inversiones Extranjeras (RLIE), DOF 8 September 1998, last reform DOF 17 August 2016, LIE art. 4, third paragraph (added DOF 24 December 1996) and art. 3 (reformed DOF 25 May 2011); RLIE art. 1, fraction V, 2011-05-25 official text · verified 2026-10-26

6. Companies that admit foreigners must carry the foreigners agreement. When bylaws do not include the foreigners exclusion clause, they must include an agreement under which current and future foreign partners bind themselves before the Ministry of Foreign Affairs to be treated as Mexicans regarding their shares, the company's assets, rights and concessions, and its contracts, and to renounce the protection of their governments, on pain of losing those rights and assets to the Nation.
Cost to do it: No separate fee; the clause goes into the bylaws prepared by the notary at incorporation (see Entities).
Example: A Mexican S.A. de C.V. formed by a US parent includes the foreigners agreement in its bylaws at incorporation so that it can admit the foreign shareholder. / Not applicable.Reglamento de la Ley de Inversión Extranjera y del Registro Nacional de Inversiones Extranjeras (RLIE), DOF 8 September 1998, last reform DOF 17 August 2016, Art. 14, 1998-09-08 official text · verified 2026-10-26

7. Broadcasting and telecom concessions. Concessions under the Telecommunications and Broadcasting Law are granted only to Mexican individuals or companies; foreign participation in concessionaire companies is allowed on the terms of the Constitution and the LIE, and an application for a broadcasting concession with foreign participation needs a prior favorable opinion of the CNIE, which checks the investment limits. The 2026 duty for that CNIE opinion is MXN 29,675.
Cost to do it: MXN 29,675 government duty for the CNIE opinion in 2026 (about USD 1,604).
Example: A Mexican radio company with a 49 percent foreign shareholder applying for a new broadcasting concession first obtains the CNIE opinion and pays MXN 29,675. / About USD 1,604.Ley en Materia de Telecomunicaciones y Radiodifusión, DOF 16 July 2025; Ley Federal de Derechos (LFD), last reform DOF 7 November 2025, with 2026 amounts in RMF 2026 Annex 4 (DOF 28 December 2025), Telecom law art. 56; LFD art. 72, fraction X (reformed DOF 7 November 2025), 2025-07-16 official text · verified 2026-10-26

8. Consequences of breaking the rules. The Ministry of Economy may revoke authorizations granted for acts that contravene the LIE, and acts, agreements and bylaw clauses it declares void have no legal effect between the parties and cannot be raised against third parties. Infractions not covered by a specific fine are fined 100 to 1,000 times the daily reference, which is read as the UMA since the 2016 deindexation reform.
Cost to do it: MXN 11,731 to MXN 117,310 at the 2026 UMA of MXN 117.31, plus loss of the structure if voided.
Example: A side agreement giving a foreign investor veto control over a capped fishing company can be declared void, and the parties fined up to MXN 117,310. / Up to about USD 6,340.Ley de Inversión Extranjera (Foreign Investment Law, LIE), DOF 27 December 1993, last reform DOF 27 May 2024, Arts. 37 and 38, fraction VI, 1993-12-27 official text · verified 2026-10-26

Regime	Main activities	Legal basis
Reserved to the State	Hydrocarbon exploration and extraction; grid planning, transmission and distribution; nuclear power; radioactive minerals and lithium; mail and telegraphs; banknotes and coins; port and airport control	LIE art. 5; Constitution art. 28
Reserved to Mexicans	Domestic land transport of passengers, tourism and freight (not courier); development banks; professional services reserved by law	LIE art. 6
Up to 10 percent	Production cooperatives	LIE art. 7, I
Up to 49 percent	Explosives and firearms; national newspapers; series T farmland shares; fishing (not aquaculture); integral port administration; inland pilotage; cabotage shipping; fuel supply to vessels, aircraft and trains; broadcasting (reciprocity); domestic air transport and air taxi	LIE art. 7, III
Above 49 percent with CNIE approval	Inland port services (towing, mooring, launches); deep sea shipping; public aerodromes; private schools; legal services; railways	LIE art. 8
Above 49 percent with CNIE approval if assets exceed the annual threshold	Any other company, when acquiring shares of an existing company	LIE art. 9; RLIE art. 3
Open to 100 percent	Everything else, including manufacturing, retail, courier, construction and most services	LIE art. 4

Foreign ownership regimes under the LIE and the Constitution (October 2026)

Worked example

A European investor wants to buy a Mexican regional airline with MXN 1,000,000,000 of share capital (about USD 54,046,458).
Domestic air transport is capped at 49 percent (LIE art. 7, fraction III, y), so the investor can hold at most 49 percent of the voting capital, MXN 490,000,000 (about USD 26,482,765).
A shareholders agreement that would give the investor control beyond 49 percent is barred (art. 7, last paragraph) and can be declared void (art. 37).
If the investor wants more economic exposure, the company can ask the Ministry of Economy to authorize a series of neutral shares with limited or no voting rights, which are not counted toward the cap (arts. 18 and 20; see Neutral investment).

Step by step

1. Classify the target's activities against LIE arts. 5 to 9 and Constitution art. 28 before signing a term sheet.
2. Check sector laws (telecom, aviation, ports, hydrocarbons, electricity, mining) for concession or permit rules that add to the LIE limits.
3. If a cap applies, design the capital structure with Mexican voting holders and, if needed, neutral shares; document that no side agreement gives control.
4. If the activity is listed in art. 8, or the art. 9 asset test is met, file with the CNIE and close only after approval or the 45 business day silence period (see CNIE approval and screening).
5. Put the foreigners agreement in the bylaws (RLIE art. 14) and register the investment in the RNIE within 40 business days (see Foreign investment registry).

Common traps

Outdated LIE list. LIE art. 5 still reflects the 2014 wording; lithium and the State internet service were added at constitutional level in October 2024, and the Constitution prevails.
Courier versus freight. Courier and parcel services are open to 100 percent foreign ownership, but domestic truck freight is reserved to Mexicans (LIE art. 6, fraction I).
Control through contracts. Trusts, voting agreements and pyramid structures that give foreign control above a cap are prohibited (LIE arts. 6 and 7) and can be voided (art. 37).
Aquaculture versus fishing. Coastal and EEZ fishing is capped at 49 percent; aquaculture is not (LIE art. 7, fraction III, s).
Broadcasting reciprocity. The 49 percent ceiling in broadcasting depends on reciprocity with the country of the ultimate controller (LIE art. 7, fraction III, x).
Permanent residents are not foreign investors for most purposes, but they are for reserved and capped activities (LIE art. 3).

Sources

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