Most of the industrial buildings occupied in Mexico are leased by manufacturers. Although with some degree of frequency, larger multinationals purchase land for large projects and construct their own buildings to execute greenfield developments, start-up companies in Mexico often acquire industrial space on a lease basis.
A legal perspective on industrial leasing
Manufacturers should familiarize themselves with how the particular state in which they plan to locate defines the rights and responsibilities of both the lessor and the lessee that are part of leasing industrial space in Mexico under its particular set of rules. From a legal perspective, the Mexican Civil Codes are applicable to the leasing of industrial space in Mexico. It is important to note that each of Mexico’s thirty-one states has its own Code related to the leasing of industrial space.
From a general perspective, it can be said that the laws governing the leasing of commercial and industrial real estate in Mexico are essentially pro-tenant. For buildings used for manufacturing and/or fabrication purposes, most Mexican state codes normally permit the negotiation of industrial building leases for a period of up to twenty years. These agreements, upon termination, are renewable through a process established by the agreement, should both parties decide to continue the tenant/landlord relationship.
Taxes on leasing of industrial buildings
When leasing industrial space in Mexico, it is important to know that companies are charged a sixteen percent value-added tax on the lease price of the building. However, a refund of the VAT payment paid on the industrial lease may be obtained if the manufacturer occupying the building has been certified as an IMMEX company, in accordance with the criteria established for such certification under the legislation that has been put in place through Mexico’s recent tax reform measures. It is also important to remember that most lessons that are involved in leasing industrial space in Mexico include escalation clause provisions in the lease agreement to protect against inflation that may occur during the term of the lease agreement.
VYNMSA is one of the leading industrial real estate developers in Mexico. In addition, we are able to develop your Build To Suit or custom projects. We actively work with industrial real estate brokers as business partners, we have around 20 buildings of inventory ready for immediate occupancy, which adds up to around 2 million square feet of built space in the northeast and bajio region of Mexico.
Contact us and discover why VYNMSA is your best industrial real estate business partner in Mexico.
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