Structuring inbound transactions to Mexico typically involves a variety of transfer pricing and substantive income tax law considerations, in Mexico as well as the countries pertinent to the inbound flow (typically including the home country of the multinational enterprise ("MNE") and any intervening entities).
Review of pertinent planning considerations is most easily facilitated by a Case Study.
A. Case Study
ILLUSTRATION 1. ForCo is a U.. based multinational enterprise ("MNE") operating a worldwide manufacturing, distribution and servicing business. ForCo provides to customers: (1) hardware; and (2) installation services (which are provided with intangible property developed by ForCo). Some products are manufactured on a sole-sourcing basis for the world, while others are produced on a regional or geographic basis by ForCo and its affiliates.