Mexico – Expanded UBO Rules Create Dual Compliance Burden for Companies

Mexico has introduced significant changes to its beneficial ownership framework through a July 2025 amendment to the Federal Law for the Prevention and Identification of Transactions Involving Illicit Proceeds (LFPIORPI).

The reform expands the scope of beneficial ownership obligations to all companies and introduces a new requirement to register UBO information with the Ministry of Economy.

Regulatory Background

The reform broadens the application of UBO requirements beyond entities engaged in “vulnerable activities” to include all legal entities, regardless of their business activities. It also introduces an updated definition of beneficial ownership, aligned with a control-based approach.

Under the revised framework, a beneficial owner is any natural person who ultimately benefits from, or exercises effective control over, a legal entity. Control may be established through:

• Ownership or voting rights exceeding 25%
• The ability to influence shareholder or management decisions
• Control over the entity’s strategy, administration, or key policies

The legislation also confirms that “beneficial owner,” “final beneficiary,” and “real owner” are equivalent concepts under the AML regime.

Introduction of a New UBO Register

The amendment establishes a requirement for companies to register beneficial ownership information with the Ministry of Economy. However, the detailed rules governing how this information must be submitted and maintained are still pending.

These secondary regulations are expected by July 2026, meaning that while the legal obligation exists, the operational framework for filing has not yet been finalized.

Parallel Compliance Frameworks

The AML reforms operate alongside existing UBO obligations introduced under the Federal Tax Code in 2022. As a result, companies are currently required to maintain two separate beneficial ownership records:

• One to satisfy tax authority (SAT) requirements
• One to comply with AML obligations under LFPIORPI

Compliance with one regime does not automatically fulfill the requirements of the other, creating an additional layer of administrative complexity.

Applicability and Scope

The updated AML requirements apply to all legal entities incorporated in Mexico, including those not previously in scope under the vulnerable activities regime.

Effective Date

The reform entered into force on the 17^th of July 2025, with secondary regulations expected imminently (July 2026).

Practical Considerations and Ongoing Obligations

In advance of the issuance of detailed filing rules, companies should:

• Identify and document their beneficial owners in line with the updated definition
• Ensure internal records are maintained for both AML and tax compliance purposes
• Review existing governance and ownership structures to confirm alignment across both frameworks

Further requirements, including reporting timelines and update obligations, are expected to be clarified once the secondary regulations are issued.

Risks of Non-Compliance

While detailed enforcement mechanics under the new AML framework are still developing, failure to comply with beneficial ownership requirements may expose companies to regulatory scrutiny, administrative penalties, and increased risk in the context of anti-money laundering enforcement.

How Mercator® by Citco (Mercator) Can Help

Mercator can assist with:

• Establishing and maintaining UBO registers under both AML and tax frameworks
• Designing compliance processes and documentation aligned with LFPIORPI requirements
• Preparing for future registration obligations with the Ministry of Economy once rules are issued

For assistance, please contact mercator@citco.com