Enacted on May 1, 1970, the Mexican Labor Act (the “MLA”) governs all labor relations in Mexico falling under the scope of article 123, section A, of the Federal Constitution (which refers to private employment as opposed to bureaucratic employment). The spirit of the law is to provide protection to employees and this explains the basis for numerous provisions of restrictive and prohibitive nature.

The Mexican Constitution expressly forbids the direct acquisition of real estate by foreign individuals or foreign entities in the so-called “restricted zone”. The restricted zone comprises an area of 100 kilometers along the borders and 50 kilometers along the seashores. In this restricted zone, only Mexican individuals and Mexican companies (notwithstanding any foreign investment in them) may directly acquire land and buildings.