In a global environment increasingly focused on transparency and the fight against illicit activities such as money laundering and terrorist financing, Mexico has implemented robust measures to identify the individuals who ultimately benefit from or exercise control over companies and other legal entities. The figure of the Benef Ctrl MX (Controlling Beneficiary) is central to this effort. For any company operating in Mexico, including those in the dynamic state of Quintana Roo, understanding this key entity, why it's vital to identify it, and the associated legal obligations is essential to ensuring compliance and avoiding severe penalties.
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What is a Benef Ctrl MX according to Mexican legislation?
The concept of Benef Ctrl MX se refiere a la(s) persona(s) física(s) que efectivamente controlan o se benefician económicamente de una persona moral (empresa), fideicomiso u otra figura jurídica. El objetivo es “desvelar” las estructuras corporativas para llegar a los individuos reales detrás de ellas. El Federal Tax Code (CFF), in its articles 32-B Ter, 32-B Quáter and 32-B Quinquies, together with rules of the Tax Miscellaneous Resolution (RMF) issued by the SAT, establishes the definition and criteria for its identification.
The final beneficiary is considered to be the person or group of natural persons who:
- Directly or indirectly, they obtain the benefit derived from the entity or legal entity, or exercise the rights of use, enjoyment, benefit, or disposal of a good or service operated by the entity.
- Directly, indirectly, or contingently, they exercise control over the legal entity, trust, or legal entity. This control may be expressed through ownership of securities, a contract, or any other legal act.
Understand who is the controlling beneficiary It is the first step to comply with this important regulation.
Why is this identification so important for your company?
The identification of the Benef Ctrl MX It is not a mere bureaucratic procedure; it responds to Mexico's international commitments (aligned with the FATF recommendations) and has profound implications for the integrity of the financial system and corporate legality. Its importance lies in:
- Promoting Corporate Transparency in Mexico: It allows us to know who the true owners or controllers of companies are.
- Prevent Money Laundering and Terrorist Financing (MLD/FT): It makes it difficult to use opaque corporate structures to hide the illicit origin of funds. This is a key function of the anti-money laundering law beneficiary controller.
- Tax Compliance: It is a formal obligation before the SAT, and failure to comply may result in the inability to obtain positive compliance opinions or in the restriction of digital seals.
- Strengthening Corporate Integrity: Promotes a culture of legality and responsibility within organizations.
- Avoid Severe Penalties: Failure to identify or report the beneficial owner can result in significant fines.
For a more detailed view on this topic, you can consult our specialized article on the Controlling Beneficiary. Meet the Benef Ctrl MX is crucial.
Legal Obligations of Companies Regarding the Controlling Beneficiary
Legal entities, fiduciaries and other legal entities have several obligations beneficiary controller SAT and legal regarding the Benef Ctrl MX:
Exhaustive Identification
They must implement procedures of due diligence of the controlling beneficiary reasonable and as exhaustive as necessary to obtain reliable and complete information on the identity of each beneficial owner. This may involve reviewing complex chains of ownership.
Obtaining and Preserving Information
Documentation supporting the identification of this entity must be collected and retained as part of the accounting process. This information includes, among others: full name, aliases, date and country of birth, nationality, CURP (Tax Identification Number), RFC (or its foreign equivalent), marital status, contact information (email, telephone), home and tax addresses, and a description of the relationship with the legal entity or legal entity, as well as the percentage of ownership or form of control. This information about the beneficiary must be retained for at least five years after the relationship with the beneficiary has ended.
Keeping Information Up-to-Date
It is crucial to keep the information of each person identified as up to date. Benef Ctrl MXAny changes to the data provided or the control structure must be documented and updated promptly.
Provide Information to the Authorities
The SAT (Tax Administration Service) and other financial or supervisory authorities (such as the UIF (Financial Intelligence Unit) or the CNBV (National Tax Commission)) may request information on the controlling beneficiary at any time. Companies are required to provide this information within the established deadlines.
Specific Criteria for the Identification of the Final Beneficiary
The Beneficiary controller identification Mexico It is based on a series of criteria, applied successively to determine who is the Benef Ctrl MX:
Control by Ownership
Se refiere a la(s) persona(s) física(s) que poseen, directa o indirectamente, una participación en el capital social o derechos de voto de la persona moral en un porcentaje significativo (la legislación y la RMF suelen establecer umbrales, como más del 25%, pero esto debe verificarse, ya que el concepto es “influencia significativa”).
Control by Other Means (Factual Control)
If no beneficial owner is identified, the individual(s) who exercise de facto control are sought, that is, those who have the power to impose decisions at general meetings of shareholders or partners, appoint or remove the majority of directors or managers, or direct the administration, strategy, or main policies of the entity.
Control by Chain of Ownership or Control
The identification of the ultimate beneficiary must be carried out even if control is exercised through several legal entities or interposed legal vehicles (chains of ownership or control).
Subsidiary Case: Administrators
When, after applying the above criteria, no natural person can be identified as the ultimate controller or beneficiary, the sole director of the legal entity or, where applicable, each of the members of its board of directors will be considered as such.
Who Is Obliged to Identify the Controlling Beneficiary?
The obligation to identify, obtain, retain and, where appropriate, provide the information of the Benef Ctrl MX falls on:
- All legal entities incorporated in Mexico (commercial companies, associations and civil societies, etc.).
- Trustees in trusts (particularly those that are not financial institutions).
- The trustors or trustees, in certain cases.
- The contracting parties or members of any other legal entity similar to trusts.
- Notaries, public brokers, and other public notaries, regarding the information they obtain in the formalization of certain acts.
Sanctions for Non-Compliance with Obligations on the Controlling Beneficiary
The Federal Tax Code establishes sanctions for non-compliance with the controlling beneficiary very severe for those who do not comply with these obligations. Fines can range from $500,000 to $2,000,000 pesos for each Benef Ctrl MX unidentified or whose information has not been properly obtained, maintained, updated, or presented. These sanctions can be a severe blow to any business, so compliance is critical.
Practical Recommendations for Compliance in this Matter
In order to properly comply with the obligations relating to the Benef Ctrl MX, it is recommended:
- Implement Internal Policies: Develop and document a clear procedure for identifying, verifying, and updating beneficiary information.
- Designate a Responsible Person: Appoint a person or department within the company to be responsible for fulfilling these obligations (similar to a Compliance Officer).
- Rigorous Due Diligence: Don't limit yourself to superficial information; thoroughly investigate the ownership and control structure, especially in complex cases.
- Document Everything: Maintain a complete file with all information and documentation that supports the identification of the beneficiary and the efforts made.
- Periodic Update: Set reminders to review and update information annually or when significant changes occur in the company structure.
- Specialized Consulting: Given the complexity and potential penalties, seek legal advice beneficiary controller It is highly recommended.
Legal Advice: Your Key to Compliance with the Controlling Beneficiary
The regulations on the Benef Ctrl MX can be complex to interpret and apply, especially in corporate structures with multiple levels or foreign participation. corporate lawyer with experience in this area can:
- Help to correctly interpret the legal criteria for identifying the ultimate beneficiary.
- Design and implement due diligence and compliance procedures tailored to your company.
- Assist in obtaining and organizing the necessary documentation.
- Provide support in case of requests from tax or financial authorities.
- Keep you updated on regulatory changes and criteria of the authority regarding the Benef Ctrl MX.
At City Laws, our team in Quintana Roo is ready to offer you the advice you need on the Benef Ctrl MX.
In conclusion, the figure of the Benef Ctrl MX It is an essential component of the new paradigm of transparency and corporate compliance in Mexico. For companies in Quintana Roo and throughout the country, understanding and complying with the identification, documentation, and reporting obligations of this figure is not just a formality, but a necessity to operate legally, avoid hefty penalties, and contribute to a more equitable business environment. Compliance with the Benef Ctrl MX is a priority.
If your company requires support to understand and comply with the obligations related to the Benef Ctrl MX, Contact City LawsWe'll help you navigate these requirements safely and effectively.