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CHAPTER IIForeign InvestmentRegulationForeign investment is essential for Mexican development. It makes possible the useof foreign currency in domestic economic activity, thereby contributing to the creationof sources of employment and the adoption and dissemination of new technologies.Mexico has succeeded in recent years in becoming one of the principal countriesreceiving foreign investment, particularly in the manufacturing, transportation, andcommunication sectors, as well as in the financial services sector. In addition, Mexicaninternational trade has increased significantly in conjunction with the economic growthof the country.Among the factors most influential to this growth are the opening of the Mexicaneconomy, deregulation and administrative simplification, and the new legal frameworkcreated over the last 20 years with the goal of strengthening and facilitatingforeign investment in domestic economic activity and liberalizing Mexican internationaltrade. This new legal framework consists primarily of the following laws andregulations:a) The Foreign Investment Law (Ley de Inversión Extranjera, LIE), issued in 1993 forthe purpose of opening several economic sectors to foreign investment and establishingclear and permanent rules that provide a framework of legal certainty,thereby making investment in Mexico attractive for foreign investors and ensuringthe retention of foreign investment in the economy;b) The Regulation of the Foreign Investment Law and of the National Registry of ForeignInvestors (Reglamento de la Ley de Inversión Extranjera y del Registro Nacional deInversiones Extranjeras), issued in 1998 in order to spell out the administrative detailsof the rules set forth in the LIE, clarifying the scope of the sectorial opening establishedtherein and the administrative simplifications.35