1E9Ct5D

through a subsidiary, which can be incorporated based on explanation in Point 2 andsubsequent points of this chapter.8. Non-Income Earning Representative OfficeThe establishment of a non–income earning representative office is recommended forthose foreign companies who only wish to have a representative in Mexico, since theywill not engage in commercial transactions and their activity will be limited to the identificationof potential clients or acting as a point of contact between the foreign companyand Mexican clients.In order for a non–income earning representative office not to be considered a permanentestablishment subject to the strict tax regulations of the country, its representativesin Mexico must abstain from engaging in any commercial activities and thereforefrom executing contracts, importing or exporting merchandise or assuming risks onbehalf of the foreign company.8.1. PowersIn order to open a non–income earning representative office in Mexico, the foreign companymust adopt a resolution approving the establishment in Mexico of such office andgrant powers of attorney to the legal representatives in Mexico. The powers granted to therepresentatives in Mexico should be limited to the execution of contracts for the operationsof the office, such as the execution of the lease agreement for the office, the hiringof personnel, the registration and cancellation of employees before the applicable authorities,the contracting of telephone services, among others.The resolution to open the non–income earning representative office must be certifiedby a notary public commissioned in the domicile of the foreign company and subsequentlylegalized in the Mexican consulate of such domicile or apostilled in accordancewith the Hague Convention of October 5, 1961 if the foreign company is incorporated ina country that is a member of such convention. The resolution to open the non–incomeearning representative office, once legalized or apostilled, must be translated into Spanishby an authorized translator and, if legalized before the Mexican consulate, notarizedbefore a certifying public officer in Mexico.67Requirements for Establishing a Company in Mexico8.2. Authorization of the Foreign Investment BureauThere is an unresolved debate as to whether or not the authorization of the Foreign InvestmentBureau is required to open a non–income earning representative office. The LGSMestablishes that foreign companies may only do business in Mexico after registration in the