Declaration Of Special Economic Zones ("SEZs")

The Executive published on September 29, 2017 declarations of the first three SEZs: (i) Puerto Chiapas, (ii) Coatzacoalcos (Veracruz) and (iii) Lázaro Cárdenas – La Unión (Michoacan).

The main purposes of each SEZ are to reduce poverty and promote the sustainable economic growth of the country. The way to reach such purposes is through energy and transportation projects, granting certain tax, customs and social security benefits.

Each SEZ offers the following benefits:

I. tax :

• Income Tax ("IT"). Reduction of IT during the first fifteen fiscal years during which activities are carried out within the SEZ. The discount will be 100% during the first ten years and 50% during the following five years.