While a Mexican resident company is liable for corporate income tax on its worldwide income, a nonresident company with a branch that constitutes a permanent establishment in Mexico is liable for corporate income tax only on income attributable to that branch (see "TAXATION OF NONRESIDENT ENTITIES"). The rate is the same. However, tax and other incentives may be more difficult to obtain for branches than for corporations. Investors should also be aware that there are tax implications when a branch is reorganized as a subsidiary.

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