Beyond the ultimate beneficial owner: Key implications of Mexico’s new anti-money laundering reform
Francisco Vilchis Orea
by Francisco Vilchis Orea
Mexico’s legal framework for preventing money laundering and asset concealment has undergone a substantial overhaul. On 16 July 2025, a sweeping reform to the Federal Law for the Prevention and Identification of Operations with Illicit Proceeds (LFPIORPI) came into effect, also impacting the federal criminal code. This legislative update aims to strengthen institutional control mechanisms, expand the scope of vulnerable activities, and raise compliance standards for both companies and professionals.
One of the most significant elements of the reform is the mandatory identification and registration of the ultimate beneficial owner(UBO) by all commercial entities. This obligation goes beyond merely collecting documentation; it also requires timely reporting to the Ministry of Economy of any transfer of ownership or changes in corporate rights. This approach aligns Mexico’s framework with international standards, demanding greater transparency in the real ownership of business structures.
Another key development is the formal inclusion of politically exposed persons (PEPs) within the scope of the law. Regulated entities must now implement specific mechanisms to identify, monitor, and report transactions involving PEPs. This includes the adoption of internal policies and automated systems capable of detecting deviations from established transactional patterns.
The reform also introduces new categories of vulnerable activities, including real estate projects intended for sale or rent, as well as cryptocurrency transactions carried out abroad by Mexican nationals. Identification and reporting thresholds have also been revised for activities such as the issuance of prepaid cards, the establishment of trusts, gambling operations, and transactions conducted before notaries or public brokers.
A particularly noteworthy requirement is the extended obligation to retain documentation for ten years – double the timeframe previously required. Additionally, entities must implement internal or external audits depending on their risk level. While this represents an increased administrative and financial burden, it also presents an opportunity to reinforce internal controls and overall compliance frameworks.
The use of cash in specific transactions is now explicitly prohibited, even when conducted through financial institutions. Furthermore, the obligation to report suspicious operations within 24 hours has been reinforced, even if the transaction was ultimately not executed.
Although the decree is already in effect, the Ministry of Finance and the Tax Administration Service (SAT) have up to twelve months to issue the secondary rules needed for full implementation. This transition period is expected to result in a progressive, yet accelerated, shift toward comprehensive compliance.
For companies and professionals engaged in regulated activities, this is a critical time to assess their risk exposure and update their compliance programs. Acting early not only helps avoid sanctions, it also strengthens one’s position in a global business environment increasingly defined by transparency, traceability, and corporate accountability in the fight against money laundering
AVP is a Mexican accounting, tax, and legal firm with more than 15 years of experience in consulting for all types of companies, private investors, and governmental entities. The firm specialises in providing a complete tax and legal structure to companies, as well as providing protection against possible contingencies, and analysing each situation from different disciplines.
XLNC member firm AVPMexico City, MexicoT: +52 55 2743 1687
Auditing & Accounting, Tax, Law Firm, Advisory, Corporate Finance, Fiduciary & Estate Planning
Francisco Vilchis Orea, legal partner at AVP Soluciones, is a graduate of the National Autonomous University of Mexico (UNAM), and holds a master's degree in administrative and fiscal law from the Faculty of the National Bar Association. He has also completed diploma courses in tax Update and criminal tax defence. Contact Francisco.
