Mexico’s Ministry of Finance and Public Credit’s mission is direct the economic policy of the federal government in financial, tax, public spending and other matters. It’s goal is to foster economic growth.
For any international corporation or investor operating in Mexico, the Secretaría de Hacienda y Crédito Público (SHCP), or the Ministry of Finance and Public Credit of Mexico, is the single most important government institution shaping the business environment. This powerful cabinet-level ministry is the architect and manager of the nation’s entire economic and fiscal policy. Consequently, its decisions directly influence everything from a company’s tax obligations and access to capital to the overall stability and growth prospects of the Mexican economy.
The SHCP’s mandate is vast and profoundly impactful. It is responsible for designing the country’s tax laws and creating the federal budget. The agency also manages public debt and oversees the entire financial system. This includes banks, insurance companies, and the stock market. While a business may interact more frequently with its well-known sub-agency, the SAT, it is the SHCP that sets the overarching strategy and writes the rules of the game.
This guide provides a comprehensive overview of the SHCP. We designed it specifically for business owners, general managers, and financial directors. We will explore the Ministry’s core functions, detail the responsibilities of its key sub-agencies and financial regulators, and explain its central role in the national economy. Ultimately, a clear understanding of the SHCP is not only beneficial but also an essential component of strategic decision-making and long-term success in Mexico.
The Mexican Ministry of Finance and Public Credit (Spanish: Secretaría de Hacienda y Crédito Público, SHCP) is the finance ministry of Mexico. The Minister is the head of the department, and is a member of the federal executive cabinet. He is appointed by the President of the Republic, with the approval of the Chamber of Deputies.
| Founded | 1821 |
|---|---|
|
Minister |
Edgar Amador Zamora |
|
Dependents |
Tax Administration Service (SAT) National Banking & Securities Comision The Federal Treasury Financial Intelligence Unit The National Commission for the Retirement Savings System |
|
Jurisdiction |
Federal |
|
Reports to |
President |
The Mexican Ministry of Finance is one of the oldest and most powerful ministries in the Mexican federal government. Its primary mission is to propose, direct, and control the economic policy of the federal government in financial, fiscal, spending, revenue, and public debt matters. Its goal is to foster stable and equitable economic growth for the country.
To achieve this broad objective, the Mexican Ministry of Finance carries out several fundamental functions:
Designing Fiscal Policy: First and foremost, the SHCP is responsible for creating and managing the nation’s fiscal policy. This involves determining how the government will raise revenue. The ministry drafts the proposed tax laws. This includes the rates for Income Tax (ISR) and Value-Added Tax (IVA), which are then submitted to Congress for approval.
Managing the Federal Budget: The SHCP is the architect of the annual federal budget. It projects the government’s revenues for the upcoming year. It proposes the Presupuesto de Egresos de la Federación (Expenditure Budget), which allocates funds to all other ministries, federal programs, and state governments.
Overseeing Public Credit and Debt: The ministry manages all aspects of Mexico’s public debt. This includes issuing government bonds in both domestic and international markets, as well as managing the country’s relationships with credit rating agencies and international financial institutions, such as the IMF and the World Bank.
Regulating and Supervising the Financial System: The Mexican Ministry of Finance has ultimate oversight over the entire Mexican financial system. Through its various commissions, it sets the rules for and supervises the activities of banks, brokerage firms, insurance companies, and the national retirement savings system.
In essence, the SHCP functions as the Chief Financial Officer (CFO) for the entire country, managing both its income statement (taxes and spending) and its balance sheet (debt and public assets).
For most businesses, the most visible and frequent point of interaction with Mexico’s Ministry of Finance is through its most powerful sub-agency: the Servicio de Administración Tributaria (SAT), or the Tax Administration Service. While the SHCP sets tax policy, the SAT is the operational body responsible for enforcing that policy and collecting the revenue.
The SAT’s primary mandate is to ensure that individuals and corporations comply with their fiscal and customs obligations. It is responsible for the collection of all federal taxes, which form the vast majority of the government’s revenue.
One of the SAT’s most fundamental roles is to issue and manage the Registro Federal de Contribuyentes (RFC). This unique alphanumeric code is the tax identification number for every individual and legal entity in Mexico. Obtaining an RFC is the absolute first step for any new business, as it is required for virtually every formal economic activity, from opening a bank account to issuing an invoice.
The SAT has implemented a highly sophisticated and mandatory electronic invoicing system known as the Comprobante Fiscal Digital por Internet (CFDI). Every single business transaction must be documented with a CFDI, which is digitally stamped and registered with the SAT in real-time. This system gives the SAT unprecedented visibility into the economic activities of all taxpayers.
The SAT has extensive and powerful auditing capabilities. It uses advanced data analytics to cross-reference CFDI data, bank records, and tax declarations to identify discrepancies and potential tax evasion. It can conduct electronic and in-person audits and has the authority to issue significant fines and penalties for non-compliance.
In summary, while you will read about SHCP policies in the news, your accounting and finance teams will be dealing with the SAT on a daily basis.
[For a deeper dive, explore our full report: A Guide to the SAT: The Tax Administration Service]
Beyond the SAT, the Mexican Ministry of Finance oversees several other critical agencies that play important roles in the nation’s financial and legal systems.
The PFF functions as the legal arm of the Mexican Ministry of Finance. It is, in effect, the federal government’s tax attorney.
amparo suits brought against it. For businesses, any major tax dispute that escalates to the legal system will involve facing the highly specialized lawyers of the PFF.The TESOFE acts as the national treasury. It is the government body responsible for managing the cash flow of the federal government.
Mexico’s Ministry of Finance also oversees th Financial Inteligence Unit. The UIF is a critically important agency responsible for combating illicit financial activities. It is Mexico’s primary anti-money laundering (AML) and counter-terrorist financing (CTF) body.
Core Functions: The UIF receives, analyzes, and disseminates financial information to detect and prevent money laundering and other illicit financial operations. It requires financial institutions and certain other businesses (known as actividades vulnerables) to report suspicious transactions. The UIF then works with law enforcement agencies to investigate and prosecute these financial crimes. For any business, but especially those in the financial sector, compliance with UIF reporting requirements is a key part of their legal obligations
A core part of the Mexican Ministry of Finance’s mandate is to ensure the stability and proper functioning of the entire Mexican financial system. To achieve this, it oversees a set of powerful, specialized commissions that regulate specific sectors.
The CNBV is the primary regulator for the heart of the financial system. It is a powerful and respected institution with a broad supervisory mandate.
Jurisdiction: The CNBV regulates and supervises virtually all depository and investment institutions in Mexico. This includes all commercial banks, brokerage firms (casas de bolsa), investment funds, and the Mexican Stock Exchange (Bolsa Mexicana de Valores).
Key Functions: The CNBV is responsible for authorizing the creation of new financial institutions, setting capital reserve and liquidity requirements for banks, and creating the rules that govern the securities market. It also has extensive powers to conduct inspections and sanction institutions that violate financial regulations.
The CNSF is the specialized regulator for the insurance and surety bond industries. Mexico’s Ministry of Finance gives it the mandate toregulate the insurance and bonding industry.
Jurisdiction: The CNSF authorizes, regulates, and supervises all insurance companies and afianzadoras (surety bond companies) operating in Mexico.
Key Functions: It ensures that these companies have sufficient financial reserves to cover their obligations to policyholders. It also approves all new insurance products before they can be offered to the public and handles consumer complaints against insurance providers.
CONSAR is the government body responsible for regulating Mexico’s private pension fund system.
Jurisdiction: All formal sector employees in Mexico have a portion of their salary contributed to a private retirement account, which is managed by an Administradora de Fondos para el Retiro (AFORE). CONSAR regulates all of these AFOREs.
Key Functions: It sets the investment rules for the AFOREs to ensure the security of workers’ retirement savings. It also supervises their operations and sets the commission fees they are allowed to charge. For employers, while the direct interaction is with the IMSS for making contributions, it is CONSAR that regulates the system where those funds are ultimately managed.
The Mexican Ministry of Finance and Public Credit is unquestionably one of the most powerful and influential ministries in Mexico. As the architect of the nation’s economic and fiscal policy, its decisions have a direct and profound impact on every business operating in the country. From the taxes you pay to the regulations governing your banking relationships and employee pension funds, the authority of the SHCP is pervasive.
For a foreign company, a clear understanding of this ministry and its constellation of powerful sub-agencies—from the omnipresent SAT to the crucial financial regulators like the CNBV and CONSAR—is not optional. It is a fundamental requirement for strategic planning, risk management, and legal compliance.
Navigating this complex financial and fiscal landscape requires deep institutional knowledge and expert local guidance. At Start-Ops, we specialize in helping companies manage these intricate obligations. We provide expert guidance and administrative support to ensure your company is fully compliant with all relevant regulations from Mexico’s Ministry of Finance and SAT from day one. We handle the complexity of Mexico’s fiscal framework so you can focus on your core business: building a successful and profitable operation.
Contact us for a strategic consultation to explore how we can help you navigate Mexico’s financial and tax systems with confidence and security.