It is a foreign entity subject to preferential tax regimes. Residents in Mexico and residents abroad with a permanent establishment in the country are required to pay tax on income subject to the regime that they obtain through foreign entities in which they participate, directly or indirectly, and exercise effective control over the foreign entity.

Article 176 defines when a foreign entity's income is subject to a preferential tax regime and establishes the criteria for effective control.
Effective control is considered to exist when any of the following conditions are met:

1. Average daily shareholding that grants:
More than 50% of the voting rights.
Veto right or favorable vote necessary for decisions.
More than 50% of the total value of the shares.

2. Right to assets or profits in the event of capital reduction or liquidation.
3. Sum of voting rights and asset rights exceeding 50%.
4. Consolidation of financial statements with the foreign entity.
5. Right to unilaterally determine decisions of meetings or management, including through an intermediary.

Furthermore, indirect effective control is considered if the taxpayer has control over intermediate entities that separate it from the final foreign entity.

The criteria for effective control are legal, economic, factual, and consolidation.