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Mexico Fund Inc, et al. – ‘486BPOS’ on 2/28/14

On:  Friday, 2/28/14, at 3:50pm ET   ·   Effective:  2/28/14   ·   Accession #:  1193125-14-77214   ·   File #s:  811-02409, 333-187869

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/28/14  Mexico Fund Inc                   486BPOS     2/28/14    3:823K                                   RR Donnelley/FA
          Mexico Fund Inc

Document/Exhibit                   Description                      Pages   Size 

 1: 486BPOS     Post-Effective Amendment to an N-2                  HTML    617K 
 2: EX-99.L     Opinion and Consent of Dechert                      HTML      8K 
 3: EX-99.N     Consent of Pricewaterhousecoopers                   HTML      5K 

Table of Contents

As filed with the Securities and Exchange Commission on February 28, 2014

1933 Act File No. 333- 187869

1940 Act File No. 811- 02409

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-2

x  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

¨ Pre-Effective Amendment No.

x Post-Effective Amendment No. 2

and

x  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY OF 1940

Amendment No. 58

THE MEXICO FUND, INC.

(Exact Name of Registrant as Specified in Charter)

1900 K Street, NW

Washington, DC 20006

(Address of Principal Executive Offices)

(202) 261-7941

(Registrant’s Telephone Number, including Area Code)

José Luis Gómez Pimienta

President

The Mexico Fund, Inc.

1900 K Street, NW

Washington, DC 20006

(Name and Address of Agent for Service)

Copies of Communications to:

Sander M. Bieber, Esq.

Dechert LLP

1900 K Street, NW

Washington, DC 20006

Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this form are offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box.  x

It is proposed that this filing will become effective:

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such dates as the Commission, acting pursuant to said Section 8(a), may determine.

Table of Contents

THE MEXICO FUND, INC.

CROSS REFERENCE SHEET

BETWEEN ITEMS OF REGISTRATION STATEMENT (FORM N-2) AND

PROSPECTUS PURSUANT TO RULE 495(A)

PART C OF REGISTRATION STATEMENT

Information required to be included in Part C is set forth under the appropriate item, so numbered in Part C to this Registration Statement.

Table of Contents

BASE PROSPECTUS — February 28, 2014

4,100,000 Shares

The Mexico Fund, Inc. (the “Fund”)

Shares of Common Stock

The Fund is a non-diversified, closed-end management investment company whose primary investment objective is long-term capital appreciation through investment in securities, primarily equity, listed on the Bolsa Mexicana de Valores, S.A. de C.V. (the “Mexican Stock Exchange” or “Bolsa”). See “Investment objective and policies” and “Investment restrictions” in this prospectus.

The net asset value per share of the Fund’s common stock at the close of business on February 27, 2014 (the last trading date prior to the date of this prospectus on which the Fund determined its net asset value) was $25.83 and the last reported sale price of a share on the New York Stock Exchange (“NYSE”) on that day was $26.05.

The Fund may offer, from time to time, in one or more offerings, its shares of common stock, par value $1.00 per share (“Shares”). Shares may be offered at prices and on terms to be set forth in one or more supplements to this Prospectus (each, a “Prospectus Supplement”). You should read this Prospectus and the applicable Prospectus Supplement carefully before you invest in Shares.

Shares may be offered directly to one or more purchasers, through agents designated from time to time by the Fund, or to or through underwriters or dealers. The Prospectus Supplement relating to the offering will identify any agents or underwriters involved in the sale of the Shares, and will set forth any applicable purchase price, fee, commission or discount arrangement between the Fund and its agents or underwriters, or among our underwriters, or the basis upon which such amount may be calculated. The Fund may not sell any of the Shares through agents, underwriters or dealers without delivery of a Prospectus Supplement describing the method and terms of the particular offering of the Shares.

This prospectus, together with the Prospectus Supplement, sets forth concisely the information about the Fund that a prospective investor ought to know before investing and should be retained for future reference. Stockholders may obtain additional information about the Fund from the Fund’s reports filed with the Securities and Exchange Commission (the “SEC”). You may obtain a copy of the Fund’s reports filed with the SEC by contacting Mr. Eduardo Solano, the Fund’s Investor Relations Vice President, at (+ 52 55) 5282-8900, during Mexico City business hours (10:00 a.m. to 3:00 p.m. and 5:00 to 7:00 p.m. ET) between the hours of 9:00 a.m. and 5:00 p.m. New York City time, Monday-Friday (except holidays). The Fund also makes its reports available free of charge on the Fund’s website at www.themexicofund.com under “Investor Reports.” In addition, the reports filed with the SEC, including material incorporated by reference into this prospectus and the Prospectus Supplement, are available at the SEC’s website at www.sec.gov.

Investors are advised to read this prospectus and the Prospectus Supplement and retain both for future reference.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or the Prospectus Supplement is truthful or complete. Any representation to the contrary is a criminal offense.

Unless otherwise indicated, U.S. dollar equivalent information in the prospectus and Prospectus Supplement for the peso as of a specified date is based on the open market exchange rate prevailing in Mexico City published by Bloomberg. On February 27, 2014, the exchange rate was 13.26 Mexican pesos per one U.S. dollar, and the daily calculation of the Fund’s net asset value, expressed in dollar terms, are determined by using this exchange rate.

Prospectus dated February 28, 2014

Table of Contents

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by reference to the more detailed information appearing elsewhere or incorporated by reference in this prospectus and any related Prospectus Supplement. It may not contain all of the information that is important to each stockholder. Accordingly, to understand the offer fully, stockholders are encouraged to read the entire document carefully.

THE OFFER AT A GLANCE

Purpose of the offer

The Board of Directors of the Fund (“Board” or “Board of Directors”) and Impulsora del Fondo Mexico, S.C., the Fund’s investment adviser (the “Investment Adviser”) have determined that it would be in the best interest of the Fund and its stockholders to increase the assets of the Fund available for investment, thereby enabling the Fund to more fully take advantage of available investment opportunities arising as a result of continued positive developments in Mexico and the Mexican securities market and consistent with the Fund’s investment objective of long-term capital appreciation and in accordance with its efforts to seek out and invest in attractive growth oriented businesses including but not limited to small and medium capitalization companies.

The Board and the Investment Adviser also believe that an increase in the size of the Fund may result in a modest reduction in the Fund’s expense ratio. There can be no assurance that the offer will be successful or that by increasing the size of the Fund, the Fund’s aggregate expenses and, correspondingly, its expense ratio, will be lowered. See “The offer— Purpose of the offer.”

The offer

The Fund may offer, from time to time, in one or more offerings, up to 4,100,000 Shares on terms to be determined at the time of the offering. The Shares may be offered at prices and on terms to be set forth in one or more Prospectus Supplements. The offering price of the Shares will not be less than the sum of the Fund’s net asset value at the time the Fund makes the offering plus the per share commission or underwriting discount. You should read this Prospectus and the applicable Prospectus Supplement carefully before you invest in the Shares. The Shares may be offered directly to one or more purchasers, through agents designated from time to time by us, or to or through underwriters or dealers. The Prospectus Supplement relating to the offering will identify any agents, underwriters or dealers involved in the sale of the Shares, and will set forth any applicable purchase price, fee, commission or discount arrangement between the Fund and its agents or underwriters, or among the Fund’s underwriters, or the basis upon which such amount may be calculated. The Fund may not sell any of the Shares through agents, underwriters or dealers without delivery of a Prospectus Supplement describing the method and terms of the particular offering of our Shares.

Use of proceeds

The Fund intends to use the net proceeds from the sale of Shares primarily to invest in accordance with its investment objective and policies. Proceeds will be invested within approximately 60 days of receipt by the Fund, depending on market conditions and the availability of appropriate investment opportunities. See “Use of proceeds.”

THE FUND AT A GLANCE

The Fund

The Fund is a non-diversified, closed-end management investment company organized as a Maryland corporation. As of February 27, 2014 (the last trading date prior to the date of this prospectus on which the Fund determined its NAV), the Fund’s NAV per Share was $25.83 and the last reported sale price of a share on the NYSE was $26.05. See “The Fund.”

NYSE listed

As of December 31, 2013, the Fund had 14,298,699 Shares of common stock outstanding. The Fund’s common stock is traded on the NYSE under the symbol “MXF.” See “The Fund—Description of common stock.”

Investment objective

The Fund’s investment objective is to seek long-term capital appreciation through investment in securities, primarily equity, listed on the Mexican Stock Exchange.

No assurance can be given that the Fund’s investment objective will be achieved. See “Investment objective and policies.”

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Investment policies

For as long as the name of the Fund remains The Mexico Fund, Inc., it shall be the non-fundamental policy of the Fund to generally invest at least 80% of its total assets in equity securities listed on the Mexican Stock Exchange, but may reduce its holdings in equity securities listed on the Mexican Stock Exchange below 80% of its total assets for temporary defensive purposes when unusual market or economic conditions occur. This investment policy is a non-fundamental policy which may be changed by the Board of Directors upon 60 days’ prior written notice to Stockholders.

The Fund is a non-diversified fund for purposes of the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund has also adopted a policy which permits the Fund to concentrate (i.e., over 25% of the Fund’s total assets) in investments in a particular industry or group of industries based on the representation of that industry or group of industries on a relevant Mexican stock index.

The Fund may invest in Mexican fixed-income securities, bank time deposits of Mexican banks, and short-term repurchase agreements, all of which are peso-denominated and may be dollar-linked (i.e., paid in pesos but with repayment linked to a dollar exchange rate), in order to provide appropriate liquidity to take advantage of market opportunities and meet cash requirements. The Fund may also invest in dollar-denominated deposits and dollar-denominated investments such as U.S. Treasuries, U.S. Agency Securities, Agency Mortgage Backed Securities and Mexican Sovereign Debt. As market or other conditions require, the proportion of the Fund’s assets held in fixed-income securities or bank time deposits may vary. The Fund will not realize capital gains for the sole purpose of making distributions to stockholders. See “Investment objective and policies.”

Managed Distribution Plan and Other Discount Reduction Efforts

On August 12, 2008, the Fund received an exemptive order (the “Order”) from the Securities and Exchange Commission (“SEC”) under Section 19(b) of the Investment Company Act of 1940, as amended, which permits the Fund to distribute long-term capital gains to stockholders more than once per year. Following receipt of the Order, the Board of Directors approved the implementation of a Managed Distribution Plan (“MDP”) to make quarterly cash distributions to stockholders, pursuant to which the Fund currently pays quarterly distributions at an annual rate of 10% of the Fund’s NAV per share recorded on the last business day of the previous calendar year.

The Fund is subject to a number of conditions under the Order, among them that the Fund may not make any public offering of the Fund’s Shares other than (A) a rights offering below NAV to holders of the Fund’s common stock; (B) an offering in connection with a dividend reinvestment plan, merger, consolidation, acquisition, spin-off or reorganization of the Fund; or (C) an offering other than an offering described in conditions (A) and (B) above, unless, with respect to such other offering: (1) the Fund’s annual distribution rate for the six months ending on the last day of the month ended immediately prior to the declaration date of the most recent distribution is no more than one percentage point greater than the Fund’s average annual total return for the five-year period ending on such date; and (2) the transmittal letter accompanying any registration statement filed with the SEC in connection with such offering discloses that the Fund has received an order under Section 19(b) to permit it to make periodic distributions of long-term capital gains with respect to its common stock as frequently as twelve times each year. As of the date of this prospectus, the Fund is in compliance with all conditions of the Order, including the aforementioned condition relating to public offerings. However, circumstances may arise in the future which would prevent this condition from being met, and which could therefore prevent the Fund from issuing Shares.

In addition to the MDP, the Fund continues to maintain and implement as part of its ongoing discount reduction efforts the following strategies: (i) an open market share repurchase policy and (ii) the monthly publication of the Fund’s portfolio of investments. See “Dividends and Capital Gain Distributions” and “Discount Reduction Efforts.”

Investment Adviser

Impulsora del Fondo México, S.C. has acted as the Fund’s Investment Adviser since the Fund’s establishment in 1981. See “Advisory Agreement.”

The Investment Adviser also provides other fund services to the Fund pursuant to an Amended and Restated Fund Services Agreement, amended and restated as of December 6, 2011. See “Fund Services Agreement.”

Compensation of the Investment Adviser

The Fund pays the Investment Adviser a fee at the annual rate of 1.00% of the Fund’s average daily net assets up to and including $200 million, 0.90% of such assets between $200 million and $400 million, and 0.60% of such assets in excess of $400 million, computed based upon the average daily value of the net assets of the Fund and payable within fifteen days after the end of each calendar month. See “Advisory Agreement.”

The Investment Adviser will benefit from the offer because its fees are based on the average net asset value applicable to Shares of the Fund.

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The Fund also pays Impulsora a fee for other fund services, computed at the end of each calendar month on the basis of the average daily value of the net assets of the Fund (as translated into U.S. dollars) for such month, at the annual rate of 0.11% of average daily net assets on assets under management up to $600 million, and at the annual rate of 0.09% of average daily net assets on assets under management above $600 million. The fee will not be lower than the annual amount of $450,000. The fee is payable within fifteen days after the end of each calendar month. See “Fund Services agreement.”

Custodian

The Fund maintains securities listed on the Mexican Stock Exchange in the book-entry system of Indeval, the Mexican central securities depository. BBVA Bancomer, SA acts as the Fund’s custodian for all Fund assets held in Mexico. Comerica Bank is the custodian for all assets held in the United States.

Transfer agent, dividend-paying agent and registrar

American Stock Transfer & Trust Company acts as the Fund’s dividend-paying agent and as transfer agent and registrar for the Fund’s common stock and Distribution Reinvestment and Stock Purchase Plan.

RISK FACTORS AND SPECIAL CONSIDERATIONS AT A GLANCE

Certain matters that you should consider, among others, in connection with the offer are summarized below. For a more complete discussion of the risk factors and special considerations involved in investing in the Fund’s shares, see “Risk factors and special considerations.”

Foreign investments generally

Foreign investments may involve certain considerations and risks not typically associated with domestic investments as a result of, among others, the possibility of political and economic developments and the level of governmental supervision and regulation of foreign securities markets. In addition, certain foreign markets may be substantially more volatile than the major markets of the United States due to, among other things, the following factors: comparatively unstable political, social and economic conditions, and limited or ineffectual judicial systems; comparatively small market sizes, making securities less liquid and securities prices more sensitive to the movements of large investors and more vulnerable to manipulation; governmental policies or actions, such as high taxes, restrictions on currency movements, trade or diplomatic disputes, creation of monopolies, and the seizure of private property through confiscatory taxation and expropriation or nationalization of company assets; incomplete, outdated, or unreliable information about securities issuers due to less stringent market regulation and accounting standards; comparatively undeveloped markets and weak banking and financial systems; regulatory policies or actions; market inefficiencies, such as higher transaction costs, and administrative difficulties, such as delays in processing transactions; and fluctuations in foreign currency exchange rates, which could reduce gains or widen losses. In addition, foreign taxes could reduce the income available to distribute to shareholders, and special U.S. tax considerations could apply to foreign investments.

Mexico is considered to be an emerging market country. Foreign investment risks typically are greater in emerging markets than in developed markets, for such reasons as social or political unrest, heavy economic dependence on agriculture or exports (particularly commodities), undeveloped or overburdened infrastructures, vulnerability to natural disasters, significant and unpredictable government intervention in markets or the economy, currency devaluations, runaway inflation, environmental problems, and business practices that depart from norms for developed countries and less developed or liquid markets for securities generally.

Reduced market liquidity, as compared to U.S. markets, may also have an adverse effect on market price and the Fund’s ability to dispose of particular instruments when necessary and may make it more difficult for the Fund to obtain accurate market quotations of portfolio securities for valuing the Fund’s portfolio and calculating its net asset value. See “Risk factors and special considerations— Foreign investments generally.”

Investment in Mexican securities

Investing in Mexican securities involves certain considerations not typically associated with investing in securities of U.S. issuers, including (1) less liquidity and smaller market capitalization; (2) greater currency fluctuations; (3) higher rates of inflation and domestic interest rates; and (4) less stringent disclosure requirements, less available information regarding Mexican public companies and less active regulatory oversight of Mexican public companies.

The Mexican securities market is not as large or as active as the securities markets in the United States. As of January 31, 2014, the Mexican equity market capitalization was approximately $530 billion compared to the approximately $23 trillion equity market capitalization of NYSE-listed equity securities. Generally, the Mexican securities market is characterized by a relatively small number of actively traded issuers and high price volatility. This may affect the rate at which the Fund is able to invest in listed Mexican securities, the purchase and sale prices for such securities and the timing of conversions, purchases and sales.

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There is less publicly available information about the issuers of certain Mexican securities than is regularly published by issuers in the United States, although some Mexican companies whose shares trade in U.S. markets comply with U.S. regulations. Further, financial statements and reported earnings of Mexican companies incorporate the effects of inflation and differ from those of U.S. companies in this respect as well as others. Also, there is generally less government supervision and regulation of exchanges, brokers and issuers in Mexico than there is in the United States. Mexican corporate laws regarding fiduciary responsibility and protection of stockholders are less developed than those in the United States.

The Fund is also subject to the risk of political and economic instability with respect to its investments in Mexico. Enrique Peña Nieto took office as the President of Mexico on December 1, 2012. Shortly thereafter, Mr. Peña Nieto and leaders of the three largest political parties signed the Pact for Mexico, in which they outlined a reform agenda and strategy for the next six years. Mr. Peña Nieto, a member of the Institutional Revolutionary Party (“PRI”) ended a 12-year period during which the National Action Party (“PAN”) held presidential office. Under the new Administration, Mexican Congress has approved the Labor, Public Sector Accounting, Competitiveness Law, Education, Telecommunication, Political, Fiscal and Financial Reforms, which are expected to result in greater flexibility to create jobs, greater transparency, enhanced competition terms and conditions, higher quality teachers, greater competition in the telecommunications sector, re-election of Congress members, higher tax collection and credit penetration, respectively, among other benefits. In addition, the Mexican Congress recently approved the Energy Reform, which is the most important economic reform, because of its potential growth, since the North American Free Trade Agreement (NAFTA) was signed in 1994. Several constitutional changes were implemented to allow private sector investments in areas that were reserved exclusively to Petróleos Mexicanos (Pemex), the Mexican state-owned oil company, for the past 75 years. The Energy Reform is expected to reverse eight years of declining oil production and place Mexico within the world’s top five crude oil exporting countries. All these structural reforms are expected to boost Mexico’s economic growth in the medium- and long-term. However, the Investment Adviser cannot be assured that the Mexican political environment will be free of instability in the future. See “Risk factors and special considerations—Risks involved in Mexican investments.”

Risk also exists in regards to the security situation in Mexico and the possibility that government expenditures required to combat the violence may divert resources away from other productive uses, such as economic development and related initiatives. The Fund’s Investment Adviser believes that Mexico’s prevailing stable economic environment, as well as the generally positive performance of Mexican listed companies and financial markets, are indicators that investors in Mexico are decoupling the security situation from their investment decisions, and that with the exception of the impact in a few tourist destinations, the security situation has not significantly affected the Mexican economy and financial markets. However, the Investment Adviser cannot state that this will continue to be the case in the future. See “Risk factors and special considerations—Security in Mexico.”

Currency exchange rate fluctuations

The Fund is subject to the risk of a decline in the value of the peso against the U.S. dollar. Because almost all of the securities in the Fund’s portfolio are quoted in pesos, these securities must increase in value at a rate in excess of any rate of decline of the peso against the U.S. dollar in order to avoid a decline in their equivalent U.S. dollar value. Accordingly, a future decline in the value of the peso against the U.S. dollar may result in a corresponding decline in the value of the securities held by the Fund that are denominated in pesos. Adverse developments in the political environment mentioned above could create further fluctuations in the valuation of the peso against the U.S. dollar. The peso has been subject to significant devaluations in the past, although not in the recent past, and there can be no assurance that similar devaluations will not take place in the future. The Fund does not generally hedge against a decline in the value of the peso. Thus, any decline in the value of the peso may have a direct negative impact on the valuation of the Fund’s securities. See “Risk factors and special considerations—Currency exchange rate fluctuations.”

Discount from net asset value

The Fund’s Shares have historically traded in the market at a price which is below the Fund’s NAV. This characteristic of shares of closed-end investment companies is a risk separate and distinct from the risk that the Fund’s NAV will decrease. In the 12-month period ended January 31, 2014, the Fund’s Shares traded in the market at an average premium to NAV of 3.25%. Since January 18, 2013, the Fund began trading at a premium. As of February 27, 2014, the premium was 0.85%. See “Risk factors and special considerations—Net asset value discount.”

Investments in U.S. dollar-denominated instruments

The Fund may invest in dollar-denominated investments such as U.S. Treasuries, U.S. Agency Securities, Agency Mortgage Backed Securities and Mexican Sovereign Debt. Regarding certain U.S. federal agency securities or government sponsored-entity securities (such as debt securities or mortgage-backed securities issued by Freddie Mac, Fannie Mae, Federal Home Loan Banks, and other government-sponsored entities), although the issuer may be chartered or sponsored by Acts of Congress, the issuer is not funded by congressional appropriations and its securities are neither issued nor guaranteed by the United States Treasury. The U.S. government may not provide financial support to U.S. government agencies, instrumentalities or sponsored enterprises if it is not obligated to do so by law. See “Risk factors and special considerations—Dollar-denominated investments risk.”

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Foreign custody

Investment companies generally hold foreign securities and cash in foreign banks and securities depositories, and regulatory oversight over such entities may be limited. The laws of certain countries may put limits on a fund’s ability to recover its assets if a foreign bank, depository or issuer of a security, or any of their agents, goes bankrupt. In addition, it is often more expensive for a fund to buy, sell and hold securities in certain foreign markets than in the United States.

BBVA Bancomer, SA (“Bancomer”), acts as the Fund’s custodian, and S.D. Indeval, S.A. de C.V. (“Indeval”) acts as a securities depository for securities or equivalent book-entries in Mexico. It is the Investment Adviser’s view that Bancomer and Indeval are stable financial institutions unlikely to be subject to the risks described herein. In addition, the Board of Directors reviews and evaluates the Fund’s foreign custody arrangements on an annual basis. See “Risk factors and special considerations—Foreign custody.”

Non-diversified status

The Fund is classified as a “non-diversified” management investment company under the 1940 Act, which means that the Fund is not limited by the 1940 Act as to the proportion of its assets that may be invested in the securities of a single issuer. As a non-diversified investment company, the Fund may invest a greater proportion of its assets in common stock of a smaller number of issuers and, as a result, will be subject to greater risk with respect to its portfolio securities. Although the Fund must diversify its holdings in order to be treated as a regulated investment company under the provisions of the Internal Revenue Code of 1986, as amended (“Code”), the Fund may be more susceptible to any single economic, political or regulatory occurrence than would be the case if it had elected to diversify its holdings sufficiently to be classified as a “diversified” management investment company under the 1940 Act. See “Risk factors and special considerations—Non-diversified status.”

Tax considerations

A portion of the Fund’s net assets is comprised of unrealized capital gains due to the investment performance of many of the Fund’s portfolio holdings over the last several years. Such gains, when realized and distributed, will become taxable to stockholders. Furthermore, there can be no assurance that the investment performance giving rise to such unrealized gains will continue, or that such gains will, in fact, be realized.

Value-added, withholding and/or other taxes may apply to the Fund and its investments, which will reduce the Fund’s return. The Fund intends to elect, when eligible, to “pass-through” to the Fund’s Stockholders, as a deduction or credit, the amount of foreign income and similar taxes paid by the Fund. See “Risk factors and special considerations—Tax considerations.”

Concentration risk

The Mexican Stock Exchange is a concentrated market. A large percentage of the value of the Mexican securities market is currently represented by certain industry sectors, in particular, the communications industry. Also, a Mexican individual, Mr. Carlos Slim Helú, has a controlling interest in companies representing over 19.60% of the market capitalization of the Mexican Stock Exchange. The value of the Mexican Stock Exchange may be subject to greater volatility than markets that are less concentrated. Any factors or events which impact Mr. Slim could have negative repercussions for the issuers in which he holds a controlling interest and the Mexican Stock Exchange as a whole.

The Fund has adopted a concentration policy which permits it to concentrate its investments in any industry or group of industries of the Mexican Stock Exchange Index (or any successor or comparable index, as determined by the Board of Directors to be an appropriate measure of the Mexican market) if, at the time of investment, such industry represents 20% or more of the Index; provided, however, that the Fund will not exceed the Index concentration by more than 5%. Because the Fund’s investments may be concentrated from time to time in certain industries, the value of the Fund may be subject to greater volatility than a fund with a portfolio that is less concentrated. If securities of a particular industry in which the Fund has concentrated fall out of favor, the Fund could underperform against other funds with greater industry diversification. To the extent the Fund concentrates its investments in certain industries in accordance with its concentration policy or is invested in companies which Mr. Slim controls, the Fund will be more susceptible to effects caused by changes in the economic climate, overall market volatility, or regulatory environment which impact these industries and any factors or events affecting Mr. Slim. See “Risk factors and special considerations— Concentration risk.”

Anti-takeover provisions

The Fund has provisions in its charter (“Charter”) and bylaws (“Bylaws”) that could have the effect of limiting the ability of other entities or persons to acquire control of the Fund. The Bylaws provide for a staggered election of Directors, with such Directors divided into three classes, each serving for a term of three years and until their successors are duly elected and qualify. Accordingly, unless removed by Stockholders between annual meetings, only those Directors in one class may be changed in any one year, and it

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would require two years to change a majority of the Board of Directors. The Bylaws also contain certain qualifications for nominees for Director positions and establish certain Board and/or Stockholder supermajority approval requirements for certain corporate actions. This system of electing Directors may be regarded as having an anti-takeover effect, and may have the effect of maintaining the continuity of management and thus may make it more difficult for the Fund’s Stockholders to change the majority of Directors.

The Charter of the Fund contains certain provisions that limit the ability of Stockholders to remove Directors, provides that the number of Directors may be fixed only by the Board, provides that certain vacancies on the Board of Directors may be filled only by the vote of the remaining Directors, and limits the ability of Stockholders to call a special meeting of Stockholders. See “Capital stock—Certain provisions of the Maryland General Corporation Law, the Charter and Bylaws.”

Market disruption

Instability in the Middle East and North Africa, such as in Tunisia, Egypt, Iran and Bahrain, and terrorist attacks in the United States and around the world have had a substantial impact on the U.S. and world economies and securities markets. The nature, scope and duration of the occupation cannot be predicted with any certainty. Terrorist attacks closed some of the U.S. securities markets in 2001, political instability closed the Cairo Stock Exchange in January 2011, and similar events in various jurisdictions cannot be ruled out in the future. War and occupation, political instability, terrorism and related geopolitical risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets generally. There may also be interruptions in the market beyond the Fund’s control caused by natural disasters, such as weather-related emergencies. These risks may adversely affect individual issuers and securities markets, interest rates, secondary trading, ratings, investor psychology, credit risk, inflation and other factors relating to the Shares and the investments made by the Fund. See “Risk factors and special considerations—Market disruption.”

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FUND EXPENSES

Hypothetical example

An investor would directly or indirectly pay the following expenses on a $1,000 investment in the Fund, assuming a 5% annual return:

This hypothetical example assumes that all dividends and other distributions are reinvested at NAV and that the percentage amounts listed under “Annual expenses” above remain the same in the years shown. The above tables and the assumption in the hypothetical example of a 5% annual return are required by regulation of the SEC applicable to all investment companies; the assumed 5% annual return is not a prediction of, and does not represent, the projected or actual performance of the Fund’s Shares. For more complete descriptions of certain of the Fund’s costs and expenses, see “Management of the Fund,” “Advisory Agreement” and “Fund Services agreement.”

The hypothetical example should not be considered a representation of future expenses or rate of return and actual Fund expenses may be greater or less than those shown.

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FINANCIAL HIGHLIGHTS

The financial highlights information for the years ended October 31, 2013, 2012, 2011, 2010 and 2009 have been derived from the Fund’s financial statements, audited by PricewaterhouseCoopers LLP, whose report, along with the Fund’s financial statements, are incorporated by reference in this prospectus. The financial highlights information for the years ended prior to October 31, 2009 are derived from the Fund’s audited financial statements that are not included or incorporated by reference in this prospectus.

The Mexico Fund, Inc.

Financial Highlights

*                 Amounts were computed based on average shares outstanding during the period.

**               Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the last business day of each year reported. Dividends and distributions, if any, are assumed to be reinvested in accordance with the Fund’s Distribution Reinvestment and Stock Purchase Plan.

***             Net of expense reimbursement representing 0.02%.

****           Represents payment made to the Fund by a Fund Director for profits realized by the Fund Director on sales of Fund shares made within a period of less than six months from purchase.

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Note: Contained above is operating performance for a Share of common stock outstanding, total investment return, ratios to average net assets of Stockholders and other supplemental data for each of the years indicated. This information has been determined based upon financial information provided in the financial statements and market value data for the Fund’s Shares.

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THE OFFER

Purpose of the offer

The Board of Directors and the Investment Adviser have determined that it would be in the best interest of the Fund and its Stockholders to increase the assets of the Fund available for investment. In connection with the Board’s consideration of any potential offer, the Investment Adviser will present information regarding recent and future developments in the Mexican securities market. Proceeds from any potential offer would allow the Fund to capitalize further on the continued expansion and positive returns of the Mexican Stock Exchange without the disposition of current favorable investments.

An increase in the assets of the Fund available for investment would enable the Fund to more fully take advantage of available investment opportunities arising as a result of any continuing positive developments in Mexico and the Mexican securities market. Due to what the Investment Adviser believes to be a combination of positive economic, regulatory and securities market developments in an environment of prolonged economic stability, the Fund’s Board and the Investment Adviser believe that the next several years may present an opportune time to raise assets for investment in companies listed on the Mexican Stock Exchange.

In recent years, inflation, interest rates and foreign exchange rates in Mexico have remained comparatively stable while Mexico has at the same time experienced modest gross domestic product (GDP) growth. Moreover, the investment grade rating on Mexican government securities appears to reflect an increase in the perceived creditworthiness of the Mexican government. The Investment Adviser believes that this stabilization of the Mexican economy, along with expected positive results from the approved reforms of the current administration and the significant international expansion of several Mexican companies have been important drivers of economic and investment performance in Mexico.

Furthermore, the Investment Adviser believes that stock valuations remain at high levels relative to developed U.S., European and Asian economies. As a consequence of improved political, economic and structural market dynamics, global assets invested in Latin America have continued to increase as a percentage of overall equity investment. Moreover, in recent months international investors have perceived Mexico as an attractive and safe destination for investments, given its solid macroeconomic environment, which includes, among other factors, controlled inflation, healthy public sector finances, steady economic growth near 3% per year, fairly valued currency and balanced external accounts. These factors contrast with the difficult economic environment currently prevailing in Europe and the United States. The valuation of Mexican listed companies presenting attractive growth rates, low leverage levels and strong corporate governance practices have been favored by investors. In 2013, Mexican corporations and Real Estate Investment Trusts (REIT’s) raised approximately $12 billion in nine IPO’s and eight follow-on offerings. This compares favorably with the previous three twelve-month periods when the equity raised by Mexican listed companies averaged $450 million per year.

The Fund’s Board of Directors and the Investment Adviser believe that increasing Fund assets available for investment should result in a modest lowering of the Fund’s expenses as a percentage of average net assets because fixed costs of the Fund can be spread over a larger asset base, although such expense reductions cannot be guaranteed.

USE OF PROCEEDS

The Fund anticipates that it will be able to invest substantially all of the net proceeds of an offering in accordance with its investment objectives and policies within approximately 60 days after receipt by the Fund, depending on market conditions and the availability of appropriate securities. Pending such investment, the Fund anticipates investing the proceeds in high-quality, short-term repurchase agreements collateralized with obligations of the Mexican federal government. The Fund invests in an emerging market whose liquidity may delay the investment of the proceeds in a manner consistent with the Fund’s investment objective. See “The offer—Purpose of the offer,” “Investment objective and policies” and “Investment restrictions.”

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THE FUND

The Fund is a non-diversified, closed-end management investment company registered under the 1940 Act. The Fund was incorporated under the laws of the State of Maryland on January 13, 1981 and was the first publicly offered United States registered investment company organized to invest primarily in Mexican equity securities listed on the Bolsa. The Fund’s investment objective is long-term capital appreciation through investment in securities, primarily equity, listed on the Mexican Stock Exchange. No assurance can be given that the Fund’s investment objective will be achieved.

Description of common stock

The Fund is authorized to issue 150,000,000 Shares. Each Share has equal voting, dividend, distribution and liquidation rights. The Shares outstanding are, and the Shares offered hereby, when issued will be, fully paid and non-assessable. Shares are not redeemable and have no preemptive rights, conversion rights, cumulative voting rights, or (except with respect to appraisal rights arising in connection with the Maryland Control Share Acquisition Act discussed below), appraisal rights.

The number of Shares outstanding as of January 31, 2014 was 14,700,450.

The Fund’s Shares are publicly held and are listed and traded on the NYSE. The following table sets forth for the quarters indicated the highest and lowest daily intraday prices on the NYSE per Share, the highest and lowest closing NAV per Share and the highest and lowest registered discount from NAV per Share. The table also sets forth the number of Shares traded on the NYSE during the respective quarter.

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At the close of business on February 27, 2014, the NAV per Share was $25.83 and the last reported sale price of a Share on the NYSE was $26.05, representing a 0.85% premium from such NAV.

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INVESTMENT OBJECTIVE AND POLICIES

Investment objective

The Fund’s investment objective is long-term capital appreciation through investment in securities, primarily equity, listed on the Mexican Stock Exchange. The Fund’s investment objective may not be changed without the approval of the holders of a majority of the outstanding Shares. A majority vote, as defined by the 1940 Act, means the affirmative vote of the lesser of (i) 67% of the relevant Shares represented at a meeting at which more than 50% of such Shares are represented or (ii) more than 50% of the relevant Shares.

Investment policies

Generally

To achieve its investment objective, the Fund will generally invest at least 80% of its total assets in equity securities listed on the Mexican Stock Exchange, but may reduce its holdings in equity securities listed on the Mexican Stock Exchange below 80% of its total assets for temporary defensive purposes when unusual market or economic conditions occur. This investment policy is a non-fundamental policy which may be changed by the Board of Directors upon 60 days’ prior written notice to Stockholders.

The Fund may also invest in fixed-income securities and bank time deposits of Mexican banks, all of which are peso-denominated and may be dollar-linked (i.e., paid in pesos but with repayment linked to a dollar exchange rate), in order to provide appropriate liquidity to take advantage of market opportunities and meet cash requirements. The Fund may also invest in dollar-denominated deposits and dollar-denominated investments such as U.S. Treasuries, U.S. Agency securities, Agency Mortgage-Backed Securities and Mexican Sovereign Debt. As market or other conditions require, the proportion of the Fund’s assets held in fixed-income securities or bank time deposits may vary. The Fund will not realize capital gains for the sole purpose of making distributions to Stockholders.

The Fund’s assets are diversified over a broad spectrum of the Mexican economy. Industries in which the Fund currently invests include cement, communications, construction, financial groups, food and beverages, mining, consumer products, retail stores, real estate investment trusts, chemical and petrochemical products, and services.

Concentration policy

The Fund has adopted a fundamental policy which permits it to concentrate its investments in any industry or group of industries of the Mexican Stock Exchange Index (or any successor or comparable index as determined by the Board of Directors to be an appropriate measure of the Mexican market) if, at the time of investment, such industry represents 20% or more of the Index; provided, however, that the Fund will not exceed the Index concentration by more than 5%. As of January 31, 2014, no industry group represents 20% or more of the value of the securities included in the Mexican Stock Exchange Index. The Investment Adviser continually evaluates the Fund’s concentration and may choose to concentrate in any industry group in the future subject to this concentration policy.

Repurchase agreements, securities lending and borrowing

The Fund may enter into repurchase agreements with banks and broker-dealers pursuant to which the Fund may acquire a security for a relatively short period (usually no more than a week) subject to the obligations of the seller to repurchase and the Fund to resell such security at a fixed time and price. The Investment Adviser monitors the value of such securities daily to determine that the value equals or exceeds the repurchase price. Under the 1940 Act, repurchase agreements are considered to be loans made by the Fund which are collateralized by the securities subject to repurchase. Repurchase agreements may involve risks in the event of default or insolvency of the seller, including possible delays or restrictions upon the Fund’s ability to dispose of the underlying securities. The Fund will enter into repurchase agreements only with parties who meet creditworthiness standards approved by the Fund’s Board of Directors, i.e., banks or broker-dealers which have been determined by the Investment Adviser to present no serious risk of becoming involved in bankruptcy proceedings within the time frame contemplated by the repurchase transaction.

To generate income, the Fund may also lend portfolio securities to borrowers, although it has not done so since 1999 and has no present intention to enter into any securities lending arrangement. Any such loans must be secured by collateral (consisting of any combination of cash, U.S. Government securities, irrevocable letters of credit and other high-quality debt securities) in an amount at

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least equal (on a daily marked-to-market basis) to the current market value of the securities loaned. The Fund may terminate the loans at any time and obtain the return of the securities. The Fund will continue to receive any interest or dividends paid on the loaned securities and will continue to have voting rights with respect to the securities. In connection with the lending of its portfolio securities, the Fund is exposed to the risk of delay in recovery of the securities loaned or possible loss of right in the collateral should the borrower become insolvent.

The Fund has the ability to borrow money to the extent permitted, or as not prohibited, by the 1940 Act. The 1940 Act requires the Fund to maintain “asset coverage” of not less than 300% of its “senior securities representing indebtedness,” as those terms are defined and used in the 1940 Act.

In selecting securities for the Fund, the Investment Adviser normally will consider the following factors, among others: (i) the Investment Adviser’s own evaluations of the market value, cash flow, earnings per share and other fundamental aspects of the underlying assets and business of the company; (ii) the potential for capital appreciation of the securities; (iii) the prices of securities relative to other comparable securities; (iv) the composition of the portfolio; (v) corporate governance practices; (vi) quality of management; (vii) associations with leading international companies; and (viii) vulnerability to external events. The Investment Adviser utilizes its own internal financial, economic and credit analysis resources as well as information from other sources to seek investments in industries and companies that the Investment Adviser believes have overall growth prospects and a strong competitive position in domestic and/or export markets. The Investment Adviser maintains specific research files for each listed company in which the Fund may invest or has invested that include, among other information, analysis of the economic sector, financial information, business performance, market share, management, investment programs, competition, identified risks, sales and profits forecasts.

The investment-decision process includes daily review of the market and of relevant information regarding listed companies in which the Fund may invest or has invested. This process also involves weekly meetings among the Director General of the Investment Adviser and his appropriate staff, plus, when required, meetings and discussions with company executives. The research personnel of the Investment Adviser visit companies included in the Fund’s portfolio, target companies for review regularly and attend most stockholder meetings. Additionally, companies and brokerage houses doing “road shows” to offer new equity securities or to keep investors informed often visit the Investment Adviser. Personnel of the Investment Adviser also participate in joint meetings with listed companies organized by brokerage houses for clients and analysts and regular conference calls prepared by specific issuers.

Investment in foreign issuers not organized in Mexico but listed on the Mexican Stock Exchange

The Fund may invest 20% of its assets in issuers that are listed on the Mexican Stock Exchange, but which are organized outside of Mexico, provided each such issuer has a subsidiary organized in Mexico.

INVESTMENT RESTRICTIONS

The Fund has elected to be classified as a non-diversified closed-end management investment company and will invest its assets only in a manner consistent with this classification under applicable law. The Fund’s investment objective and the following investment policies and restrictions are fundamental policies of the Fund and may not be changed without the approval of (i) more than two-thirds of the Fund’s outstanding Shares present at a meeting at which holders of more than 50% of the outstanding Shares are present in person or by proxy or (ii) more than 50% of the Fund’s outstanding Shares, whichever is less:

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The following operating policies of the Fund may not be modified without the approval of two-thirds of the Fund’s Board of Directors.

1. The Fund may not issue senior securities as defined in the 1940 Act, and may not borrow through bank loans in an amount in excess of 10% of the Fund’s total assets (and then only to meet temporary cash needs).

2. The Fund may not purchase on margin, write put or call options and engage in short sales of securities not owned by the Fund.

3. The Fund may not make loans other than through the purchase of publicly traded fixed-income securities or short-term obligations of publicly held Mexican corporations.

RISK FACTORS AND SPECIAL CONSIDERATIONS

This prospectus contains certain forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of uncertainties set forth below and elsewhere in the prospectus. Investing in the Shares involves certain risks and considerations not typically associated with investing in the United States. The following discusses risks and special considerations with respect to the offer and with respect to an investment in the Fund.

Foreign investments generally

Foreign investments may involve certain considerations and risks not typically associated with those of U.S. equity securities as a result of, among others:

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Mexico is considered to be an emerging market country. Investment in an emerging market country subjects the Fund to greater risk of loss than investments in developed countries. This is due to, among other things, greater market volatility, lower trading volume, political and economic instability, greater risk of market shut down and more governmental limitations on foreign investment policy than those typically found in a developed market.

The economy of an individual emerging market country may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rate of inflation, currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments position. Further, the economies of developing countries are generally heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies have also been and may continue to be adversely affected by economic conditions in the countries with which they trade.

Foreign investment in certain emerging market issuers is restricted or controlled to varying degrees. These restrictions or controls may at times limit or preclude foreign investment in certain emerging market issuers and increase Fund costs and expenses. Certain emerging market countries require governmental approval prior to investments by foreign persons in a particular issuer, limit the amount of investment by foreign persons in a particular issuer, limit the investment by foreign persons only to a specific class of securities of an issuer that may have less advantageous rights than the classes available for purchase by nationals of the country and/or impose additional taxes on foreign investors. Certain emerging market countries may also restrict investment opportunities in issuers in industries deemed important to national interests. See “—Risks involved in Mexican investments” below.

Reduced secondary market liquidity may have an adverse effect on market price and the Fund’s ability to dispose of particular instruments when necessary. Reduced secondary market liquidity for certain emerging market issuer securities may also make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing the Fund’s portfolio and calculating its net asset value. Market quotations are generally available on many emerging market issuer securities only from a limited number of dealers and may not necessarily represent firm bids of those dealers or prices for actual sales.

Risks involved in Mexican investments

Investment in Mexican securities involves special considerations and risks that are not as frequently associated with investments in U.S. securities, including (1) lesser liquidity and smaller market capitalization of the Mexican securities markets; (2) currency fluctuations; (3) higher rates of inflation and domestic interest rates; and (4) less stringent disclosure requirements, less available information regarding Mexican public companies and less active regulatory oversight of Mexican public companies.

Market illiquidity, volatility

Although one of the largest in Latin America by market capitalization, the Mexican Stock Exchange is substantially smaller, less liquid and more volatile than the major securities markets in the United States. As of January 31, 2014, the aggregate market value of equity securities listed on the Mexican Stock Exchange was approximately $530 billion, compared to approximately $23 trillion for NYSE-listed equity securities. Additionally, prices of equity securities traded on the Mexican Stock Exchange are generally more volatile than prices of equity securities traded on the NYSE. The combination of price volatility and the relatively limited liquidity of the Bolsa may have an adverse impact on the investment performance of the Fund.

Market corrections

Although less so in recent times, the Mexican securities market has been subject to periodic severe market corrections. During the global market correction of 2008, the Mexican Bolsa Index declined 64.5%. Due to the high concentration of investors, issuers and intermediaries in the Mexican securities market and the general high volatility of the Mexican economy, the Mexican securities market may be subject to severe market corrections than more broadly based markets. As is the case with investing in any securities market, there can be no assurance that market corrections will not occur again.

The Mexican economy

Mexico has healthy public sector finances, with a modest fiscal deficit that during calendar 2013 was equivalent to 2.3% of GDP and that is expected by private sector economists to increase to 3.2% of GDP during 2014 and to 2.8% in 2015. GDP registered positive growth rates of 5.4%, 3.9% and 3.9% during 2010, 2011 and 2012, respectively, and is currently expected by analysts to grow 1.2%, 3.4%, 3.9% and 4.2% for 2013, 2014, 2015 and 2016, respectively. Mexico’s economic resilience continues to attract direct foreign investment, although at a lower pace than in the past due to the global deceleration. There is also growing confidence of foreign investors in Mexico’s public sector foreign bond and money markets, as the amount that foreigners invested in these instruments increased from $9.3 billion in 2009 to a record $56.9 billion during 2012. The Mexican government continues to issue fixed-rate, 30-year bonds, denominated in pesos every six weeks. Nevertheless, in the past the Mexican economy has experienced peso devaluations, significant rises in inflation and domestic interest rates and other economic instability and there can be no assurance that the economy will remain stable. In addition, although Mexico has exhibited in the last few years positive market indicators in terms of GDP growth, long-term interest rates, current account deficits, exports, and foreign investment, there is no assurance that these trends will continue. Overt unemployment continues to exist at levels of 4.25% as of December 2013. The economy has recently witnessed significant increases in agriculture, transportation and mining activity and, despite recent tax increases from the fiscal reform, inflation remains under control as of December 31, 2013 at 3.97%.

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Oil and other commodity prices

Mexico’s economy is highly dependent on oil. During 2012, total oil income represented 7.4% of GDP and approximately 33.2% of public sector revenues as of December 31, 2013. The economic growth of Mexico is highly dependent on commodity exports and in particular oil exports. As a result, the Mexican economy is particularly susceptible to fluctuations in the price of oil and other commodities and currency fluctuations. If global economic conditions worsen, prices for Mexican commodities may experience increased volatility and demand may continue to decrease.

Political factors

Mexico is a federal, democratic republic with a tripartite division of powers: executive, legislative and judicial. The chief executive is the President, who is elected by popular vote for a period of six years and who may not be re-elected. There are three primary political parties, the PRI, the PAN and the Partido de la Revolucion Democratica (“PRD”). President Enrique Peña Nieto of the PRI took office on December 1, 2012.

Shortly thereafter, Mr. Peña Nieto and leaders of the three largest political parties signed the Pact for Mexico, in which they outlined a reform agenda and strategy for the next six years. Mr. Peña Nieto ended a 12-year period of control by PAN Presidents. Under the new Administration, Mexican Congress has approved the Labor, Public Sector Accounting, Competitiveness Law, Education, Telecommunication, Political, Fiscal and Financial Reforms, which are expected to result in greater flexibility to create jobs, greater transparency, enhanced competition terms and conditions, higher quality teachers, greater competition in the telecommunications sector, re-election of Congress members, higher tax collection and credit penetration, respectively, among other benefits. In addition, the Mexican Congress recently approved the Energy Reform, which is the most important economic reform, because of its potential growth, since the North American Free Trade Agreement (NAFTA) was signed in 1994. Several constitutional changes were implemented to allow private sector investments in areas that were reserved exclusively to Petróleos Mexicanos (Pemex), the Mexican state-owned oil company, for the past 75 years. The Energy Reform is expected to reverse eight years of declining oil production and place Mexico within the world’s top five crude oil exporting countries. All these structural reforms are expected to boost Mexico’s economic growth in the medium- and long-term. However, this may or may not be the case. The Fund cannot predict whether positive changes in Mexican governmental and economic policy will result from the change in presidential administration. Any such changes, if they occur, could instead adversely affect economic conditions in Mexico. The impact of future events and changes and any political and economic instability in Mexico on the Fund cannot be predicted, although they may have an adverse effect on the Fund’s internal operations and performance. The Investment Adviser cannot be assured that the Mexican political environment will be free of instability in the future. See “Risk factors and special considerations—Risks involved in Mexican investments.”

Security in Mexico

Some risk also exists in regards to the security situation in Mexico. Mexico has experienced a significant increase over the past few years in violence relating to illegal drug trafficking, particularly in Mexico’s northern states near the U.S. border. This increase in violence has had an adverse impact on the economic activity in Mexico generally. Also, social instability in Mexico or adverse social or political developments in or affecting Mexico could adversely affect the Fund and its investments. The possibility exists that government expenditures required to combat the violence may divert resources away from other productive uses, such as economic development and related initiatives. The Fund’s Investment Adviser believes that Mexico’s prevailing stable economic environment, as well as the generally positive performance of Mexican listed companies and financial markets, are indicators that investors in Mexico are decoupling the security situation from their investment decisions, and that with the exception of the impact in a few tourist destinations, the security situation has not significantly affected the Mexican economy and financial markets. However, the Investment Adviser cannot state that this will continue to be the case in the future.

Mexican securities laws and accounting rules

There is less publicly available information about the issuers of Mexican securities than is regularly published by issuers in the United States. All Mexican companies listed on the Bolsa must incorporate the effects of inflation directly in accounting records and in their published financial statements. Thus, Mexican financial statements and reported earnings may differ from those of companies in other countries.

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In July 2010, the Mexican government enacted the Federal Law for Protection of Personal Data Held by Private Persons (Ley Federal de Protección de Datos Personales en Posesión de los Particulares) that protects personal data collected and requires that companies in Mexico ensure the confidentiality of information received from clients. The Fund can provide no assurances as to how this legislation will be interpreted and how strictly Mexican authorities will enforce its application. However, if strictly interpreted and enforced, this legislation could have a material adverse effect on securities the Fund holds, including increasing operating costs for operating companies and subjecting such companies to fines and penalties in the event of violations of the provisions of the law. Given the current environment affecting the financial services sector, there may be future changes in the regulatory system or in the interpretation and enforcement of the laws and regulations that could adversely affect Mexican companies, including operating costs and margins.

In September 2010, the Basel Committee on Banking Regulations and Supervisory Practices (“Basel Committee”) proposed comprehensive changes to the capital adequacy framework, known as Basel III. On December 16, 2010 and January 13, 2011, the Basel Committee issued its final guidance on a number of regulatory reforms to the regulatory capital framework in order to strengthen minimum capital requirements, including the phasing out of innovative Tier 1 and 2 Capital instruments with incentive-based redemption clauses and implementing a leverage ratio on institutions in addition to current risk-based regulatory requirements. In June 2011, the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores, or CNBV) distributed an outline of the projected implementation of Basel III standards in Mexico, which is expected to result in changes to Mexican regulations, that are likely to result in new requirements in respect of regulatory capital, liquidity/funding and leverage ratios, which may impact the profitability of financial service companies and banks.

Although the Fund and the Investment Adviser are subject to service of process in the United States, the Fund has been advised by its Mexican counsel that there is doubt as to the enforceability in Mexican courts of liabilities predicated solely upon the U.S. securities laws, whether or not such liabilities are based upon judgments of courts in the United States. Moreover, bankruptcy and creditors’ rights laws in Mexico are less developed and it may be more difficult to obtain a judgment in a court in Mexico than in the United States.

Currency exchange rate fluctuations

As a non-fundamental policy, the Fund will generally invest at least 80% of its total assets in equity securities listed on the Mexican Stock Exchange, but may reduce its holdings in equity securities listed on the Mexican Stock Exchange below 80% of its total assets for temporary defensive purposes when unusual market or economic conditions occur.

Currency exchange rates can fluctuate significantly over short periods and can be subject to unpredictable changes based on a variety of factors including political developments and currency controls by foreign governments. Historically, the peso has been subject to significant devaluations, and there can be no assurance that similar devaluations will not take place in the future. Although the peso has increased its value against the U.S. dollar by 5.5% in each of 2009 and 2010, in 2011 it depreciated by 12.9% and during 2012 it revalued 8.25% to Ps. 12.79 per dollar. In 2013, the peso devalued again by 1.9% to Ps. 13.0367. During January 2014, volatility has prevailed in international financial markets and emerging markets currencies have generally depreciated. The Mexican Peso devalued 2.40% during January 2014, from Ps. 13.0367 at the end of 2013 to Ps. 13.3573 on January 31, 2014. The Mexican Central Bank may from time to time intervene in the foreign exchange market in an attempt to minimize volatility and support an orderly market. The Mexican Central Bank and the Mexican government have also promoted market-based mechanisms for stabilizing foreign exchange rates and providing liquidity to the exchange market, such as using over-the-counter derivatives contracts and publicly-traded futures contracts. The Fund cannot be assured that such measures will achieve their desired effects, and even if they do, it is expected that the peso will remain subject to fluctuations against the U.S. dollar.

A change in the value of the currency in which a portfolio security is denominated against the U.S. dollar will generally result in a change in the U.S. dollar value of the Fund’s assets. If the exchange rate for a foreign currency declines compared to the U.S. dollar, the Fund’s NAV would decline. In addition, although most of the Fund’s income will be received or realized primarily in foreign currencies, the Fund will be required to compute and distribute its income in U.S. dollars. Therefore, for example, if the exchange rate for a foreign currency declines after the Fund’s income has been accrued and translated into U.S. dollars, but before the income has been received or converted into U.S. dollars, the Fund could be required to liquidate portfolio securities to make distributions. Similarly, if the exchange rate declines between the time the Fund incurs expenses in U.S. dollars and the time the expenses are paid, the amount of foreign currency required to be converted into U.S. dollars in order to pay the expenses in U.S. dollars will be greater than the foreign currency equivalent of the expenses at the time they were incurred.

If a severe devaluation were to occur, it could result, as it has in the past, in the implementation of exchange controls that may impact the Fund’s ability to convert pesos into U.S. dollars or to transfer currencies outside of Mexico, which may have an impact on the Fund’s business and results of operations. In addition, the Fund generally does not hedge currency risks. Thus, any significant depreciation of the peso against the U.S. dollar could have a direct adverse impact on the Fund’s returns.

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Net asset value discount

Shares of closed-end investment companies frequently trade at a discount from NAV. This characteristic is a risk separate and distinct from the risk that NAV will decrease. The Fund’s Shares have frequently traded at prices below NAV since the commencement of the Fund’s operations. In the 12-month period ended December 31, 2012, the Fund’s Shares traded in the market at an average discount to NAV of 8.1%. Since January 18, 2013, the fund began trading at a premium. As of February 27, 2014, the premium was 0.85%. Among the factors which may affect whether Shares of the Fund trade at a discount to net asset value are portfolio investment results, the general performance of the Mexican economy and Mexican securities, supply and demand for Shares and the development of alternatives to the Fund as a vehicle through which United States and other foreign investors may invest in Mexican securities. The Fund cannot predict whether its Shares in the future will trade at, below or above NAV. The risk that shares of a closed-end fund might trade at a discount is more significant for investors who wish to sell their shares in a relatively short period of time. For those investors, realization of gain or loss on their investment may be more dependent upon the existence of a premium or discount than upon portfolio performance.

Dollar-denominated investments risk

The Fund may also invest in dollar-denominated deposits and dollar-denominated investments such as U.S. Treasuries, U.S. Agency securities, Agency Mortgage-Backed Securities and Mexican Sovereign Debt. Asset-backed securities such as mortgage-backed securities represent interests in pools of consumer loans and interest and principal payments ultimately depend upon payment of the underlying loans by individuals. Securities issued by U.S. government agencies or government-sponsored enterprises may not be guaranteed by the U.S. Treasury. For example, Ginnie Mae (also known as the Government National Mortgage Association or GNMA), a wholly owned U.S. government corporation, is authorized to guarantee, with the full faith and credit of the U.S. government, the timely payment of principal and interest on securities issued by institutions approved by GNMA and backed by pools of mortgages insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. Government-sponsored guarantors (i.e., the guarantees and securities of which are not backed by the full faith and credit of the U.S. government) include the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”). Pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA but are not backed by the full faith and credit of the U.S. government. FHLMC guarantees the timely payment of interest and ultimate collection of principal, but its participation certificates are not backed by the full faith and credit of the U.S. government. The U.S. government may not provide financial support to U.S. government agencies, instrumentalities or sponsored enterprises if it is not obligated to do so by law.

Foreign custody

Investment companies generally hold foreign securities and cash in foreign banks and securities depositories, and regulatory oversight over such entities may be limited. The laws of certain countries may put limits on a fund’s ability to recover its assets if a foreign bank, depository or issuer of a security, or any of their agents, goes bankrupt. In addition, it is often more expensive for a fund to buy, sell and hold securities in certain foreign markets than in the United States. The increased expense of investing in foreign markets reduces the amount a fund can earn on its investments and typically results in a higher operating expense ratio for a fund than for investment companies invested only in the United States.

BBVA Bancomer, SA (“Bancomer”), acts as the Fund’s custodian, and S.D. Indeval, S.A. de C.V. (“Indeval”) acts as a securities depository for securities or equivalent book-entries in Mexico. It is the Investment Adviser’s view that Bancomer and Indeval are stable financial institutions unlikely to be subject to the risks described herein. In addition, the Board of Directors reviews and evaluates the Fund’s foreign custody arrangements on an annual basis.

Non-diversified status

The Fund is classified as a “non-diversified” management investment company under the 1940 Act, which means that the Fund is not limited by the 1940 Act as to the proportion of its assets that may be invested in the securities of a single issuer. As a non-diversified investment company, the Fund may invest a greater proportion of its assets in the obligations of a smaller number of issuers and, as a result, will be subject to greater risk with respect to its portfolio securities. Although, with respect to 50% of its assets, the Fund must diversify its holdings in order to be treated as a regulated investment company under the provisions of the Code, the Fund may be more susceptible to any single economic, political or regulatory occurrence than would be the case if it had elected to diversify its holdings sufficiently to be classified as a “diversified” management investment company under the 1940 Act. See “Taxation—U.S. tax status.”

A significant portion of the Fund’s net assets is comprised of unrealized capital gains due to the investment performance of many of the Fund’s portfolio holdings over the last several years. Such gains, when realized and distributed, will become taxable to stockholders. Furthermore, there can be no assurance that the investment performance giving rise to such unrealized gains will continue, or that such gains will, in fact, be realized.

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Value-added, withholding and/or other taxes may apply to the Fund and its investments, which will reduce the Fund’s return. The Fund intends to elect, when eligible, to “pass-through” to the Fund’s Stockholders, as a deduction or credit, the amount of foreign income and similar taxes paid by the Fund.

Concentration risk

The Mexican Stock Exchange is a concentrated market, as the ten largest companies by market capitalization represent approximately 78% of total market capitalization. Also, an individual, Mr. Carlos Slim Helú, has a controlling interest in companies representing approximately 23% of the market capitalization of the Mexican Stock Exchange. The value of the Mexican Stock Exchange may be subject to greater volatility than markets that are less concentrated. Any factors or events which impact Mr. Slim could have negative repercussions for the issuers in which he holds a controlling interest and the Mexican Stock Exchange as a whole. As of January 31, 2014, the Fund had 11.5% of its net assets invested in companies controlled by Mr. Slim.

As previously mentioned, the Fund has adopted a concentration policy which permits it to concentrate its investments in any industry or group of industries of the Mexican Stock Exchange Index (or any successor or comparable index, as determined by the Board of Directors to be an appropriate measure of the Mexican market) if, at the time of investment, such industry represents 20% or more of the Index; provided, however, that the Fund will not exceed the Index concentration by more than 5%. As of January 31, 2014, no industry group represents more than 20% of the Fund’s net assets. Because the Fund’s investments may be concentrated from time to time in certain industries, the value of the Fund may be subject to greater volatility than a fund with a portfolio that is less concentrated. If securities of a particular industry in which the Fund has concentrated fall out of favor, the Fund could underperform against other funds with greater industry diversification.

To the extent the Fund concentrates its investments in certain industries in accordance with its concentration policy or is invested in companies which Mr. Slim controls, the Fund will be more susceptible to effects caused by changes in the economic climate, overall market volatility, or regulatory environment which impact these industries and any factors or events affecting Mr. Slim.

Anti-takeover provisions

The Fund has provisions in its Charter and Bylaws that could have the effect of limiting (i) the ability of other entities or persons to acquire control of the Fund, (ii) the Fund’s freedom to engage in certain transactions, and (iii) the ability of the Fund’s Directors or Stockholders to amend the Charter and Bylaws or effect changes in the Fund’s management. Other bylaw provisions that may be regarded as “anti-takeover” disclose that the Fund has elected, under limited circumstances, to be subject to the Maryland Control Share Acquisition Act (“MCSAA”), which sets restrictions on the voting rights of holders of MCSAA “control shares” of the Fund acquired in a MCSAA “control share acquisition.”

The foregoing provisions may be regarded as “anti-takeover” provisions and may have the effect of depriving Stockholders of an opportunity to sell their shares at a premium over prevailing market prices. See “Capital stock—Certain provisions of the Maryland General Corporation Law, the Charter and Bylaws.”

Market disruption

Instability in the Middle East and North Africa, such as in Tunisia, Egypt, Iran and Bahrain, and terrorist attacks in the United States and around the world have had a substantial impact on the U.S. and world economies and securities markets. The nature, scope and duration of the occupation cannot be predicted with any certainty. Terrorist attacks closed some of the U.S. securities markets in 2001, and political instability closed the Cairo stock exchange in January 2011, and similar events cannot be ruled out in the future. The war and occupation, political instability, terrorism and related geopolitical risks have led, and may in the future lead, to increased short-term market volatility and may have adverse long-term effects on U.S. and world economies and markets generally. There may also be interruptions in the market beyond the Fund’s control caused by natural disasters, such as weather-related emergencies. These risks may adversely affect individual issuers and securities markets, interest rates, secondary trading, ratings, investor psychology, credit risk, inflation and other factors relating to the Shares and the investments made by the Fund.

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PORTFOLIO COMPOSITION

The following sets forth certain information with respect to the composition of the Fund’s investment portfolio as of October 31, 2013, and has been derived from the Fund’s financial statements, audited by PricewaterhouseCoopers LLP, whose report, along with the Fund’s financial statements, are incorporated by reference in this prospectus.

Schedule of Investments.

As of October 31, 2013

The Mexico Fund, Inc.

Schedule of Investments

as of October 31, 2013

See Notes to Financial Statements.

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The Mexico Fund, Inc.

See Notes to Financial Statements.

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The Mexico Fund, Inc.

Schedule of Investments

as of October 31, 2013

Concluded