Currently Mexico has positioned itself as one of the most active M&A countries in Latin America thanks to nearshoring, which has triggered a scenario that reflects a 20% increase in M&A at the corporate level in our country at the beginning of 2024.

According to Forbes Mexico, the outlook for this year looks very favorable in comparison to 2023 in relation to the raising of capital and debt mainly driven by the United States–Mexico–Canada Agreement “USMCA” and nearshoring. The industries that will benefit in the next two years are transportation, manufacturing, logistics, technology, financial services, construction and real estate.

In this sense, the trade conflict between the United States and China continues, which will continue to benefit us with the relocation of companies to Mexico, generating demand in the aforementioned industries.

In terms of cross-border transactions, in the first month of 2024, Mexican companies invested in the United States and Colombia. Meanwhile, Spain has made acquisitions in Mexico. In asset acquisitions, 55 transactions have been registered, representing an 8% increase year-on-year terms.

Likewise, the Latin American transactional market has recorded 151 mergers and acquisitions, both announced and closed, for an aggregate amount of USD$2,248 million since January. These figures imply a decrease of 32% in the number of transactions and 10% in their amount, compared to January 2023. In Mexico, 19 transactions were announced in February 2024, representing an increase of 9 transactions over the previous month. Compared to the same period last year, volume increased by 6 transactions.

According to data recorded by TTR Data, during the month of January, Brazil led the ranking as one of the most active countries in the region by number of transactions, with 103, representing a 26% decrease in operations and a decrease of 11% in the mobilized capital in regards to January 2023. It is followed by Chile, with 13 transactions, representing a 61% decrease in operations and a 69% decrease in amount (US$ 77 million) compared to January 2023. In the case of Colombia, it rises in the ranking with 12 transactions, which represents a decrease of 40% at the beginning of 2024, reflecting an increase of 4,174% in the mobilized capital of USD $465 million.

Argentina decreased its activity and recorded 5 transactions with a 44% decrease and a 227% increase in amount (USD$50 million), making Mexico, together with Colombia, the only ones in the market with positive figures. In last place is Peru with 6 transactions, presenting a decrease of 14% and a 91% drop in its mobilized capital for the equivalent of USD$14 million.

Mexico, in the real estate sector, led M&A activity with 8 transactions announced as of February 2024, representing 27.6% of total transactions announced as of February 2024, representing 27.6% of total transactions during the year. This is followed by the industrial and consumer products sectors, with 2 transactions of Mexican companies announced abroad, representing 25.0% of the total number of transactions during the period, the most significant being the acquisition of the Uruguayan company Pagnifique by the Mexican company Bimbo, according to Seal Associates.

In conclusion, we believe that as a result of global trade tensions, Latin America is favoring new M&A operations, especially Mexico because of its strategic location with the United States and its infrastructure in the distribution and marketing of products covering various industries, many transnational companies are coming to establish themselves in our country so far this year 2024.

In VAHG we provide legal services with great experience in Mergers and Acquisitions, being leaders in this practice in Mexico. We are backed by a solid legal infrastructure with more than 30 years of combined experience, focused on timely assisting our clients with the commitment and integration in the legal framework of Mergers and Acquisitions.

For more information regarding our professional services, our lawyers in the Mergers and Acquisitions Practice are at your service.

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document refers to laws applicable in Mexico.

On October 6, 2023, the Secretary of Economic Development and Labor of the State of Morelos filed before the Mexican Institute of Industrial Property (“IMPI“), the application for protection of Gabanes de Hueyapan, Morelos as a Geographical Indication, to which after a few months of examination, today, February 29, 2024, was published in the Official Gazette of the Federation the Declaration of Protection of the Geographical Indication Gabanes de Hueyapan, Morelos.

This Declaration of Protection entails that the origin of this type of traditional garment consisting of a wool fabric will be attributed exclusively to the Municipality of Hueyapan, which is an indigenous community located at the foothills of the Popocatépetl Volcano, which was recently incorporated into the state of Morelos in December 2017.

The protection of this product represents a great pride for the people of Hueyapan, since it means the recognition of a valuable production process totally artisanal and traditional of the zone, from the job of obtaining the sheep wool, the elaboration of the threads, the dyeing, which mainly uses plants and insects, to the weaving with a waist loom, characteristic of these gabanes.

In accordance with the Federal Law for the Protection of Industrial Property, a Geographical Indication (“GI“) is understood as the recognition of: i. A geographical area that serves to designate a product as originating therein; ii. A reference indicating a product as originating therein; or iii. A combination of the name of a product and a geographical area. Provided that certain quality, characteristics or reputation of the product are attributed to the geographical origin of any of the following: raw materials, production processes or natural and cultural factors.

Sometimes it may be difficult to differentiate a GI from an Appellation of Origin (“AO“), since they are both legal concepts oriented to protect products of certain qualities that come from certain geographical areas as long as the quality is attributable to the geographical area from which they come, however, the AO is more stringent, since it needs to comply with all the requirements listed in the previous paragraph, while the GI can comply only with one of the three requirements mentioned above.

In Mexico, 16 applications have been filed to protect products as Geographical Indications, however, only 5 of them have received such protection: Cajeta de Celaya, Tallas de Madera (Wood Carvings): Tonas and Nahuales from the Valles Centrales de Oaxaca, Seda (Silk) de Cajonos, Tapetes de Teotitlán and, as of today, Gabanes de Huayapan.

It is important to remember that the holder of the rights over the AO’s and IG’s in Mexico is the Mexican Republic itself, and it is IMPI the one in charge of authorizing the use of such rights. Furthermore, IMPI is empowered to exercise the protection and defense actions of the AO’s and IG’s, although it can delegate these tasks to a third party, such as a Regulatory Council.

In VAHG we provide support and advice on the protection of AO’s and IG’s, as well as for individuals to legally participate in the industry of products protected by a Appellation of Origin or Geographical Indication. In case you are interested in this area, please contact our team or one of the lawyers mentioned below:

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document refers to laws applicable in Mexico.

Last February 10^th, the World Cinema Day was celebrated, this is an annual holiday that commemorates the passion and connection of the people with this art form. This holiday was recently established (in 2020) by the Academy of Motion Picture Arts and Sciences to be held on the second Saturday of February every year, following the 92nd Oscar Awards Ceremony in that year.

Cinema, or the “seventh art” is a whole and highly relevant industry due to its cultural role in the whole world. This is a form of entertainment, which, in modern terms, implies the fixation in an audiovisual work of a complex piece that combines human creativity with different areas of technical knowledge in order to generate a feeling in the spectator, and which results in one of the figures protected by Copyright Law.

Cinema comprises an accumulation of disciplines that when put together end up being a piece composed of other arts, such as photography, music, literary or dramatic writing, among others, with a variety of genres and formats for all tastes and ages, and above all, which are subject to legal protection.

Along with the creation of a cinematographic work, there are a series of activities involved, such as script writing, auditions, set assembly, video and audio recordings, direction, pre-production, production and post-production, distribution, advertising, etc., which necessarily result in the need to observe several legal aspects in order to carry out the creative work.

The legal activities related to a cinematographic work are well varied and are usually listed in a “Clearance“, which has the purpose of avoiding obstacles such as lawsuits or legal or contractual breaches during the creation of an audiovisual work, it also operates as a “Due Diligence”, where the legal compliance status of all the elements of the work or film can be observed.

In a Clearance we usually observe aspects such as: labor, advertising, confidentiality, image use contracts, permits from authorities to record monuments and public places, commissioned works for music, licenses to use other works, leasing of goods and locations, etc.

Considering the above, it is important to have specialized legal counselling on copyright matters for the creation of cinematographic or audiovisual works, observing legal compliance at all times. In VAHG we provide support to carry out “Clearances” and advice on the protection of the creative creations of our clients in terms of audiovisual and other works. In case you are interested in receiving assistance in this area, please contact our Team or one of our Lawyers mentioned below:

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.

It is a fact that globalization and the activity of Mexican citizens in other countries has increased year by year, with an undeniable mobility and increase in cross-border interactions at a global level, resulting in a growing need to present public documents abroad. Consequently, it has been necessary to ensure the authenticity of public documents, through a process called “legalization”, which consists of several certifications, representing a costly and lengthy process that usually involves several authorities.  For this reason, on October 5, 1961, the Hague Convention Overturning the Requirement of Legalization of Foreign Public Documents, or “Apostille Convention”, was signed.

In the words of the World Organization for Cross-border Cooperation in Civil and Commercial Matters, the Apostille Convention “replaces the traditional cumbersome process of legalization with a single formality: the issuance of a certificate called an Apostille. The Apostille, issued by the State of origin, certifies the authenticity of the origin of a public document so that it can be presented abroad, in another Contracting Party to the Convention”.

The Apostille Convention came into force on January 24, 1965, with only 5 States parties, and has grown to 126 signatory countries today. The most recent additions have been Canada, Pakistan, Rwanda, Senegal and China.

The affiliation of Canada and China is highlighted, as they are two of the countries with which Mexico has the greatest trade activity. China joined after signing and ratifying the Apostille Convention by means of an instrument of accession, indicating the effective date as November 7, 2023, with the sole reservation of applicability for the country of India and those that the People’s Republic of China does not recognize as sovereign States.

Likewise, Canada joined after signing and ratifying the Apostille Convention by means of a Decree of Accession indicating as effective date on January 11, 2024, without reserves.

The above brings the benefit of saving time and money to Mexican companies and individuals who need to file public documents in such countries, which, as it is emphasized, are quite a few.

These benefits are explicitly reflected in a considerable reduction of time and costs for Mexican nationals seeking this procedure, being able to reduce the processing time in what before could take up to more than a month, to a minimum of 2 working days, by reducing the process from four instances to only one. The economic benefit is not far behind, by reducing the amount of governmental fees.

In Mexico, the Apostille Certificate is provided at the State level by the respective Directorate of Certifications of each Federal Entity, and at the Federal level by the Office of the Official Gazette of the Federation, attached to the Secretary of State.

In VAHG we provide legal support to process particular apostilles and legalizations for your Company, having more than 10 years of experience in these proceedings before State and federal agencies for different countries and all kinds of documents for purposes such as the incorporation of companies abroad, immigration procedures, studies abroad, among others. In case you are interested in processing any of these certifications or require additional information, please contact one of our Intellectual Property Attorneys, mentioned below:

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.

We would like to bring to your attention that as of January 1, 2024, new rules regarding the address for receiving trademark notifications before the United Kingdom Intellectual Property Office (UKIPO) came into force and may have a significant impact on your trademark portfolio.

 A service address is an address at which you receive postal correspondence from UKIPO or third parties regarding your UK registered trademark or proceedings relating to it. Under the new provision, if there is no UK address to notify and new contentious proceedings are commenced, the UKIPO will not notify you and this could result in the cancellation of trademarks in the UK.

A service address located in the United Kingdom, the Channel Islands or Gibraltar is now required to defend invalidity and revocation actions for non-use, and continue beyond the defense stage in opposition proceedings. If you do not have an address with these specifications and a third party requests to cancel or revoke your trademark, the UKIPO will send you a letter setting a period of one month for you to designate a United Kingdom address. However, you must nominate a UK address with the submission of the defense or within one month of submitting it to continue with the opposition proceedings. If the right holder does not respond, the process could prosper without his participation or defense and, ultimately, the right could be lost.

To safeguard rights, we recommend that rights holders proactively review their comparable UK trademarks and re-registered design rights and designate a valid UK notification address before the rules change.

If you wish, we can arrange for the representation of these UK brands at the UKIPO. We would notify the UKIPO and add the brands to our database. If your clients later wanted help with renewals or oppositions in the UK, we could provide the costs.

If you require additional information or would like VAHG to review the particular implications for your company, please contact the partner responsible for your matters or one of the attorneys listed below:

**The release of this document does not constitute legal, accounting or professional advice of any kind, nor does it intend to be applicable to particular cases. This document only refers to applicable laws in Mexico.

On November 22nd, International Musicians’ Day was celebrated on the feast of St. Cecilia, who in the Catholic Church was declared by Pope Gregory XIII as the patron saint of musicians and therefore UNESCO established it as the date to celebrate all people who play an instrument or even dedicate their lives to this art.

Musicians are the creative force behind a huge industry that intertwines with many other industries for a variety of purposes, such as entertainment through concerts, films and plays; commercial purposes in television and radio advertising campaigns, podcasts; sporting, religious and academic events. Music is also used in restaurants, bars and even in elevators. For all these reasons, it is important to protect the ownership of their creations and to regulate the economic potential that results from them.

Given the importance of musicians, they have been granted recognition and protection for their artistic work, which is part of the cultural heritage and human wealth. In Mexico, musical creators are protected in various ways, particularly through the Federal Copyright Law (the “Law”), which recognizes copyrights in regards of works of several fields, including “musical compositions, with or without lyrics”.

It is worth remembering that copyright comprises the protection of intellectual creations subject to protection under the Law, for original authors, authors of derivative works, performers or even those who are engaged in publishing a musical work (neighbouring rights).

The copyrights of musicians are divided into two: moral rights, and economic rights, which are distinguished below:

Moral rights: These are those related to the creation of a work; they are inalienable, do not expire, cannot be waived and cannot be encumbered. They grant rights such as the right to disseminate the work, recognize their quality as authors, modify the work, etc.

Economic rights: These are rights related to the exclusive exploitation or to authorize others to economically exploit a work and are always temporary. They grant the right to authorize or prohibit the reproduction, publication, edition or material fixation of a work in copies, the public communication of a work; the dissemination of derivative works (such as translations, arrangements or others), etc.  In Mexico, ownership rights last for the lifetime of the author and one hundred years after his or her death. These rights are inheritable.

Musicians can participate in the music industry in different roles, such as composers, performers, artists, publishers, producers, arrangers, etc., and in diverse platforms, such as in a studio, remotely, as independent or for a record label, expanding their talent with the advance of technology for more ways to create music and leave a cultural and economic legacy.

There are many cases where artists have suffered abuse from the people with whom they sign contracts for the administration and distribution of their works, affecting their careers and their income, leading to phenomena such as Taylor Swift’s re-recorded songs (“Taylor’s Version”), so it is essential that they know their rights and the ways to protect themselves, to avoid abuse and to be able to live from their art.

At VAHG we provide legal support in copyright matters in order to protect musical work and give legal advice to musicians in Mexico. If you require additional information or if you would like VAHG to review the particular implications for the protection of your musical project and your moral and ownership rights, please contact the partner responsible for your matters or one of the lawyers mentioned below:

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.

As we all know, mortgage credit is a tool that favors the acquisition of housing. For some people, the only possibility of acquiring a property is through the Mexican Institute of the National Housing Fund for Workers “INFONAVIT”, the main provider of housing loans in the country, which for decades has offered more loans than banks, but does not currently have the best financial conditions. The year 2022 was positive in terms of mortgage loans, which reflected a positive balance with an average rate of 9.55%.

In spite of the monetary policy that has been under pressure during the past year, banks contained the increase in rates, following the Bank of Mexico “BANXICO’s” policies to curb inflation, providing a constant flow of acquisitions.

Mortgage rates are more linked to the M10 (10-year bond rate) and not to the reference rate defined by BANXICO, which is why the mortgage market may decrease, since there is no change in the behavior of the M10.

Mortgage credit in 2023 has remained in double digits, but without rising too much. If conditions throughout this year improve and are maintained, rates could be lower. This would apply if the benchmark rate and inflation are maintained and if the global economy begins to cool. Financial institutions granting mortgage loans foresee that they could continue to have the same conditions, however, they would seek income from other sources such as commissions in order to support increases in favor of the consumer.

As for the placement of housing loans by commercial banks, there was a 15% annual decrease at the end of the first half of 2023, with a total of 61,400 mortgages, according to data from the Mexican Banking Association (ABM). In terms of investment, there was a 3% decrease with MXN$131.2 billion placed.

Now is a good time to buy a home through a mortgage loan. Although rates could increase, they are stable, so they are an excellent opportunity to obtain a property with good conditions by seeking advice from a mortgage specialist. The Mexican National Commission for the Protection and Defense of Users of Financial Services “CONDUSEF” also shows every year a comparative table of the mortgage interest rates offered by different banking institutions operating in Mexico. Some of these banking institutions have a mortgage loan simulator available to the public.

Enrique Margain, coordinator of the Mortgage Committee of the Association of Banks of Mexico (ABM), stated that since last year there has been a slowdown in the acquisition of housing units with mortgages, with a drop in the volume of loans that has resulted from increases in the average amount handled by banks, leading to an increase in housing loans, which has prompted banks to reevaluate their strategies, to focus on the innovation of their products and services in order to maintain their competitiveness.

BBVA Mexico announced this year a historic investment of MXN$100 billion for the housing sector. In the course of this year, BBVA Mexico expects to place more than 45,000 mortgages in individual loans for more than MXN$77 billion, and will grant more than MXN$33 billion in loans to developers for housing construction.

Banco Santander Mexico has a 17% market share in the bank’s mortgage portfolio, with a portfolio of MXN$212,372 billion at the end of the first half of this year, which in turn represents 26% of the bank’s total portfolio.

At VAHG we provide legal services with great experience and knowledge in the Banking and Finance Practice, being leaders in this Practice in Mexico. We are backed by a solid legal infrastructure with more than 30 years of combined experience, focused on timely assisting our clients with the commitment and integration with the legal framework in Real Estate.

For more information regarding our professional services, the Banking and Finance team is at your service.

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.

On October 20, 2023, an important Decree was published that amends several provisions of the Mexican General Corporations Law (“LGSM”). The purpose of these reforms is to modernize and make more flexible the way in which companies can hold Shareholders’ Meetings and the Sessions of the Board of Directors in order to obtain electronic signatures of the minutes of such meetings.

In addition, the possibility of holding meetings outside the registered corporate? address is now introduced in any case, as long as the shareholders approve it in its entirety.

In order for Mexican companies already incorporated to adopt these measures, they must amend their by-laws.

These amendments are applicable to Limited Liability Companies (LLC /S de R.L.?) and to Public Limited Companies (PLC S.A.).

What requirements must be met for Meetings or Board Sessions to be held by electronic means?

In order to hold Shareholders’ Meetings and Sessions of the Board of Directors, three requirements must be met: (i) they must be held simultaneously, through the use of any electronic means or real-time technology through digital platforms; (ii) they must allow interaction in the deliberations as if they were held in person; and (iii) they must allow the identification of the participants.

Is it necessary to record the meetings or sessions held by electronic means?

In this regard, as a security measure and in order to provide full legal certainty as to their conclusion, VAHG recommends obtaining authorization for the recording of the Shareholders’ Meetings or Sessions of the Board of Directors and safeguarding said files in order to be able to have evidence at a later date. This condition would entail the amendment of the Company’s bylaws to provide for and allow the recording of the Shareholders’ Meetings or Sessions of the Board of Directors, as long as it is authorized prior to initiation by a majority vote of those present.

Can the minutes of the meeting or session be signed electronically?

Indeed, with the reform of the LGSM it is now possible that the minutes of the meeting or of the administrative body can be signed by electronic means, this will have to be provided for in the bylaws of the company. The electronic signature must comply with the requirements established in the corresponding Mexican official standard NOM-151-SCFI-2016.

A deadline is now also established for the holding of meetings. The term for the publication of the notice for the holding of Shareholders’ Meetings or Sessions of the Board of Directors will be the one established in the bylaws and in its absence 8 days in the case of a Limited Liability Company (S de R.L.) and 15 days in the case of a Public Limited Company (S.A), and the companies may agree that the Shareholders’ Meetings and the Sessions of the Board of Directors may be held with all or part of its attendees through the use of electronic means or technology.

These reforms represent an important step towards the modernization and adaptation of business practices in Mexico, allowing greater flexibility in the conduct of meetings and the use of technology in business processes.

At VAHG we are ready to support you in adapting your company’s bylaws to take advantage of these new tools.

We are here to help our clients and friends. If you need assistance or have any questions, please do not hesitate to contact us at the following addresses:

**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.

What is it?

Compliance and compliance with the applicable regulations, through the implementation and application of internal policies, programs and procedures in accordance with the laws, regulations and standards, national or international, in force, which allow monitoring, identifying, alerting and reporting breaches of the law with the purpose of avoiding, reducing or mitigating risks for companies.

Background

• New Global Criminal Policy: Anti-Corruption Laws of Extraterritorial Application (Foreign Corrupt Practice Act of the United States, Bribery Act of the United Kingdom, SAPIN II Law of France, etc.).
• International Standard ISO 19600 – Compliance Management System (2015)
• C. International Standard ISO 37001 – Anti-Bribery Management System (2016)
• Federal Law for the Identification and Prevention of Operations with Resources of Illicit Origin
• and. New Criminal Justice System in Mexico
• F. National Code of Criminal Procedures.

Importance

Based on the national and international legislation in force, there is the obligation of legal persons to monitor, control and ensure due legal compliance with the applicable regulations, favoring the “health” of the company.

Legal compliance allows (i) to generate a culture of integrity and ethics in the Company and its employees; (ii) avoid economic sanctions; (iii) avoid damage to the image and reputation of the Company and its collaborators and (iv) train the employees and officials of the Company regarding how to act in the face of certain behaviors or situations that arise on a day-to-day basis according to the values , policies and guidelines of the company and the business.

Corporate Compliance

Establish the principles and norms of Corporate Governance that allow the Company to create a system of weight and counterweight for the proper functioning of the governing bodies (shareholders meeting, administration body and first level officials) in decision making. Likewise, regulation and implementation of policies in the granting of powers, investments of the company, conflict of interest, relations with related parties, contracts with Company officials, etc.

Commercial Compliance

• Government contracting policy
• Hiring policy with individuals
• Sales policy
• Purchasing and procurement policy
• Warranty Policy
• Price and discount policy
• KYC Policy

Compliance with Money Laundering

Evaluate if the Company carries out one or more vulnerable activities of those provided in the LFIPORPI to establish the procedure for identification and reporting of these before the FIU. Likewise, with respect to activities in which there are restrictions on the payment of cash provided for in said law.

Vulnerable Activities

• Games and raffles
• Issuance and commercialization of service, credit and prepaid cards
• Issuance and marketing of traveler’s checks
• Offer of loan, mutual or credit with or without guarantees
• Real estate construction or development services and intermediation in the transfer of ownership or constitution of rights
• Marketing of Precious Metals
• Auction or commercialization of works of art
• Marketing or distribution of vehicles
• Shielding services
• Transfer or custody services of money or securities
• Independent professional services for resource management, bank account management, real estate sales, etc.
• Public Faith: transmission or constitution of real rights over real estate, granting of powers irrevocably, incorporation of legal entities, modification of assets, merger, spin- off, transferring ownership or guarantee trusts over real estate, granting of mutual or credit agreements and appraisals.
• Receipt of donations
• Foreign trade services
• Use and enjoyment of real estate
• Exchange of virtual assets.

Cash restrictions

• buying and selling of real estate
• sale of vehicles
• sale of watches, jewelry, precious metals and works of art
• tickets, contests or sweepstakes
• shielding
• sale of shares or social shares
• property leasing

Anti-Corruption Compliance

Implement the following policies in the Company according to the fundamental values ​​of the Company and the activities in its usual operation:

• Anti-Corruption Policy
• Code of ethics
• Confidentiality and Information Management Policies
• Conflict of Interest Policy
• Transparency Policy
• Economic Competition Policy (agreements between competitors or economic people, pricing, exclusivities, exchange of information, since some monopolistic practices can be sanctioned with imprisonment).

Labor Compliance

• Labor Contracts in accordance with the LFT
• Internal regulations
• ContractCollective
• Non-discrimination Policies
• Personal data protection
• Use of Work Tools
• Access to employee communications
• Procedure of Administrative Acts and Sanctions
• Code of ethics
• Human Resources Policies
• Employee Records

Compliance with Personal Data

• Privacy Policy and Notice
• ARCO rights
• Procedure for obtaining, handling and saving personal data of employees, suppliers, customers, etc.
• Confidentiality agreements for employees, customers and suppliers

IP compliance

• Intellectual property rights policy: commissioned work (labor contracts and service provision contracts)
• IT policy (information technology)
• Use license policy

Compliance in Criminal Matters

Under the new National Code of Criminal Procedures, legal entities may be criminally liable for crimes committed by third parties, employees, representatives or administrators when the crime is committed on behalf of, for the benefit of the legal entity or through means provided by is; such as, influence traffic, bribery, fraud, cover-up, operations with resources of illicit origin, crimes against the environment, against health, crimes related to copyright and intellectual property, tax fraud, among others.

Legal persons are criminally liable when it is proved – in addition to the commission of the crime by their employees, administrators or representatives of the legal entity – the failure to observe due control.

There is non-compliance with due control when:

1. There is no risk analysis by the Company of the crimes that could be committed.
2. There is no manual describing the functions and responsibilities of the areas and officials of the Company involved in the prevention and identification of crime.
3. There are no internal mechanisms for reporting crimes or, where appropriate, reporting to the MP.
4. Lack of training for employees and collaborators of the Company regarding the prevention and identification of crimes.
5. Lack of dissemination in the Company of its anti-corruption, money laundering, crime prevention policies.
6. There are no effective internal control measures for the prevention and identification of operations with resources of illicit origin.
7. There are no policies for administration and management of financial resources.

RECOMMENDATIONS

1. Understand the business and operation of the same to analyze and determine risks for regulatory breaches.
2. Determine application of national or international laws extraterritorial application.
3. Promote a “know your customer” culture with customers, especially in business relationships, regardless of vulnerable activities.
4. Constant training of employees in anti-corruption and crime prevention policies.
5. Implementation of policies in the different fields of action and control mechanisms suitable and effective for their application.

We are at the beginning of a New Economic Era and Geo-political Reordering that confers great opportunities for the Real Estate Sector in Mexico. The key opportunities are: geographic location and trade agreements, with potential access to 1.36 billion consumers, growth in financial and real estate services with 13% of Gross Domestic Product (GDP), and the growing middle class with 47 million people (37% of the total population) and the increased participation of women in the labor market, with 46%.

With nearshoring and labor demand in Mexico, our country recorded that of the total Foreign Direct Investment (FDI) in the manufacturing industry, 20% came from Asia.

In 2023, it was confirmed that the pipeline of Asian investors in the real estate sector in Mexico is the fastest growing and will continue to be a trend for the next 3 years, so it is worth focusing on the study of the real estate landscape in the country.

Among the challenges facing the real estate sector in Mexico are: energy, communications and transportation infrastructure, application facilities and permits, public security, tax incentives for investment, and technical training and updating programs for workers in the sector.

As a result, the impact of inflation on the real estate sector in Mexico has been among the highest in the last 20 years. Inflation in the construction sector has slowed down from the growth rate it presented during the first months of the year. This year, inflation is expected to have a downward trend; however, it is also likely to remain at 4%, according to information from the journal El Economista.

Furthermore, 56% of the Managers of the Real Estate Sector in Mexico are optimistic about the recovery and stability after complicated years by the COVID-19 pandemic. The factors that mainly affected the industry were the effects of public policies in Mexico, the increase in interest rates, the economic effects of the pandemic, the potential economic recession in the USA, problems in the supply chain and the war Russia. – Ukraine.

With reference to project financing, the main developers feel supported by financial institutions. Sixty percent stated that they have had no difficulties or inconveniences in obtaining a bridging loan.

The Guadalajara metropolitan area shows the fastest growth in the unit price of new housing, with growth rates of more than 22%, making it the second city with the highest unit price, which is $35,269/m2, where more than 70% of active projects are for apartments. Likewise, this area maintains a trend towards verticalization and an increase in sales values. Industrial Development and Foreign Investment in the region are important mobilizers of economic growth and business generation. Mexico City has the highest unit value, mainly due to the high concentration of supply in high segments, according to data provided by the Federal Mortgage Society (SHF).

According to the publication Inmobiliare, Jalisco and the State of Mexico are considered the best states to invest in Real Estate, as they have capitalization ratios higher than 7%.

Guadalajara, the Cuauhtémoc District in Mexico City, Mérida, Querétaro and Naucalpan are the 5 areas of the country that top the list with the highest capitalization ratio when acquiring a property and renting it, being above 8%.

The office real estate sector is already showing signs of recovery, due, among other things, to the decrease in new constructions, the conversion of offices to other uses such as housing and hospitals, investments and improvements in existing buildings, and better leasing conditions.

The office construction industry depends on the economic performance, currently with the growth of exports to the United States, the dynamism of the industrial and Tourism Sectors.

In conclusion, for this year, a complex scenario is foreseen, mainly due to economic and political threats, but with great opportunities to reinvent itself and take advantage of the demand derived from nearshoring and other political-economic phenomena.

At VAHG we provide legal services with great experience and knowledge in the Real Estate Practice, being leaders in this Practice in Mexico. We are backed by a solid legal infrastructure with more than 30 years of combined experience, focused on timely assisting our clients with the commitment and integration within the legal framework in Real Estate.

For more information regarding our professional services, the Real Estate Team is at your service.

**The publication of this document doses not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.