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.

Today, the concentration of companies in our country has become a strategy from market participants to achieve their permanence in the competitive and globalized environment, to cover larger foreign markets seeking to invest in Mexico´s businesses, minimize economic risks and solve various financial problems.

During the first 4 months of the year, Mergers & Acquisitions (“M&A”) transactions have reached a value of USD$7.800 million, which has been an exponential recovery to the decline we had in 2022, due to high interest rates and geopolitical uncertainty. Mergers and Acquisitions in Latin America fell back 35.9% compared to 2021, in a period analyzed between January 2 and December 26, 2022. On those dates in the region there were deals for USD$106.9 billion, while in 2021 the figure rose to USD$168.3 billion, according to data compiled by Bloomberg.

According to comparative data on Mergers and Acquisitions in Mexico for the year 2022, we could observe a sharp decline in corporate deals in Latin America, which affected our country, due to high global interest rates and the withdrawal of many investors from emerging markets due to the war in Ukraine and the reduction of exposure in China due to its erratic policies by Covid-19. Stock offerings dropped 61% in Latin America, representing USD$13.4 billion, according to data provided by El Economista.

With the temporary closures due to the pandemic, there was a lack of maritime shipments. As a consequence of the above, companies seeked to optimize their logistics and bring their production closer to the country with the highest demand for products, which is the United States (nearshoring). The so-called nearshoring, a phenomenon of reconfiguring value chains from one country of origin to another, has been occurring in Mexico for decades. Companies from around the world have come to Mexico mainly because of the skilled labor force, lower production costs and ease of logistics compared to neighboring countries, which has allowed Mexico to recover economically.

For example, the renowned brand Apple, due to pandemic and human rights issues in China, decided to diversify and not buy products assembled in that country, opting instead to move closer to Mexico and India. This has caused a huge migration of suppliers, the United States remains the most popular market, with a boom for several international companies, according to Grupo Expansión.

In June 2023, in terms of Mergers and Acquisitions in our country, one transaction was announced by Mexican companies abroad, representing a reduction of 2 transactions in regard to the previous month. Compared to the same period last year, the volume of transactions decreased to 4.

The industrial sector led M&A activity in June with 9 transactions, representing 13% of total transactions during 2023, followed by Real Estate, Mining and IT, according to data provided by Seale & Associates.

The Secretary of Finance and Public Credit, Rogelio Ramirez de la O, revealed that the Mexican economy has experienced a great boost thanks to the arrival of foreign companies, with nearshoring, resulting in investments that exceed USD$13,000,000,000.00 so far this year.

The number of agreements that have been reached with foreign companies has increased 47% so far this year. This translates into an increase of M&A in our country, reaching a value of USD$7,800 million in the first 4 months of 2023, an increase of 189% over the USD$2,700 million of the same period last year, according to Grupo Expansión.

According to the quarterly report by TTR Data and Bloomberg, Mexico ranks third in Latin America behind Brazil and Chile.

Brazil leads the ranking of the most active countries in the region with 1,075 transactions (down 30%) and mobilized capital of USD$25,234 million (down 38%). It is followed by Chile with 223 transactions (up 21%) for USD$48,995 million (down 23%).

Mexico remains in the same position in the ranking with 203 transactions (down 23%) and capital raised of USD$10,639 million (down 9%). The M&A sector in our country could recover even more in 2024.

Global companies, from diverse industries such as technology, finance, consumer products and manufacturing, have become interested in our country because of all the business facilities we offer, mainly Asian companies. U.S. Companies have always stood out in foreign investment, followed by European companies. The Asian companies, which mainly have stood out in the automotive sector in Mexico, are exploring more industries to exploit in our country.

The transactions that are currently trending in Mexico are not venture capital, but developed businesses or those with a strong and mature market of many years. Of the 47 transactions that were presented up to April, 16 were Mexican companies that made negotiations abroad.

One of the sectors that has most interested foreign investors is technology sector. The USA has been encouraged to produce electronic chips locally, they want to create a market in another country and not depend solely on Taiwan. Although Mexico has no plans to create foundries for the creation of these chips, there will be several adjacent industries that will benefit from this industry.

According to Grupo Expansion´s data, in the first four months of this year, the industries that have had the biggest activity and development in terms of M&A of Mexican companies abroad with 43.8%, Information Technology (IT) with 12.5% the Financial sector with 12.5%, Consumer Products with 12.5% and Telecommunications with 6.3%.

Strategic acquisitions of U.S. transnational companies are the most frequent, above private equity. The Mexican Government is trying to favor the emergence of industrial parks by extending to Oaxaca or Veracruz, through the Isthmus Train Project and several business incentives.

In VAHG we provide legal services with great experience and knowledge 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 promptly assisting our clients with the commitment and integration to the legal framework of Mergers and Acquisitions Practice.

For more information regarding our professional services, the M&A Team is at your disposal.

Fernando Hernández Gómez | Partner

Mergers & Acquisitions

                                                                                                +52 (33) 38171731 Ext 225 | fhernandez@vahg.mx

**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.

In terms of foreign trade, nearshoring is the strategy by which companies relocate their operations to a nearby country, with a similar time zone, in order to make their supply chain more efficient, speed up delivery times and reduce costs, generating benefits for both parties, creating jobs and boosting the country’s economic development.

Nearshoring accelerated with the arrival of the COVID pandemic, a phenomenon that brought with it many mobility restrictions, border closures and delays in the flow of raw materials and finished products.

According to a Deloitte study, this market is expected to grow at a compounded annual growth rate (CAGR) of 10.3% by 2025. Likewise, according to the Inter-American Development Bank (IADB) prognosis, Latin America and the Caribbean could increase global exports by USD$78 billion each year, of which USD$35.3 billion correspond to Mexico, that is to say 45%.

Some transnational manufacturing companies that have recently moved or are in the process of moving their operations from China to Mexico are: Yasaki, Foxconn, Panasonic, LG Electronics, Samsung, Intel, Tesla, General Motors, Ford Motor Co; Honeywell, Siemens, ABB, Eaton and Schneider Electric.

In addition to the manufacturing sector, which is in high demand worldwide, there are other industries that benefit from nearshoring, such as the technology industry, the automotive industry, the electrical industry and the electronics industry. Small and medium-sized companies in Mexico benefit greatly from this trend, especially those that have the capacity to become suppliers of companies that relocate their operations to our country.

Most economies no longer want to depend on Asia, Mexico is a country with a very interesting geographic location, furthermore being a country with many resources, its main border is with the United States, which makes it a country with an important strategic position.

Unfortunately, Mexico is only taking advantage of 15% of the total number of companies relocating to Latin America.

With the pandemic, offshoring logistics were greatly affected, since many of the U.S. suppliers are in Asia, including China, the predominant one. The interruption of operations in this country, as a result of the pandemic, demonstrated the great vulnerability of offshoring, due to the exclusivity of suppliers in these countries.

Faced with this situation, Mexico has been gaining ground, U.S. companies are increasingly adopting nearshoring and are concentrating on our country. One of the most recent cases is the company “Shein”, a global fashion giant, which has just announced the opening of a production plant in Mexico. Part of the retailer’s strategy to take advantage of nearshoring is to have another production center outside of China, reducing shipping times and lowering distribution costs for Shein’s customers in Latin America.

The state of Jalisco is the national leader in nearshoring. Guadalajara registered the highest demand for nearshoring during the first quarter of the year, with more than 77 thousand m2 marketed, positioning itself among the preferences of potential investors above the northeast region with cities such as Monterrey and Saltillo. The Government of Jalisco reaffirms its commitment to the implementation of diverse strategies to promote nearshoring as the public policy Jalisco Tech Hub Act to be a leader in Mexico and Latin America in the development, conversion, attraction and retention of talent through innovation and high technology.

Another example of nearshoring is the arrival of Tesla in Mexico, in Nuevo Leon, where foreign investment and reindustrialization in areas close to the United States was boosted. Nuevo Leon is becoming an electromobility hub in Mexico, which is why the Americas Mobility of the Future, an event dedicated to the mobility of the coming times, intelligent transportation, infrastructure and sustainable logistics, will be held. Nuevo Leon has benefited greatly from nearshoring, and expects to close the year attracting 8 billion dollars in foreign investment, twice of last year’s figure.

According to PwC Mexico analysts, the Ministry of Finance and Public Credit has already announced that it will not present changes to tax laws in order to guarantee legal certainty and attract Foreign Direct Investment, thus taking advantage of nearshoring after the breakdown of value chains worldwide.

The Tax Administration Service (SAT) is aware that there are between 40 and 800 companies based in Asia that intend to move to Mexico. The Inter-American Development Bank (IDB) projects that Mexico could add USD$35 billion in exports as a result of the relocation of supply chains. The additional amount is equivalent to 2.6% of the Gross Domestic Product (GDP) and is higher than the estimated of the rest of the 25 economies that the Americas will receive as the total sum, according to the information provided by El Economista.

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.

Today, August 9th, is the International Day of the World’s Indigenous People. Because of the importance they represent, the General Assembly of the United Nations decided in December 1994 to designate this day for this celebration.

Indigenous People are custodians of a great wealth of traditions, languages and cultural expressions that are very characteristic of their places of origin. Particularly in Mexico there are more than 11 million indigenous inhabitants distributed in more than 60 towns, who speak more than 300 linguistic varieties and are protected by Article 2 of our Constitution, since they conserve their own social, economic, cultural and political institutions.

Recently, the term “cultural appropriation” has emerged, which is intrinsically related to the collective cultural expressions of Indigenous People, since it is understood as the adoption or use of elements of a culture by members of another community, usually without understanding or respecting its meaning, and even without the consent of the members of the original culture, which can be perceived as a disrespectful or exploitative attitude.

On January 24th, 2020, the Federal Copyright Law (“LFDA”) was amended, including the Chapter “On Popular Cultures and Traditional Cultural Expressions”, which in summary protects the exploitation of those copyright works derived from popular cultures or expressions of traditional cultures, belonging to the indigenous people and communities referred to in Article 2 of the Constitution.

The procedure foreseen in the LFDA establishes that as in any copyrighted work, recognition must be granted to the original author, in addition to the need to obtain written permission from the community or people to which a certain traditional cultural expression belongs to. Additionally, it is foreseen that in case there is any doubt as to the community or people to whom written authorization must be requested, support may be requested from the Ministry of Culture, accompanied by the National Institute of Indigenous People.

Even the Ministry of Culture itself can issue a technical opinion to authorize the request to use a traditional cultural expression, being in turn, part of the collegiate body that can resolve disputes in this matter.

In addition, the United Nations Declaration on the Rights of Indigenous People in its Article 31 mentions the following:

1. Indigenous people have the right to maintain, control, protect and develop their cultural heritage, traditional knowledge, traditional cultural expressions and the manifestations of their sciences, technologies and cultures, including human and genetic resources, seeds, medicines, knowledge of the properties of fauna and flora, oral traditions, literature, designs, sports and traditional games and visual and performing arts. They also have the right to maintain, control, protect and develop their intellectual property of such cultural heritage, traditional knowledge and traditional cultural expressions.
2. Together with indigenous people, the States shall take effective measures to recognize and protect the exercise of these rights.”

This Declaration of the General Assembly is not a normative instrument of international law; however, it is a document that accredits the commitment of some Member States to carry out internal measures (at the national level) to implement the principles of law contained therein.

It is a source of pride to have legal regulations that seek to give visibility and protect the expressions of the Indigenous People and their Culture, in order to prevent the dilution of their valuable traditions and crafts that ultimately represent a country rich in culture and plurality.

In VAHG we provide Intellectual Property services related to copyrights and the necessary counseling to be able to respectfully and legally use the traditional copyright expressions of the Indigenous People of our country. For legal advice you can contact our Intellectual Property Team.