Mexico: Regional 2024 Doing Business In Update

Published on May 13, 2024

2024 Mexico Regional Update

Firm Name: Santamarina y Steta, S.C.
Authors: Paola Morales, Guillermo Moreno M.

1. How is the political environment impacting business in or with your country?

Notwithstanding that we are nearing federal and local elections, as is the case with several countries worldwide, several companies are installing and expanding in Mexico. Only certain major projects with a strict regulatory or governmental component are being halted or are not as quick as we would like. Also, we see regulatory agencies initiating inspection procedures, perhaps more motivated by collecting fines than by ensuring compliance. Autonomous regulators at risk of disappearing or being transferred to a centralized government structure, such as the National Transparency and Data Privacy Institute and the Federal Antitrust Commission, could be vocal and attempt to be placed in the spotlight. The National Transparency and Data Privacy Institute has been very active in initiating investigations, whilst the Federal Telecommunications Institute and the Federal Antitrust Commission have imposed historic fines and initiated several investigations, including one that seems to be targeting e-commerce and streaming platforms (i.e., Mercado Libre and Amazon).

2. Which countries have you previously collaborated with and do you see potential for future collaboration with on cross-border matters within the region?

We keep collaborating mainly in North America, considering the USMCA and our geographical closeness, but we believe that nearshoring is really an opportunity for all countries. Several Asian countries, particularly Korea and Japan, are arriving in Mexico or expanding their presence. South American countries could also take advantage of opportunities for manufacturers. We will defer to member firm Guyer Regules, but we hear that reform in Uruguay made it less attractive for certain holding companies to be incorporated there, so a structure involving different jurisdictions can be explored.

3. What legislation has recently changed or is changing that a potential international client should be aware of?

Environmental laws are becoming more strict and more strictly enforced. For example, water concessions are limited (water is scarce in Mexico), and atmospheric emissions are more controlled. Environmental authorities have initiated procedures to verify compliance with the regulations on the matter. Sometimes with reason, sometimes not. The use of electronic means for holding shareholders' meetings and meetings of the boards of directors has facilitated certain corporate matters. Also, using electronic means for certain negotiable instruments seems to be a trial run towards fully using these means in that area. This will facilitate the granting of financing and security interests. Also, as of May 1, 2024, 26 bills proposing how to regulate AI have been filed to the Federal Congress. All of them are under discussion, and it is very likely that in September, when the current Congress changes, the one(s) of the winning party are going to prevail.