Corporate Articles

October 19, 2021
Legal Planning and Choice of Entity for the Non-U.S. Investor

Forming a Company in the United States

By Carrie Osman

Determining the appropriate corporate structure for a U.S. entity with international owners involves factors such as limiting liability, tax considerations and often specific requirements for U.S. immigration and visa needs. A planning phase is advisable for foreign parties, which planning involves the participation of U.S. corporate counsel, accountants and fiscals advisors from both the U.S. and their home country, as well as their U.S. immigration counsel, if applicable. Decisions on choice of entity, ownership structure and place of formation can significantly impact international tax consequences and the company’s future. Below is an overview of some of the main considerations in forming a U.S. entity.    1. Choice of Jurisdiction.  In the U.S., company formations are governed by state law, and … read more

March 19, 2019

Piercing the Corporate Veil in Mexico

By Adrián Salgado

In November 2018 the Third Collegiate Court on Civil Matters of the First Circuit published judicial decision number I.3o.C.340 C (10a.) entitled: “Corporate Veil. Justification for piercing the corporate veil.” In this decision, the Court ruled that piercing the corporate veil is justified when parties use the corporate form in an otherwise legal and valid manner for improper ends or to avoid legal obligations or liability.

May 2, 2018

Amendments to Mexico’s General Law of Business Associations Applicable to Corporate Dissolutions and Liquidations

By Iker Diéguez y Fernanda Revilla

A decree published in Mexico’s Official Journal of the Federation on January 24, 2018 amended and supplemented numerous provisions of the Mexican General Law of Business Associations. Such changes are designed to simplify the process of dissolving and liquidating Mexican business entities and will enter into force on July 25, 2018. Consistent with the Mexican government’s efforts in recent years to facilitate legal procedures, reduce costs and eliminate complications in the formation of new companies in Mexico, the new amendments add a simplified process through which eligible entities may close down their operations in an easy, fast and cost-free manner, and thus provide legal certainty and closure for their shareholders or partners and third parties alike.  Note, however, that the … read more

January 12, 2018
Criminal Liability of Corporations in Mexico and the Need to Comply with the National Code of Criminal Procedures

Criminal Liability of Corporations in Mexico and the Need to Comply with the National Code of Criminal Procedures

By Sandra Campillo

In recent years, due to the growing development of the international economy and markets, technological innovations and corruption, the number of cases in which crimes are committed in the corporate and business context by organized criminal groups and not by individuals have increased. Such acts committed by criminal groups include those committed by Mexican entities, such as corporations, which can be structured in a complex manner in order to perpetrate various illicit acts.  Such illegal acts include money laundering, urban development crimes, environmental crimes and economic crimes, among others. In Mexico, prior to the publication in 2015 of the National Code of Criminal Procedures, companies could not commit crimes and, consequently, not be held criminally liable. Now, with the implementation … read more

December 15, 2016

New Registration System for the Certification of Companies: Permanent Compliance of Obligations to Maintain Certification, by Edmundo Elias and Marisol de León

Prior to January 1, 2015, companies that introduced goods under temporary importation customs regimes, such as the IMMEX (Maquila) Program, in bond deposit for the assembly and manufacture of vehicles, in-bond premises and strategic foreign trade zones, had the benefit of importing goods temporarily to carry out their production process or service, without paying the value added tax, and, where applicable, the Special Tax on Production and Services for said imports. On December 11, 2013, the addition of Article 28-A of the Value Added Tax Law and the reform of Article 15-A of the Law on the Special Tax on Production and Services were published in the Official Journal of the Federation, which established that companies that operate under any … read more

May 7, 2015

Relevant Aspects and Current Situation of Pemex Following the Implementation of the Energy Reform

By Antonio Franck

In the midst of Mexico’s implementation of the energy reform, and the complicated situation with the fall of oil prices, the internal restructure and the development of investment projects by Petróleos Mexicanos (Pemex) remains at a halt. For the past several months, the private sector has drawn up new strategies and alliances in search of opportunities for investments due to the opening of the sector, while preparing to compete for the best technical tools and financial strategies. Pemex appears to be facing the competition alone and is also faced with converting itself into a productive state entity. Its biggest challenges are the following: (i) a lack of clear investment objectives; (ii) financial debt and employment liabilities such as pensions and … read more

April 7, 2015

New Federal Regulations for Health and Safety in the Workplace

By Javier Zapata

On November 13, 2014, the Mexican Department of Labor and Social Security published, in the Official Journal of the Federation, new Federal Regulations on Safety and Health in the Workplace (the “Regulations”), which came into force on February 13, 2015. On the same date, the Federal Labor Regulations on Safety, Hygiene and the Work Environment were repealed, which had been in force since 1997. The purpose of the Regulations is to ensure the right to perform work activities under conditions that safeguard the life and health of workers. However, it should also be noted that the Regulations establish additional obligations, including fines, which were increased to the same degree that penalties were increased in the recent reform to the Federal Labor … read more

October 18, 2014

Recent Jurisprudence – Trademarks. Foreign Language

By Adrián Salgado

Recently, the Full Session on Administrative Matters of the First Circuit of the Supreme Court of Justice of the Nation approved legal opinion number PC.I.A. J/23 A (10a), titled: “Trademarks. The Mexican Institute of Industrial Property has the authority to translate words in a foreign language that are submitted for registration in order to determine their viability for registration.” In this legal opinion, the court resolves, by contradictory legal opinion, that the Mexican Institute of Industrial Property may translate words submitted for registration that are in a foreign language in order to determine whether such may be registered through means of the trademark examination procedure. The foregoing applies, considering that section XXII of Article 6 of the Industrial Property Law … read more

June 10, 2014

Mexican Business Law Reforms

By Marimar Pérez-Cacheaux and Raymundo Vazquez Hernández

On June 13, 2014, numerous reforms to various business laws  were published in the Official Journal of the Federation, which included, among others, the Commercial Code, the General Law of Business Associations, the Law of Investment Funds and the General Law of  Instruments and Credit Transactions. The following highlights some of the most important changes included in such reforms:   Creation of an Electronic Registry: An electronic Public Registry of Commerce has been created and shall operate with an information protocol by means of which the capture, storage, custody, security, consultation, reproduction, verification, administration and transmission of registry information will be maintained. The Department of Economy has one year from the publication of the reform to create the electronic system, … read more

October 11, 2013

The Trend Toward Piercing the Corporate Veil in Mexico

By Armando Quintana Freg

  The most recent edition of the Mexico’s Weekly Federal Court Reporter (August 2013) notes that the Fifth Collegiate Court in Civil Matters for the First Circuit has issued multiple opinions on the subject of piercing the corporate veil of a Mexican entity. Such opinions show a new trend that establishes, in essence, that an entity’s corporate veil or shield of liability can be pierced when it can be shown that the use of such “business entity” is abusive, and that its sole purpose is to prejudice the rights of third parties. Business associations, whether their owners are other entities or individuals, have been a preferred vehicle to undertake speculative commercial activities. This is the case because of the advantages … read more