Navigating the Legal Landscape for Nearshoring in Mexico
In this podcast, José Ramón Ayala and Daniel Legaspi of Santamarina y Steta discuss the essential legal requirements, intellectual property considerations, regulatory factors, and strategies for successful nearshoring ventures in Mexico.
The key legal requirements for establishing a nearshore operation in Mexico
One of the most important requirements to establish a nearshore operation in Mexico is to incorporate as a Mexican entity correctly. This simplifies regulatory compliance and enables the proposed business to qualify for potential tax incentives and mitigate legal risks.
Intellectual property considerations when soft-landing in Mexico
The companies that are aware of their IP, in order to make a soft landing, normally think about protecting their IP 2–3 years before entering into any specific country. The speakers say that the most important thing in a soft-landing transition is to be very aware of the IP rights that you have in your country and determine if this can be expanded to other jurisdictions such as Mexico.
“If a company needs to protect, or is thinking of protecting, their inventions and they have not thought about it in the past, it is likely that the inventions will not be protected in Mexico due to a lack of novelty, which is an essential requirement to protect inventions in our country.”
Mexico’s regulatory environmental impact on manufacturing, technology and services
The regulatory environment of Mexico does not necessarily affect the industries of manufacturing, technology and services, but rather it provides order and clear rules for the participants in those sectors and in all of the sectors of the Mexican economy. But, for the manufacturing industry, the USMCA, being the agreement between Mexico, the United States and Canada, provides certain preferential market access to the United States and Canada for those companies carrying out manufacturing operations in Mexico.
The potential legal risks and challenges associated with nearshoring in Mexico
A considerable risk that investors may face when coming to Mexico is that the businesses that they intend to carry out are not well-known. To mitigate that risk, what the speakers always recommend is to have agreements in writing as may be required pursuant to the law. There are certain agreements that can be executed privately, while others require the appropriate legal witness to have complete legal protection.
Concerning technology, and specifically regarding sharing industrial secrets, meaning confidential information that is very sensitive for the company and brings economic or competitive advantage, you have to maintain all the efforts that were applied in the country of origin to retain secrecy. Otherwise, it is very risky because if there is any breach of information, the company may lose the industrial secret not only in Mexico, but in the country of origin as well.
Santamarina y Steta
