Is your company prepared to adapt and face the changing foreign trade dynamics that the world faces daily?

With 65 votes in favor, the Plenary Session of the Senate approved the decree amending, repealing, and adding certain articles of the Securities Market Law and the Investment Funds Law (the “Amendment”).

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Is your company prepared to face the new challenges presented by changes to labor laws in recent years?

There has been much discussion regarding ‘nearshoring’ as a strategy for moving or relocating value chains, manufacturing, production, or business processes to other locations. This practice has taken off again with greater momentum as a result of recent circumstances such as the trade war between the United States of America and China, the global pandemic COVID-19, the war between Russia and Ukraine, and other international geopolitical conflicts; including the practical and logistical difficulty of international transportation and its increased cost in recent years, and the shortage of certain raw materials.

Many economic agents have found it necessary to implement this business model in order to obtain economic and logistical advantages (such as bringing the production of goods closer to the final customer's destination), to save costs and reduce expenses (e.g. labor), to have better products, and to create new business relationships.

Nevertheless, in practice it has been noted that nearshoring is, in addition to a commercial strategy, an economic, legal and cultural model. Therefore, its implementation must also consider cultural differences and applicable local law.

Mexico is attractive to foreign investment, partly due to the Treaty between Mexico, the United States and Canada (“T-MEC”), and other trade agreements and treaties entered into by Mexico, which has helped to increase the competition of players in the domestic market - showing better response times and achieving the mitigation of risks in the production chain by consolidating the distribution chain of agents relocating their business centers to Mexican territory.

It is essential for each company, agent or investor to analyze several legal aspects, including the business model to be implemented in Mexico and the market to be served (e.g. labor, immigration, corporate, foreign trade and customs, regulations, energy, real estate, trademark protection, intellectual property rights, among others) in order to design different alternatives to make the right decisions.

Considering the foregoing, the following are some essential points and issues that should be considered when implementing strategies such as nearshoring in Mexico.