During
the first semester of 2012, Mexicans’ direct investments abroad reached $11.5
billion. This is a record amount! In addition, it is the first time in the past
10 years that such amount exceeds the total amount of inbound direct investment. Here are the numbers:
First
Semester of 2001
Money Going
In: $8,718,110 million
Money Going Out: $319,640 million
First
Semester of 2007
Money Going In: $16,835,900 million
Money Going
Out: $5,083,960 million
First
Semester of 2012
Money Going In: $9,621,680 million
Money Going
Out: $11,498,900 million!
This
has several meanings. The first and most
obvious one is that Mexicans have money to invest. The second one is that they are hungry for overseas assets. And the third one, given the amount, is that the
receiving country or countries need to take those investments seriously.
The
initial legal factors that Mexicans investing abroad need to consider include,
among others:
-
What
type of entity to form?
-
Should
it be a holding entity, a subsidiary, or an independent entity?
-
In
which state should it be formed (e.g., Delaware v. California v. Nevada)?
-
Which
provisions should be included in the operating documents?
-
Will
the entity be owner managed or manager managed?
-
Will
they have any fiduciary duties as managers?
-
Are
there any immigration issues?
-
What
are the tax consequences?
-
Is
an exit strategy recommended?
-
What
dispute resolution mechanism should they select?
To
solve these and other questions and to remain compliant, Mexicans investing
abroad should receive competent legal advice on how to do business abroad, preferably by a bilingual cross-border attorney who understands the
nature of their business, their business culture, Mexican laws as well as the
laws of the target country, all applicable international laws, and how all of
these factors interact. More
importantly, the legal advisor should be someone with the ability to see – and understand
– the big picture, as treating each country’s business independently may lead
to inauspicious results.
Mauricio Leon de la
Barra is an international law attorney licensed to practice law in Mexico and
California, and has more than 15 years of experience representing clients in
cross-border business and real estate transactions and litigation involving
international, U.S. and Mexican laws