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Tuesday, June 14, 2016

Mexico continues to make improvements to the legal and regulatory framework in favor of private equity

Mexico continues to open up new sectors of the economy to competition and investment. Reforms around pensions systems and securities regulations, together with government support for incubators, are helping unlock local pools of capital to invest in private equity. 
As noted by the Emerging Markets Private Equity Association (EMPEA) in its 2016 report:
-        Mexico’s stability, notwithstanding the drop in oil prices, is contributing to Mexico’s appeal to private equity investors.
-        Mexico’s growth is considered slow but steady, which investors find enticing.
-        New regulation allowing Retirement Funds’ investment in private equity through the public placement of capital development certificates (CKDs); the creation of new instruments, such as the FIBRA E, and the investment projects certificates (CERPIs) which attract global investment managers by providing more flexibility in the investment decisions of the fund; and other reforms in taxation, education, energy sector ownership and free competition sent; have been fundamental to the development of the private equity market in Mexico.
Despite these signs of grown and stability, investors looking to protect and maximize the value of their investments should keep in mind the importance of (a) understanding Mexico laws and business practices, (b) having adequate corporate compliance policies and systems that ensure compliance with Mexico and US laws and regulations, and (c) including flexible exit strategies.

Rebeca Sanchez has extensive experience practicing corporate and finance law. She advises Mexico and international clients on a variety of matters, including foreign investment, corporate restructuring, minority rights, mergers, acquisitions and joint ventures, data protection, and public and private financing, such as the incorporation of private equity funds. Rebeca is licensed to pracice law in Mexico.

Mauricio Leon de la Barra has more than 15 years of experience advising and representing individuals, family offices, private equity firms, and domestic and international corporations, in a wide range of domestic and cross-border matters. He also advises and represents law firms, receivers and trustees in cross-border matters involving Mexico assets or Mexico law. Mauricio is licensed to practice law in Mexico and California.