MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Rebeca Sánchez and Mariana Santillán, Aziz & Kaye Business Law
• long-term, deeply integrated partnerships often favour the formation of a corporate JV; • exploratory or temporary collaborations may be better suited to a contractual JV; and • the perceived importance of each party’s contribu - tion to the project’s success can influence the level of commitment and, consequently, the chosen structure. Decision-Making Processes When a project requires frequent collaboration, dis - cussion, and agreement between parties on opera - tional decisions, a corporate JV often provides a more structured framework for governance. A corporate JV is typically preferred when partners anticipate the need for a robust, long-term decision- making framework that can adapt to changing project needs and partner dynamics over time. While a contractual JV can also include decision-mak - ing provisions, it may lack the formal organisational structure that a corporate JV provides. However, cer - tain contractual JVs, such as trust agreements, may include decision-making provisions and bodies in A corporate JV might be more efficient for allocat - ing profits and losses and for maintaining accounting records and tracking income and expenses, especially in projects with intensive operations. Liability Protection When selecting a JV vehicle, parties also consider associated risks and liability exposure. The corporate veil offered by a corporate JV typically provides an additional layer of protection for the parties involved. This may also occur in certain contractual JVs, such as trust agreements, where the execution of the agreement results in a legal structure that, through the intervention of a third party (such as the trustee), can carry out certain acts without the JV members directly intervening. However, in cases where one party primarily contrib - utes funds while the other handles operations and cli - ent interactions, a contractual JV might be preferred. which JV members participate. Allocation of Profits and Losses
This structure allows for clearer assignment of liability for fronting activities, including regulatory compliance, to the party performing these functions. Regulations In some scenarios, industry regulations are the decid - ing factor when assessing the most suitable JV vehi - cle. When foreign parties are involved and depending on the activity of the JV, foreign investment regula - tion should be reviewed to confirm that no provision restricts the participation of foreign shareholders and partners in the corporate JV’s capital stock. Additionally, certain projects, such as those derived from public bidding, may require the formation of a corporate JV to comply with regulatory requirements. 3. JV Regulation 3.1 Legal Framework and Regulatory Bodies In Mexico, there is no specific regulation governing JVs. The regulatory framework applicable to a JV transaction depends on the type of vehicle chosen and other factors. If the transaction requires approval by or notification to the National Antitrust Commis - sion, this authority will serve as regulator. In such cases, the main statutory provisions will be the Federal Economic Competition Law. For more information, see 3.4 Competition Law and Antitrust . All JV transactions are subject to general civil and commercial regulations. If the vehicle is a corporate JV, the primary statutory provisions will be the General Law of Business Companies. When a SAPI is involved, the Securities Market Law will also apply. Regardless of the JV structure, the vehicle will be bound to comply with other regulations, including labour, tax, environmental, financial, intellectual prop - erty, and data privacy laws, depending on its activities. 3.2 Anti-Money Laundering Compliance The main anti-money laundering regulations (“AML Regulations”) applicable in Mexico are:
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