Corporate
Corporate reorganizations, mergers and acquisitions, divestitures, and joint ventures.
All the legal requirements for your international business
The firm’s practice covers most types of commercial activity, including the areas of antitrust; financing, including banking and corporate finance; international business transactions; M&A; project finance; and restructurings. Our practice is predominantly cross-border, with domestic transactions playing also an important role. We are used to working in close cooperation with the legal department of our clients and with law firms around the world.
Banking & Finance
Advice on derivatives, including those related with interest rates, currencies, and equity-linked, among others.
Mergers & Acquisitions
Advisory services for acquiring and target companies, and performance of due diligence processes.
Energy
Tenders, regulatory body negotiations, financing, and energy regulation advice.
Economic Competition & Antitrust
Practical business advice and international commercial transaction negotiations.
Telecommunications
Legal research, analysis, preparation, and filing of concession applications.
Tax Planning
& Litigation
Tax planning and consulting, litigation, audits, structure design, and tax compliance.
Tourism & Real Estate Development
Portfolio management and payment-processing services.
CORPORATE SERVICES.
We cater to the needs of foreign investors exploring specific market niches in Mexico, as well as Mexican entities expanding their operations across Europe, North America, and Asia. We assist foreign companies in establishing branches, subsidiaries or representative offices, increasing their participation in the capital stock of their Mexican affiliates, or making strategic acquisitions.
Furthermore, our firm has extensive experience advising clients involved in contracts with the Mexican government. We provide support throughout the negotiation, execution, and implementation stages of the contracting process. Our approach is centered on safeguarding our clients’ long-term interests within a competitive environment, ensuring optimal outcomes.
BANKING AND FINANCE.
The firm helps financial institutions adapt to the changes in the Mexican markets. In addition to traditional commercial loans to Mexican corporations, many of which carry the guaranty of the parent company or some type of collateral located abroad. We have structured many cash-out transactions, as well as asset sales to financial intermediaries and to asset traders in the secondary market.
Restructures completed by the firm have involved credit enhancement schemes, such as those utilizing zero coupon bonds. Likewise, we have participated in complex tourist projects where creative schemes have been used to fund projects or secure their payment. Furthermore, in what has become a tool of increasing resort, the firm has assisted its clients in the design and implementation of various structured financing vehicles and transactions.
The members of Berdeja y Asociados have broad experience in exposure-management instruments, including. interest rate-, currency-, and equity-index or equity-linked derivatives, options, futures, forwards, caps, floors, and collars are among these instruments. We have specifically advised clients in connection with several derivatives transactions, both between Mexican parties who utilize “Mexicanized” ISDA forms and between Mexican and foreign residents under the ISDA forms. Several organizations, including ISDA’s Mexican Subcommittee, have prepared a “tropicalized” format Derivatives Master Agreement and Annexes. Such Derivatives Master Agreement follows the ISDA Master Agreement and has been properly adapted to Mexican law. Thus, a number of the primary players in the Mexican financial markets such as banks, large corporations, and government companies enter into derivatives transactions for hedging and/or speculation purposes.
MERGERS AND ACQUISITIONS.
The firm has represented both acquiring and target companies. The most delicate aspect of our work is the due diligence process. We are as comprehensive as possible and work in tandem with accountants and other consultants so that our clients make well-informed decisions based on the risks that are customarily assumed in these transactions. At the same time, we strive to minimize the annoyances and expenses inherent to due diligence processes. To this end, we identify the main legal, tax, and regulatory issues of each deal as well as alternative solutions thereto as early as possible in the process.
The long-term relationship that the existing and the arriving shareholders of a target company must develop is of particular importance in the context of an acquisition. While the primary focus of our efforts is the protection of our client’s interests, we are also mindful of the need to foster harmony between parties who are just getting acquainted with each other. An important element of this aspect is the efficiency in the preparation of the transaction documents and the timely filing of the regulatory approvals required for each deal.
The firm’s experience in mergers and acquisitions includes sectors as diverse as auto parts, advertising, bank-related services, confectionery, department stores, diesel engines, electronics, energy, equipment manufacturing, food, hearth and heating products, industrial inks, pharmaceuticals, retirement funds management (AFORE), semiconductor systems, steel, telecommunications, textiles, travel accessories, utilities, and window shades, among others.
ENERGY.
For decades, some key oil-related activities in Mexico were exclusively controlled by the government. Mexico’s energy law and infrastructure were inadequate for the needs of its vibrant economy. The business opportunities in this area depended on proper legislative amendments, many of which have materialized, although the conditions of the market, including those of an economic nature, are particularly challenging.
The firm has assisted its clients in projects involving the operation of natural gas distribution systems in Mexicali, Baja California, Chihuahua, Toluca, Río Pánuco, and Monterrey. The firm represented the winning consortium for the Mexicali tender, the first ever of this nature. The final documents for the Mexicali process were the result of constructive negotiations with the Energy Regulatory Commission (Comisión Reguladora de Energía, CRE) and have been utilized as a standard in subsequent tenders.
More recently and taking advantage of the deregulation of this sector, we have also represented companies in connection with wind-powered projects.
Both the regulator and private parties have strived to create a set of predictable and transparent rules for these tenders. As in any fledgling market, this has not been an easy task. Our clients, however, may derive great benefits from the firm’s experience with the CRE.
We are fully prepared to combine our financing expertise with our experience in the field of energy regulation for the benefit of our clients.
ECONOMIC COMPETITION AND ANTITRUST.
Although Mexico had an economic competition statute for almost 60 years, it was rarely enforced. In the midst of a more competitive atmosphere, a new competition statute became effective in June of 1993: the Federal Law on Economic Competition. This statute was abrogated by the Federal Law on Economic Competition (Ley Federal de Competencia Económica), which became effective on July 7, 2014.
Berdeja y Asociados’ main experience in the application of both the old and the new statute involves three areas: 1. Business practices in the financial sector; 2. Negotiations of international commercial transactions, such as joint-venture and distribution contracts; 3. Pre-merger (so-called “concentration”) notifications, which include stock and/or asset acquisitions. We have obtained positive results for our clients in all of these three areas and in the process, we have maintained a good relationship with COFECE, Mexico’s competition enforcement agency.
TELECOMMUNICATIONS.
Our firm has undertaken two projects in this industry in recent years. We have found creative solutions for the industries of global satellite telecommunications and wireless telephone, despite the often inadequate Mexican legal and administrative framework.
Our participation in satellite telecommunications has included low-earth orbit satellite networks. U.S. and other foreign entities have contributed infrastructure and capital by means of “tropicalized” term sheets and joint-venture arrangements. The timeframe for these transactions has responded to the need for uninterrupted cross-border services, which are rendered to major foreign clients. The projects imply the preparation and filing of concession applications as well as obtaining the approval of the regulator.
The wireless telephone deals cover the stages from legal research and analysis of the Mexican market to the acquisition of ongoing enterprises. These enterprises operate in a territory where the regulator has been reluctant to grant access to new market players.
We have met technical (non-legal) expertise requirements by means of intensive interdisciplinary teamwork with engineers and industry consultants.
TAX PLANNING AND LITIGATION.
The firm has vast experience in national and international tax planning and consulting, as well as in tax litigation at the federal and state levels.
As regards the M&A area, we have carried out tax audits as part of the general target or merged companies’ audits, seeking to detect all tax contingencies as early as possible. Once we have analyzed the legal consequences thereof, we create strategies to nullify or minimize their effects. We also cooperate with our clients to design the most efficient tax structure to acquire, sell, merge or spin off a company.
In general, our experience encompasses the preparation of joint venture agreements; transactions involving derivatives and other securities, credits and loans, trust, purchase and sale, leasing and financial leasing, service, manufacturing, distribution, technical assistance, intellectual property licensing, and other contracts, with an emphasis on our client’s compliance with the applicable tax laws and regulations. The experience of our members includes analysis and advice in connection with the laws, tax treaties, regulations, and rules applicable to, among others:
- Compliance with obligations such as those relating to income tax (impuesto sobre la renta) (ISR), special tax on production and services (impuesto especial sobre producción y servicios) (IESP), value added tax (impuesto al valor agregado) (IVA), real estate property transfer tax (impuesto sobre adquisición de inmuebles), government duties (derechos), etc., as well as their impact on various transactions
- Registration and compliance with obligations of not-for-profit organizations
- Use of tax breaks and benefits at the federal, state, and local levels
- Employee profit sharing (participación de los trabajadores en las utilidades de la empresa) (PTU)
- Share and ADR transfers
- Securities lending and repurchase transactions
- Incorporation of Mexican subsidiaries for foreign companies, determining their advantages and shortcomings vis-à-vis the creation of permanent establishments such as branches
- Corporate reorganizations in general, including taxation of mergers and acquisitions, as well as dissolution and liquidation of companies
- Determination of the most efficient tax structure for multi-jurisdiction agency, distribution, factoring, financial leasing, intellectual property license, service, technical assistance, and trust agreements, among others
- Registration of foreign banks and other financial institutions before the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público), in order to provide them with access to the lowest withholding tax rates
- Compliance with transfer-pricing obligations under both Mexican law and treaties
- Creation and management of family and real estate development trusts.
- As far as litigation is concerned, the firm’s experience includes matters such as:
- Constitutional proceedings (juicios de amparo) against various provisions of the Income Tax Law (Ley del Impuesto sobre la Renta) including, for example, those relating to tax deductions and cost of goods sold
- Challenging local laws on constitutional grounds. For example, we assisted a major client in successfully nullifying the government duties imposed in connection with the public registration of a bond issuance.
- Challenging audits conducted by various tax agencies.
TOURISM AND REAL ESTATE DEVELOPMENT.
In the area of tourism, the firm has represented foreign and domestic clients in major destination resorts, including hotel development, financing and operational matters, and condominium sales. Furthermore, the firm has considerable experience in all aspects of secured real estate lending, having represented financial institutions, developers, and investors.
For example, Berdeja y Asociados has participated in the initial implementation of a United States-based portfolio-management and payment-processing service for Mexican concerns. This work involved an exhaustive review of a broad range of disparate laws and regulations, as well as the creation of the bilingual documentation required to enable our client to assist Mexican real estate and tourism companies in their dealings with Canadian and U.S. customers.
Furthermore, the firm has participated in various prime developments in Los Cabos and other areas in Baja California Sur.
