Victor Manuel Muñiz Silva Head of Public Relations at HGAbogados.

You have most likely heard about the concept of "Nearshoring," which has exponentially gained popularity in our country in recent years, whether from a political, commercial, or economic perspective.

But, what is "Nearshoring"?

According to journalist José Ávila Muñoz of Expansión magazine, Nearshoring is the strategy by which a company seeks to relocate part of its production closer to its final destination (2023, para. 5).

In other words, Nearshoring involves moving production facilities from the country of origin to a nearby location near the final destination where costs are lower, including worker salaries, logistics, services, fuel, materials, and especially taxes.

Thus, a company that implements these measures and has well-established production and logistics chains will result in cost savings in transportation, reduced supply chain disruption risks, and, consequently, high-quality service.

With this, we can determine that Nearshoring is a practice that is here to stay in our country. Being considered a "developing country," it becomes an attractive option for companies from nations known as "powers," coupled with the fact that we are one of the two neighbors of the United States of America, considered by many (if not all) as the quintessential superpower.

Now, what challenges do we consider at our firm when it comes to Nearshoring?

Primarily, as experts in legal matters, we find that the main areas of opportunity lie in the fact that the foreign economic entity will enter an unfamiliar world where their investment must, at the very least, have the legal certainty of having the appropriate legal mechanisms.

Subsequently, the company will shift its essential priorities towards placing its investment in a new location. For example, the fiscal complexities involved in entering a new country (double taxation); labor regulation and outsourcing; corporate actions to support operations; preventing all fronts from a commercial and legal perspective; and finally, understanding the applicable immigration laws, both for the new economic unit and the shareholders themselves.

At HGAbogados, we specialize in providing advice and support throughout the process to anyone or any company interested in investing or conducting a transaction in Mexican territory.

How do we do it?

Under a legal prevention framework encompassing five minimum areas:

• Labor Law
• Criminal Law
• Corporate Law
• Administrative Law
• Tax Law

We recommend staying tuned to our social media channels, where we will be publishing more content about the aforementioned phenomenon known as Nearshoring.

Sincerely, Guadalajara, Jalisco, September 2023.