What type of activity can be carried out?

The Ministry of Economy regulates Foreign Investment in Mexico. There are reserved and restricted activities for foreigners; the reserved activities are those that are of exclusive exploitation to the Mexican State and the restricted ones are those in which a maximum percentage of participation of foreign investment is permitted or, if exceeding, an authorization from the State is required. Although these limitations exist for foreigners, the activities to which they apply are limited and are of specific commercial sectors such as firearms, transportation, education, nuclear energy, exploration or exploitation of oil, among others. ₁ Outside of these areas, foreigners have the freedom to participate in trade without any problem.

Mexican Company Formation

First, it is necessary to request authorization and availability of the desired name and purpose of the company before the Ministry of Economy. This allows maintaining the certainty that no other corporation will exist within Mexico with the same name and purpose. ₂ With this process, a unique code is issued that will be included in the Deed of Incorporation, a document that will be explained later. This task is sometimes carried out by the Notary Public who carries out the protocolization process.

Which brings us to the second step, the drafting and elaboration of the Deed of Incorporation of the company. This document is the most important one in any corporation since it establishes all the guidelines and identification details of the company, i.e. the name, company’s purpose, address, duration and nationality of its shareholders, and the rules of how the company will be governed, i.e. its administration, ordinary and extraordinary shareholders' meetings. It is necessary that the Deed of Incorporation include all the relevant points for the corporation since, in the event of any conflict, problem or even the distribution of dividends, the guidelines established in it must be followed. To be sure that this document is correctly written, we recommend consulting with a lawyer. The Deed of Incorporation must be accepted and signed before a Notary Public. This process is known as the protocolization of the Constitutive Act.

Finally, the registration of the company must be done before the different government agencies, which are the Public Registry of Commerce, which varies depending on the state in which the incorporation of the company was made, the Ministry of Finance and Public Credit, more specifically in the Tax Administration System and, finally, if it has foreign partners, in the National Registry of Foreign Investments. This affects the company as duly incorporated before third parties and can start operations.

It is important to understand that the process of hiring foreigners is completely different from the one explained here.

In Scornik Gerstein we are prepared to support you with the necessary process for the incorporation of companies in Mexico, as well as with any doubts and management that may arise during the process.

Written by Melina Ramírez.

₁ For a complete list of activities review the Foreign Investment Law in its articles 5, 6, 7 and 8.

₂ It is important to emphasize that the name is not equivalent to the brand, trade name or trademark registration.

Read more about Corporate & Commercial.

To set up a Spanish SL it is required:

1. A certification from Spanish Companies House (known as Registro Mercantil) to save the name of your company.

 

2. A bank account in order to deposit the company’s share capital.

 

3. To grant a Deed of Incorporation before a Notary Public. This Deed should express:
1. Shareholders’s identity
2. Contributions and share capital
3. Articles of association which should express the following details:
• Name of the company.
• Nature of business.
• Domicile.
• Share capital.
• How the company is going to be managed.
• How the company will make decisions.
4. Directors identity.
4. Shareholder’s NIF (Número de Identificación Fiscal or tax identification number). If the said shareholders are not Spanish, they will need to obtain a NIE number (Número de Identificación Extranjeros).

Once all the formalities are met and the Deed of Incorporation granted, the Notary will communicate this to the Registro Mercantil. Once this communication has been processed, the company will be officially incorporated and ready to trade.

Setting up a Spanish LTD raises a tax known as Actos Jurídicos Documentados. The amount to be paid by the shareholders depends on the Autonomous Community in which the company has been incorporated which ranges from 0.5% to 1.5% of the Share Capital value.

If you wish to obtain further information, please do not hesitate contacting us.

Written by Adria Moral and Beatriz Leiva. 

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There are plans of a transition period that will last 21 months, from the 29th of March 2019 to the 31st of December 2021, with the purpose of maintaining the rights of European immigrants during that time.

The British Government published the online procedure that European citizens living in the United Kingdom must follow during the transition period to qualify for the status of settled or pre-settled, depending on whether they have been living there more or less than five years.

Once granted, the applicant can continue living indefinitely and be treated as a British citizen in terms of health care, education, benefits and pensions.

The procedure will be fairly simple and fast and you just have to prove your identity, prove that you are a resident of the United Kingdom, confirm that you do not have serious criminal records and pay 65 pounds.

British diplomacy is trying to lay the foundations of an agreement with the other EU member states. All the proposals of the United Kingdom show the desire to maintain the instruments of cooperation within the EU as far as possible.

If there is no final agreement, the two-year transition period requested by London will not be possible, it will proceed according to the much more limited instruments of the conventions of the Europe Council and the Hague Conference, which means the Brexit and its consequences will advance considerably.

The worst consequences of a Brexit without agreement with the EU are without a doubt:

1. The free circulation of goods between the United Kingdom and the EU would end, since the companies that trade with Europe from the United Kingdom will have to carry out the same bureaucratic procedures that they now carry out with companies from outside the EU.
2. The increase in costs in the use of credit and debit cards in transactions between the United Kingdom and the EU.
3. It would affect the collection of salaries, loan and deposit services and insurance contracts since the United Kingdom would be left out of the EU's payment system.
4. The clients of banks established in the United Kingdom that reside outside the country will not be able to access financial services from those entities. This will happen both to individuals and companies of the European Economic Area and to those of British nationality residing abroad.

The situation is very complicated as the government of the United Kingdom and the European Union must chart a new course of separation and autonomy. We can only wait and hopefully the agreement will be the widest and most beneficial for both parties.

Written by Carmen García.

Read more about Immigration Law.

We can define it following the article 17 of the Unfair Competition act as any sale of goods or services carried out by an economic agent at a price that must necessarily be below the cost of acquisition or production, therefore it seems clear that what the act punish a certain behavior by which a competitor is capable of losing benefit in order to annul its closest competitor.

What requirements must be met for a commercial strategy to be considered a sale at a loss?

Spanish case law is unanimous when confirming that it’s a "loss to the direct competitor" so that a sale at a loss can occur. Following again article 17 of the Unfair Competition act it also requires the concurrence of three requirements:

1. a) It is liable to mislead consumers.
2. b) It must necessarily have the spirit of discrediting potential competitors.
3. c) In determined cases, also when it is part of an eradication strategy of a competitor or group of determined competitors.

The first requirement is established for all cases and seems to operate as an objective budget and there must necessarily be a loss in the sale in the same market as the competitor, and therefore mislead the final consumer.

Our personal opinion focuses on how illogical it is to think that an entrepreneur can systematically sell their products or services at a loss, if we take into account the constitutional right to freedom of enterprise, it would not be very logical to deprive the entrepreneur of his right to benefit consumers with such low prices.

Written by Lucio Morcillo.

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This type of divorce requires both spouses to agree to divorce, lived separately more than 1 year, non-existence of minor children not emancipated or with judicially determined capacity.

Today is not uncommon to find spouses living separately in different countries, having rebuilt their lives with another person, wishing to divorce so that can re-marriage their current partners.

In this type of situation, it is not easy or convenient, for one or both parties, to move to another country to ratify their decision.

Recently, in Scornik Gerstein Llp, we had a client with such a situation, one of them residing in Spain and the other one abroad and since it is a very recent and interesting topic; we would like to share our vision and experience in this matter.

The divorce deed will contain the spouse will to divorce and will always be accompanied by a Regulatory Agreement by which the existing economic regime will be liquidated.

To get divorce from abroad before two possible options will be considered; either granting a power to act by proxy or giving their personal consent at different times and before different notaries.

We have opted in this case for the second option ... Why?

Because is simpler and cheaper since no proxy is necessary to be appointed. We chose this second option because the only thing that is needed is finding notaries with jurisdiction as per the grantors’ domicile willing to collaborate.

The steps to follow to be able to divorce before two different notaries would be as follows:

1) The parties agree the content of the Regulatory Agreement.

2) One of the parties, from his/her country of residence, grants a Divorce Deed together with the Regulatory Agreement, before a notary of that country and assisted by his/her legal representative.

3) Such deed is legalized so that can be enforced in Spain.    

4) A copy of the Deed is sent to the other party and he/she, assisted by his/her lawyer, signs the same and exact Deed before the second notary public, inducing his/her consent and ratifying the will to divorce by mutual Agreement.

5) The receiving notary will submit both deeds to the civil registry corresponding to annotate the divorce.

The divorce will only take place as from the granting of this second deed, when a notary collects the statements of both spouses and declares the marriage dissolved.

Written by Carmen Garcia.

Read more about Family Law.

The Spanish Civil Code in its article 1101 clearly provides for those that provide services through a contract to compensate for the damages they cause by negligence when performing their contractual obligations.

Contrary to the general rule that a Claimant must prove its case, when conducting personal injury claims in Spain the burden of proof is reversed and only if the Defendant is able to prove that the accident occurred due to the Claimant’s own fault, the Defendant will avoid liability.

It is also important to keep in mind that there is a limitation period of one year to file a claim in personal injury claims. However, the clock will only start ticking the later of a) when the accident took place, b) the injured was aware of the injury or c) the injuries of the injured settled. 

Scornik Gerstein LLP has been assisting clients who suffered an accident in Spain and their advisors seeking for an opinion to help then conducting a claim before the UK courts since 1984. Please let us conduct your personal injury claim in Spain or provide you with our legal opinion about whether your personal injury claim would succeed in Spain.

Written by Koldo Perez

Read more about Personal Injury Law.