As of today, the Federal Labor Law not only allows but regulates outsourcing in Mexico, enabling businesses to indirectly hire employees through a third-party provider. In addition, companies may deduct and/or credit the expenses derived from outsourcing, against their taxes.
During almost all 2020, COVID-19 has caused uncertainty and uneasiness on investors and dealmakers. Despite the concern the pandemic has generated in the market, the current administration’s policies for addressing the disease have been perceived rather faint and with scarce financial support and incentives for the private sector. As a result of the pandemic, striking a deal to merge, acquire or invest in Real Estate becomes challenging due to the social distancing and communication hurdles. Furthermore, uncertainty of how much assets, properties or businesses are worth the day after a possible transaction, and the fluctuation of material prices have caused a stall in these sectors.
On December 2012, an amendment to the Federal Labor Law (“FLL”) set forth the rules for the outsourcing of personnel regime (“Outsourcing”) in Mexico. According to that amendment, Outsourcing is defined as the regime in which a person or entity identified as contractor carries out activities or renders services in favor of another person or entity, the client, where the former has the right to set forth the tasks to be done to the latter and supervise the progress of the services or the execution of the contracted works. Due to its characteristics, this regime is an exemption to the general rule that ordinarily, the employment relationship shall be direct and for an indefinite term.
Our Firm is delighted to announce its participation in an authoritative publication on M&A and Private Equity activity in the Real Estate sector. Our specialists teamed up with Adam Emmerich and Robin Panovka of leading New York firm Wachtell, Lipton, Rosen & Katz, and contributed the chapter on Mexico.