GA‑Alliance Shares Key Takeaways on the EU–Mercosur Agreement
3 February 2026

GA‑Alliance – Global Legal and Tax Advisors presents the latest developments on the EU–Mercosur Agreement following its international webinar “The EU–Mercosur Agreement and the Future of Transatlantic Business”, held on 22 January 2026. The discussion brought together experts from Europe and Latin America to assess the agreement’s practical impact on companies, trade flows, and regulatory frameworks across both regions.

Signed on 17 January 2026, the EU–Mercosur Partnership Agreement introduces wide‑ranging commitments, from significant tariff reductions to strengthened sustainability, SPS and intellectual‑property provisions, as outlined by GA Alliance. Speakers highlighted the geopolitical relevance of the agreement, its potential to diversify EU supply chains, and the opportunities it creates in sectors such as energy, agribusiness, industrial production, and services.

GA‑Alliance continues to monitor the institutional process, including the pending review before the European Court of Justice, and provides integrated guidance to businesses navigating the evolving regulatory landscape.

A detailed briefing with country‑specific insights and legal analysis is available here: click to access the full document.

EU-MERCOSUR AGREEMENT: The future of transatlantic business

Table of Content

• Executive Summary
• State of the Agreement and Institutional Process
• Strategic relevance of the agreement for the EU
• Legal, trade and sustainability aspects
• Country perspective and sectorial implications
• Conclusions

Executive Summary

This document provides an update on the status of the EU–Mercosur Association Agreement following the seminar organized by GA-Alliance – Global Legal and Tax Advisors together with its partners in South America, held during the webinar on 22 January 2026 entitled “The EU–Mercosur Agreement and the Future of Transatlantic Business.”

The webinar event brought together GA Alliance professionals from Europe and Latin America, confirming the Alliance’s role as an international platform capable of connecting the two continents and offering an integrated analysis of the main developments in international trade, regulation, and tax strategy. The panel — made up of experts from Italy, Argentina, Brazil, Paraguay, Uruguay, Venezuela, and Colombia — discussed the practical significance of the agreement for European and Latin American businesses, examining commercial, regulatory, and operational implications.

The webinar also highlighted that the agreement, politically concluded after more than 25 years of negotiations, represents far more than a tariff deal: it introduces new sustainability standards, rules on intellectual property, procurement opportunities, and a regulatory framework that will reshape the economic axis between the EU and Mercosur. The gradual elimination of over 90% of customs duties could generate significant benefits for European and Italian exports, estimated at more than €14 billion.

GA Alliance, leveraging its global presence in over 80 countries and a multidisciplinary team of more than 2,600 professionals, continues to monitor developments in the agreement, offering an integrated perspective on the impacts for economic operators and investors, and translating a complex debate into concrete guidance for international stakeholders.

State of the Agreement and Institutional Process

The EU-Mercosur negotiation process began in 2000, following earlier exploratory dialogues and cooperation frameworks dating back to the 1990s. After years of intermittent negotiations, the parties reached a political agreement on 6 December 2024 on a comprehensive Partnership Agreement (EU-Mercosur Partnership Agreement, or “EMPA”), covering trade, political dialogue, cooperation and sustainable development.

Subsequently, on 3 September 2025, the European Commission adopted proposals for the Council to authorise the signature and conclusion of two parallel legal instruments: the EMPA and an Interim Trade Agreement (“iTA”), designed to allow trade commitments to be applied ahead of the full EMPA’s entry into force.

On 9 January 2026, the Council of the European Union formally adopted the decisions authorising the signature of both the EMPA and the iTA.

The agreements were signed on 17 January 2026 by representatives of the EU and the Mercosur countries (Argentina, Brazil, Paraguay, and Uruguay) in Asunción, Paraguay.

At this stage, the EMPA and the iTA are concluded instruments. However, their entry into force depends on further procedures: the EMPA must be ratified by all EU Member States and Mercosur legislatures, while the iTA will enter into force once the European Parliament gives its consent and the Council concludes it.

Currently, EU ratification of the agreement is suspended pending review by the European Court of Justice following a referral by the European Parliament in January 2026 over questions related to legal competence, the precautionary principle, and the structure of the agreement, a process that may take up to approximately 18-24 months.

Strategic relevance of the agreement for the EU

From the perspective emerging during the seminar, the EU-Mercosur Agreement was presented as a legal, political and institutional instrument with clear geopolitical relevance, capable of reshaping long-term economic leadership through rule-based cooperation.

Beyond trade liberalisation, the agreement was framed as a tool to reinforce the EU’s strategic presence in South America at a time of mounting global fragmentation and intensified competition from China. In an increasingly unstable geopolitical environment, the EU must diversify not only its export markets but also its sources of imports, while establishing solid contractual ties with reliable partners.

The Mercosur region comprises approximately 300 million inhabitants and represents a major trading area. The EU is Mercosur’s second-largest trading partner, while Mercosur is the EU’s tenth-largest trading partner. Historically, the EU remains the largest investor in the region, with European companies operating in Brazil and Argentina for over a century. In 2024, the EU accounted for 16.8% of Mercosur’s total trade. EU exports to Mercosur amounted to €53.3 billion, while Mercosur exports to the EU totalled €57 billion.

Mercosur’s main exports to the EU consisted primarily of agricultural products (42.7%), mineral products (30.5%), and pulp and paper (6.8%), whereas EU exports were dominated by machinery (28.1%), chemicals and pharmaceuticals (25%), and transport equipment (12.1%). In the services sector, in 2023 the EU exported €28.5 billion to Mercosur, while Mercosur exported €13.1 billion to the EU.

The agreement is structured around four main pillars (trade, investment, sustainability and cooperation) and is expected to generate estimated tariff savings of around USD 4 billion per year. The schedule of commitments reflects an asymmetric and gradual approach, with Mercosur granted up to 15 years to dismantle tariffs on around 90% of imports, while the EU would liberalise approximately 93% of imports from Mercosur within 10 years.

Over the long term, the agreement is expected to support industrial production, facilitate access to capital goods, enable accumulation of origin between the two blocs and foster intra-bloc trade, with positive GDP effects projected towards 2040.

Legal, trade and sustainability aspects

Food safety and sanitary and phytosanitary (“SPS”) controls are integrated into the agreement’s operational framework.

The EU already imports beef and other products from Mercosur countries, and the agreement maintains existing EU sanitary legislation while intensifying border checks. Only authorised slaughterhouses may export to the EU, subject to 100% documentary controls, supported by a rapid alert system among Member States and bilateral safeguard clauses to prevent sudden import surges or price collapses. The EU has also doubled available crisis funds for the agricultural sector.

Legal certainty is reinforced through references to the precautionary principle and WTO-aligned SPS measures, while the rebalancing mechanism (modeled on GATT framework) provides a structured dispute resolution pathway, allowing a party to request compensation if measures nullify expected benefits. These mechanisms underpin both predictability and enforceability, contributing to the robustness of the agreement.

Sustainability commitments are central, including legally binding obligations to halt deforestation and align with the Paris Agreement, Sustainable Development Goals, and Glasgow Leaders’ Declaration on Forests. The agreement also provides a platform for dialogue on the EU Deforestation Regulation and wider environmental initiatives.

Country perspective and sectorial implications

While the EU-Mercosur agreement sets a common framework, its economic and regulatory impact varies significantly across the member countries, reflecting differences in population size, industrial structure, and trade policies. Understanding these national perspectives is essential to grasp the practical implications of the agreement and the opportunities it creates for trade, investment, and sustainability initiatives.

• Paraguay benefits from extensive differentiated treatment designed to bolster its domestic processing and service sectors. The agreement grants an exclusive 10,000-tonne quota for organic sugar at a zero-percent tariff, alongside preferential 5% duties for critical auto part designations. To ensure stability, the framework provides extended timelines for trade defense and sanitary measures, including a two-year extension of the Generalised Scheme of Preferences (“SGP”) conditions for key exports like corn and yerba mate. By preserving national policy space for public procurement and amplifying service exclusions, the agreement facilitates integrated value chains in biofuels, honey, and oilseeds while fostering a robust market for sustainability certification services.

Argentina is positioned as a relevant dual energy partner for Europe, offering immediate and long-term solutions to the continent’s energy needs. In the short term, the country is set to supply natural gas and LNG from the Vaca Muerta formation under stable, long-term contractual arrangements. Looking ahead, the focus shifts to the renewable energy sector and green hydrogen, underpinned by the extraction of critical minerals such as lithium and copper. These initiatives are closely aligned with Europe’s decarbonisation agenda and are supported by the “Global Gateway” initiative. This framework facilitates technology transfer and attracts European investment into projects that strictly adhere to Environmental, Social, and Governance (“ESG”) standards.

Brazil, with over 210 million inhabitants, represents most of the Mercosur’s population and a leading global agricultural exporter. The agreement is broadly compatible with existing practices among large companies already aligned with EU standards, though smaller firms may need to adjust. Key improvements include the simplification and digitalisation of customs procedures, the mutual recognition of certifications, and a potential reduction of the “custo Brasil.” by mitigating the structural and bureaucratic burdens that historically inflate the cost of operations in the country. Additionally, the agreement fosters enhanced competitiveness through interactions with the current VAT reform. The analysis also covered consumer prices and investment decisions across sectors such as machinery, vehicles, fertilisers, and food and beverages.

Conclusions

GA-Alliance’s seminar showcased the value of practitioner-led, cross-regional analysis in breaking down the legal and economic complexities of the EU-Mercosur agreement. By providing a bridge between policy and practice, the discussion translated high-level trade objectives into concrete opportunities for the private and public sectors.

• The EU-Mercosur agreement constitutes a strategically significant instrument to reinforce the EU’s global competitiveness, diversify trade and supply chains, and secure access to critical resources and energy supplies.
• The agreement establishes robust legal, trade and sustainability mechanisms, including precautionary and SPS measures, rebalancing provisions, and enforceable climate and deforestation commitments.
• Differentiated treatment for specific Mercosur countries, combined with sectoral and investment provisions, supports agribusiness, energy transition, industrial production, and integrated value chains across the region.
• The agreement offers measurable long-term economic benefits, including tariff reductions, market access, investment opportunities, and enhanced cooperation on environmental and sustainability objectives.

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3 February 2026

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Cross Border Investment in Latin America

Mexico’s Digital Transformation: Paving the Way for Investment and Growth

In the digital era, optimizing government processes through information and communication technologies enhances government-citizen interaction, reduces corruption, improves administrative procedures, and drives national and foreign investment.

In this context, Mexico's federal government, led by President Claudia Sheinbaum, announced the creation of the Digital Transformation and Telecommunications Agency (Agency) in late 2024. Its mission is to modernize and unify the government's technological infrastructure, prioritizing digital transformation and administrative simplification.

As part of this strategy, the National Law for Simplification and Digitalization was introduced in January 2025, aiming to reduce government-procedure wait times by 50% through the digitalization of 80% of citizen services. This initiative not only seeks to enhance government-citizen interactions, but also removes barriers for domestic and foreign investors, aligning with international commitments such as the UN Sustainable Development Goals and the Trade Agreement between United States, México and Canada (USMCA).

José Antonio Peña Merino, head of the Agency stated that this strategy will extend beyond the federal level. Through the National Center for Public Technology, it will be expanded to state and municipal governments, fostering coordination to unify and expand the catalog of digital services nationwide.

National Digital Investment Window: Streamlining Business Establishment in Mexico

As part of this digitalization strategy, the federal government announced the launch of four Strategic National Projects aimed at modernizing and streamlining key procedures across various sectors:

1. National Civil Registry Platform
2. National Cadastral Platform
3. National Platform of the Public Registry of Property; and;
4. Digital Investment Window

Among these projects, the National Digital Investment Window stands out as a key initiative, aiming to integrate and centralize all necessary procedures for establishing and operating a business in Mexico. This fully digital and interconnected platform, spanning federal, state, and municipal levels, is designed to streamline business incorporation by reducing requirements, shortening processing times, and facilitating the creation of new corporations nationwide.

One of the key features of this platform will be the implementation of single digital files, enabling individuals and companies to manage multiple procedures without repeatedly uploading documents for each process. The Digital Investment Window will support strategic sectors such as tourism, automotive, aerospace, medical devices, energy, textiles and apparel, mining, chemical and petrochemical industry, information technologies and the pharmaceutical.

DataMéxico; Access to information as a key to invest in Mexico.

The digitalization of information and investor access in Mexico is not a recent development. Since mid-2020, the National Institute of Statistics and Geography (INEGI) and the Ministry of Economy have operated DataMéxico, a public platform designed to enhance digital access to key investment data by integrating a wide range of databases on trade, production, employment, education and demography, among others with high spatial resolution at the regional and municipal levels.

Beyond its role in data integration, DataMéxico incorporates a research component aimed at generating specialized analyses and public policy proposals to foster a more productive, diverse, and sophisticated economic structure. This initiative was designed to be developed in collaboration with national and international academic and research institutions, offering in-depth and transparent information to both domestic and foreign investors seeking business opportunities in Mexico.

Similar to other platforms in international markets, DataMéxico is freely accessible and has become an open source for investors assessing opportunities across various industrial sectors in the country. Its continuous updates, along with the implementation of the National Digital Investment Window, underscore the federal government’s commitment to advancing modernization and attracting foreign investment in 2025.

Finally, these initiatives not only enhance strategic decision-making for investors but also reinforce transparency and data integration, solidifying Mexico's position as a more competitive and appealing destination for global investment.

Plan México: President Sheinbaum’s Plan to Reaffirm Mexico's Economic and Industrial Prowess

In January 2025, Mexico´s newly elected President, Claudia Sheinbaum, unveiled the federal government's plan to invigorate investment within the country, as well as promote regional development from 5 key economic spheres: consumer goods, technology, tourism, automotive and energy.

This strategy, dubbed “Plan México”, was received with mixed reviews, being heralded by some as “the most daring industrial policy in the last four to five decades”, while others were less impressed at its seeming omission of labor and union sectors alike. Although even its most staunch critics could recognize its scale and ambition, as well as its significance to the country if actualized to its full potential.

The President placed great emphasis upon assuring Mexican citizens that the country, amidst widespread uncertainty, effectively has a cohesive strategy moving forward, one that aims to position Mexico at the forefront of economic and industrial development on a domestic and international scale.

The Plan itself is spearheaded by a list of 13 goals to be achieved over the course of the following years, namely:

1. Become the 10th largest economy in the world.
2. Raise the ratio of investment to GDP to over 25%.
3. Generate 1.5 million new jobs,
4. Manufacture 50% of domestic supply and consumption In Mexico in the textile, footwear, furniture and toy sectors.
5. Increase national content by 15%.
6. Ensure that 50% of public procurement comes from national production.
7. Develop vaccines made in Mexico.
8. Reduce investment-related procedures in Mexico from 2.6 years to 1 year.
9. Increase the number of additional professionals and technicians trained annually by 150,000.
10. Promote corporate environmental sustainability.
11. Provide 30% of SMEs with access to financing.
12. Become one of the five most visited countries in the world.
13. Reduce poverty and inequality.

So, what does this mean in terms of investment? The President seems keen on cultivating an impressive investment portfolio for the country. Plan México accounts for investments of up to $227,000,000.00 USD in order to achieve its goal of strengthening the economy and give significant boosts to the industrial sectors.

In recent years, Mexico has proved itself to be an industrial powerhouse, reaching a historic level of manufacturing exports, which during 2023 exceeded the manufacturing exports from China to the United States. “Mexico's victorious rise on the world trading stage and its impact on worldwide trade patterns looks to be a model for policy in this century” according to the Observatory of Economic Complexity (2023). Likewise, Mexico has become the most attractive market in the region in terms of advanced facilities, production, and skilled professionals. Industrial parks in Mexico grant investors in the manufacturing, automobile, logistics, and transport industries great advantages as opposed to other countries, having entered into 14 Free Trade Agreements, 30 Reciprocal Investment Promotion and Protection Agreements and 9 Trade Agreements and other international treaties that grant access to 1,350 million potential consumers.

While both the Mexican and American Presidents are currently on amicable terms, having staved off the imposition of tariffs for another month, it is yet to be seen what the next 6 years hold in store for these continental neighbors. Regardless, it seems as though Mexico is prepared to move forward and prioritize its own economic and industrial growth as The Supplier for the North American market.

USMCA’s Impact on Foreign Investment in Mexico: Key Challenges and Strategies

Since coming into effect in 2020, the United States-Mexico-Canada Agreement (USMCA) has reshaped trade and investment dynamics across North America. Replacing NAFTA, the agreement introduced stricter rules of origin and reinforced labor standards, particularly impacting the manufacturing and automotive sectors. By early 2025, these provisions have significantly influenced supply chains, production costs, and labor conditions in Mexico. Additionally, ongoing trade tensions, nearshoring trends, and the upcoming 2026 review of USMCA are shaping the strategic decisions of foreign investors. To remain competitive, businesses must adapt to these new regulatory requirements while navigating evolving market conditions.

Rules of Origin: Supply Chain Adjustments and Compliance Challenges

One of the most significant changes under USMCA is the tightening of rules of origin, particularly in the automotive sector. Vehicles must now meet a 75% regional value content (RVC) requirement, an increase from 62.5% under NAFTA, to qualify for tariff-free trade. Additionally, at least 70% of the steel and aluminum used in production must originate from North America. These rules are designed to strengthen regional manufacturing but have also raised compliance costs and forced supply chain restructuring. For foreign investors, meeting these requirements has meant shifting sourcing strategies, renegotiating supplier contracts, and absorbing higher production costs.

The automotive industry has responded by increasing North American sourcing, investing in regional suppliers, and relocating some production to Mexico, the U.S., or Canada. Meanwhile, other manufacturing sectors, including electronics, aerospace, and machinery, have also reassessed their supply chains to comply with the stricter origin criteria, ensuring uninterrupted trade access under USMCA.

USMCA also introduced groundbreaking labor provisions aimed at improving worker rights and wages, particularly in Mexico. The agreement mandates that 40-45% of a vehicle’s content must be made by workers earning at least $16 per hour, a policy designed to discourage the outsourcing of low-wage jobs. In addition, Mexico committed to labor reforms ensuring independent unions and collective bargaining rights, eliminating employer-dominated unions that had historically controlled negotiations. One of the most significant enforcement tools is the Rapid Response Mechanism (RRM), which allows the U.S. and Canada to investigate and impose trade penalties on factories that fail to comply with labor rights.

Since USMCA’s implementation, several labor disputes have triggered RRM investigations, prompting foreign companies operating in Mexico to enhance compliance measures. These new labor requirements have increased wage costs, unionization efforts, and regulatory scrutiny, making it critical for investors to integrate strong labor compliance programs into their operations.

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Despite these challenges, several multinational corporations have successfully adapted to USMCA’s new requirements. General Motors and Ford have taken significant steps to restructure their supply chains, shifting battery and semiconductor sourcing to North America to meet the RVC threshold. In addition, GM increased wages at its Silao plant in Mexico to comply with labor standards, ensuring smooth operations while avoiding RRM-related disputes. Similarly, in the manufacturing sector, Siemens Mexico has expanded partnerships with North American suppliers, reducing reliance on imports from non-compliant regions. The company has also revised labor policies to align with Mexico’s labor law reforms, strengthening worker protections and reducing legal risks. These proactive measures have enabled these companies to remain compliant while maintaining cost efficiency and market access under USMCA.

Key Takeaways for Foreign Investors

To successfully navigate USMCA’s regulatory landscape, foreign investors must adopt proactive compliance strategies. Conducting thorough supply chain audits is essential to ensure that suppliers meet the updated rules of origin and labor requirements. Additionally, engaging in proactive labor relations—such as ensuring compliance with Mexico’s labor reforms and implementing fair wage policies—will help businesses avoid trade sanctions and operational disruptions.

Given the potential for further modifications to the agreement, legal advisors and trade experts can help investors anticipate regulatory changes and adjust their strategies accordingly. By focusing on regional supply chain integration, strong labor compliance, and regulatory awareness, businesses can mitigate risks and strengthen their competitive position in North America.

USMCA has brought stricter rules of origin and enhanced labor standards, significantly impacting foreign investment in Mexico. While these changes pose compliance challenges, they also present opportunities for companies to enhance regional supply chains, improve labor conditions, and secure long-term trade benefits. As the 2026 USMCA review approaches, continuous adaptation and proactive compliance efforts will be essential for foreign investors seeking sustained success in Mexico’s evolving trade landscape.

In Mercantile and Commercial Matters, the First Chamber of Mexico’s Supreme Court of Justice rules favourably of exceptionally lifting the “Corporate Veil” between partners and the Company, when it is being used with the purpose of defrauding third parties.

On September 13th of 2024, the First Chamber of Mexico’s Supreme Court of Justice resolved upon an “amparo” trial (a specific legal mechanism within Mexican legislation that seeks the protection of constitutional rights against governmental overreach and other judicially mandated violations), filed by a legal entity against the local judges order in interim injunctions, to freeze their bank accounts and suspend any payments they were due to receive. These actions on the local judges' part, were taken in lieu of a financial institution's request to have the legal separation between the company and its partners, including the one that filed for amparo, be disregarded, so that the same measures could be applied to them as well.

After the District Jury dismissed part of the appeal filed against the local judge’s decision, and denied constitutional protection to the other, the plaintiff filed for a revision of the resolution, a measure that was subsequently taken on by the Supreme Court for the case to be decided upon.

In its ruling, the Chamber reflected upon the notion of the “corporate veil”, given that one the fundamental principle of corporate law is the separation of assets that in turn infers the separation between a company’s assets and responsibilities regarding their partners. This separation becomes a sort of guarantee that the company / commercial entity provides to its members to assure them that they will not be responsible for paying the company´s dues with their own money. On the contrary, the very company will do so with its own goods and if it were unable to do so due to insolvency, that partners would only be responsible up until the amount of capital they had contributed.

Having considered the aforementioned, the Chamber conceded that, while denying the guarantee of the asset separation between partners and company was to dismiss the autonomous legal nature of the commercial entity, impacts the law and the States main tool to strengthen growth and development as fundamental pillars of an economy, it is possible, though exceptionally and upon the foundation of good faith, to lift said corporate veil upon abusive and fraudulent use in the eyes of the law. This in order to avoid exploitation of a commercial entity’s legal personhood to the end of eluding legal obligations, setting asset separation aside, in order to understand the company’s authentic corporate and economic identity and its objectives, whether general or particular.

The Court does clarify however, that, given that it is a restrictive measure that can jeopardise a guarantee set up to protect the entity, its partners and in some cases, other companies with whom it may form a corporate group, lifting the veil must be understood as an exceptional measure, one of restricted application and secondary use. That is to say, setting the corporate veil aside is a measure that must be applied with extreme discretion with enough justification to overrule the founding principles that rule over a company. Furthermore, the decision to lift the corporate veil must take subjective elements into account, specifically factual context that can give away if a company’s intention is to hide it´s defrauding of third parties behind the veil.

As such, the Court ruled that the general rule would stay as it was, the corporate veil cannot be lifted in a preliminary injunction proceeding, since this shall only be an exceptional measure there must be reliable evidence (including factual context) of the need to disregard fundamental principles safeguarding the legal personhood of the company.

Imminent Labor Reform in Mexico

At the beginning of the year, Mexican president Andrés Manuel López Obrador proposed a series of legislative reforms, just months away from the end of his six-year term as head of the executive branch of government in Mexico. In total, 20 initiatives were presented, while 18 are constitutional and 2 secondary, their nature has been widely debated both on the national, as well as international stage. While certain aspects of the reforms remain under heavy scrutiny, other elements of the change have passed relatively unnoticed by comparison. Such are the constitutional reforms pertaining to the rights of indigenous and Afro-Americans communities, welfare, universal health care, prohibition of toxic substances found in vapes and unauthorized synthetic drugs, amongst others.

One aspect of this package that has captured the people’s attention is undoubtedly the reforms relating to labor and workers’ rights. As such the reforms seek to modify articles of the Federal Labor Law (Ley Federal del Trabajo) as follows: a) Reduce hours within the working week, taking day shifts from 48 to 40 hours a week and likewise night shifts from 42 hours to 35 hours a week; b) increase bonuses to be calculated upon 30 days instead of 15; c) prohibit practices that force workers to stay on their feet throughout their entire shifts by implementing mandated resting periods; d) increase seniority bonus from 12 to 15 days of salary per year of employment and lower the minimum eligibility period for said bonus upon termination of the work relationship from 15 to 13 years; e) create a housing system for workers through the Worker’s Housing Institute (Infonavit) so that said body can directly build real estate and place it at the disposal of its beneficiaries; f) increase paternity leave from 5 to 20 days of paid working days for workers who have recently had or adopted a child.

There are multiple additions to the catalog of benefits available for Mexican workers with formal employment. These measures are aimed at all workers, both those who work in office or in person in general, as well as workers who operate through telecommuting. For example, when workers carry out around 40 percent of their work remotely then the company is required to grant a monthly payment to each employee in the “home-office” modality to cover their internet service expenses and the proportional part of the electricity consumption. Similarly, companies must guarantee that said workers enjoy the same rights as if they were working in an office, such as breaks for breastfeeding or the right to disconnect once they have finished their workday.

Legislation surrounding occupational diseases also saw significant changes, as 88 new afflictions were included. This catalog allows physicians to diagnose work-related ailments in order to extend incapacities. This reform marks the first time in five decades that the list is updated and stands out for recognizing for the first time mental disorders (such as stress, anxiety, depression and insomnia), incorporating women's diseases such as endometriosis or infertility, increasing from four to 30 the types of cancer recognized as occupational risk, and increasing infectious and parasitic diseases, among which the inclusion of Covid-19 is noted.

As it stands, we are yet to see the full effects these reforms will have throughout the country. Nonetheless, the legal community remains steadfast in their endeavor to understand and shape the future of our constitutional framework as it develops and is actualized before our eyes.

The Importance of Corporate Governance for Business Longevity in Mexico

Recent data from Mexico’s National Institute of Statistics and Geography (INEGI) highlights that the country is home to 5.54 million businesses, with 98.7% classified as micro, small, and medium-sized enterprises (MSMEs). This represents a significant 28% growth since 2010 when 4.33 million businesses were recorded.

Despite this growth, challenges persist. INEGI reports that almost 52 out of every 100 businesses in Mexico shut down within their first two years of operation. In light of these figures, ensuring long-term viability is a major concern for most companies. Key to overcoming these obstacles is the implementation of effective Corporate Governance practices, particularly when it comes to managing internal relationships among stakeholders, family members, and employees.

A study by the CIFEM|BBVA Family Business Research Center at IPADE Business School, titled “Progress Levels of Family Businesses in Achieving Continuity and Harmony,” reveals that generational succession remains one of the toughest issues facing family-owned businesses. According to the research, half of these companies are at risk of instability because they lack clear succession plans. An additional 45% still have unresolved succession-related challenges, while only 5% of businesses surveyed in 2022 had an explicit strategy for transitioning leadership.

The introduction of Corporate Governance structures could help prevent companies from failing due to unclear responsibilities or succession processes. Setting well-defined rules and roles for everyone involved in the business is critical, especially for MSMEs aiming to thrive in the long run. Such governance strategies allow companies to separate family interests from business operations, which is essential for their continued success across generations.

Experts recommend several steps for implementing effective Corporate Governance. One of the top priorities is developing a robust succession plan that addresses future leadership transitions for second and third generations. This process should ideally be supported by external consultants who can help establish clear rules defining relationships between the company, its employees, and the family owners.

Establishing a Board of Directors and institutionalizing processes that align with governance principles—whether related to profitability, investment, diversification, or innovation—are also key strategies for strengthening Corporate Governance.

The benefits of such governance are wide-ranging. By creating structured decision-making bodies, companies can clearly define the roles and responsibilities of employees with measurable goals tailored to each individual’s performance. Furthermore, Corporate Governance promotes transparency, ensures better management of finances, and documents processes to create a well-defined organizational structure. Importantly, this approach fosters data-driven decision-making, reducing the influence of emotions on critical business choices.

Incorporating these measures will help prevent internal conflicts and encourage decisions that benefit the business as a whole rather than advancing individual interests.

Ultimately, implementing effective Corporate Governance plays a vital role in a company’s growth and continuity. It safeguards the interests of shareholders, ensures transparency in operations, and facilitates communication between family members, employees, and the company itself, making it an indispensable tool for long-term success.