By: Luis Gerardo Ramírez Villela
As previously mentioned, the nearshoring practice is useful for international growth to the extent there is benefit from lower manufacturing costs, supply chain, labor costs and personnel qualification.
In this respect, Mexico is increasing its nearshoring business development in the present days and despite the fact of incorporating a Mexican subsidiary to start operations – which has been briefly explained in the previous articles - and in the future export to other countries, another option may be outsourcing the services to third parties located in Mexico for such purposes.
In such extent, prior to entering into any services agreement it would be highly recommended to carry out a due diligence review on the outsourcing corporation to assess any potential risks and avoid any potential conflict in the future.
Such due diligence should include, in an enunciative but not limitative manner, the review of corporate information and documentation, tax and regulatory compliance verification (including labor and social security matters), import/export permits analysis and litigation confirmation.
Once the due diligence is satisfactory you can then negotiate the terms and conditions for the services to be rendered, which can go from an exclusive distribution to the maquila and distribution of the products (including export).
Please consider that in both scenarios the terms and conditions to be negotiated may consider including exclusivity, non-competition and non-solicitation clauses, to be analyzed depending on the relevant market and the specific of the proposed interests by your corporation.
Audit clauses would also be necessary, to verify periodically how the outsourcing company is rendering the services and allow you to continue with the same processes or make any adjustments – as deemed convenient – in order to improve the outsourced services.
Likewise, dispute resolution must be considered and depending on the corporation with whom you would be contracting, arbitration clause may be advisable (this would be on a case-to-case scenario) and based preferably on the International Chamber of Commerce (ICC) rules.
In general terms, although nearshoring is a good option, legally speaking there would be several steps to be taken in order to have a good and valuable nearshoring service in Mexico.
