Jose Miguel Zozayacorrea, managing partner of Baker & McKenzie’s Guadalajara office, tells Nearshore what makes Guadalajara an attractive place for foreign investors and why new reforms have the potential to significantly improve the fundamental economic landscape of Mexico.
NSAM: What is your role with Baker & McKenzie Guadalajara?
Zozayacorrea: We opened the Guadalajara office in 2000 and I became a partner in 2002. For the last seven to eight years, I’ve been the managing partner of the Guadalajara office. We started with seven to eight people and now we have more than 80 staff. I’m trying to expand the office, promote our expertise and promote value-added services in the region. Besides this, I also have other business and pro-bono roles. In September 2013, I was elected chair of the Guadalajara Chapter of the American Chamber of Commerce, another role that sees me work closely with the US Consulate in Guadalajara.
NSAM: Tell us about your relationship with the US Consulate.
Zozayacorrea: We have strong ties with the US Consulate because Bake McKenzie was founded in the US. Our founders John McKenzie and Russell Baker set up the firm in Chicago and now we are a multinational law firm in more than 56 countries worldwide. We have five offices in Mexico: Tijuana, Juarez, Guadalajara, Monterrey and Mexico City. And we recently opened the latest office in Latin America in Lima, Peru. We also have Latin American offices in Venezuela, Colombia, Brazil, Argentina and Chile.
With this type of leverage we can provide companies coming from the US a much greater capability to do business in Mexico and across Latin America. So we are one of the law firms recommended by the US Consul and the Trade Consul. This is the first time the US has had two consuls in Guadalajara: the Consul General Susan Abeyta and the Trade Consul Linda Caruso. We have a strong relationship with them; we work closely on trade missions and share legal information.
NSAM:Are most of your clients from the US?
Zozayacorrea: Yes. Around 65 to 68 percent of our clientele in Guadalajara are international companies – mainly from the US, but also some from Spain and Germany and a few from Chile and Brazil.
NSAM: What attracts global firms to Guadalajara?
Zozayacorrea: Guadalajara is considered one of the most attractive cities in Latin America and the people here are very friendly. It is one of Mexico’s three most important cities, along with Mexico City and Monterrey, but the cost of living is cheaper in Guadalajara. It is a big city, home to more than six million inhabitants and many important businesses. It has a lot of infrastructure and is well prepared to receive investment. The area is also ripe for tourism investment, with traditional tourism along the coast of Jalisco and medical tourism in Guadalajara, which has good medical infrastructure.
NSAM:How easy is it for a global corporation to set up operations in Guadalajara?
Zozayacorrea: Setting up a company in Mexico is very simple. It’s not as difficult as in some other Latin American states. It’s something that you can do in a couple of days. When setting up a company in Mexico you have to take into account the federal and local considerations. Setting up operations falls under federal jurisdiction. From a corporate perspective, there is almost no difference in setting up operations in Guadalajara or any other part of Mexico – except for minor tax differences at state and municipal level.
NSAM: Are there any problems or complications in this process?
Zozayacorrea: The number of permits and licenses needed to set up a business is something that we can improve in Mexico, but in the case of Guadalajara and the state of Jalisco, the new governor has promised to reduce regulation to 21 steps. This is still a lot, but we’re improving as a country to significantly reduce the timeframe for setting up a company in Mexico.
NSAM: Why invest in Mexico?
Zozayacorrea: If foreign investors look beyond Mexico’s security problems and listen to the other side of the story then they will benefit from enormous opportunities. There is another Mexico that is growing and pushing for reforms, in labor, education, energy, telecommunications and governance. With these reforms in place and a government taking the proper decisions, Mexico will be a country of great opportunity in the 21st century.
NSAM: How will these reforms affect the Mexican economy?
Zozayacorrea: The reforms that have already been passed by Congress, and those that are coming, are key for Mexico to attract the amount of direct foreign investment forecasted by the government. The education and labor reforms were not passed exactly as envisioned, but this was still a huge step up for Mexico. The tax reform, which is planned to be passed this year, will provide Mexico with a much greater capability to attract investment, whether through incentives, or just from having a much simpler tax system than the current one, which is a little bit complex. Ahead of the upcoming energy reforms, we’re seeing that lots of investors are already looking to invest in geothermal, solar or even wind farms – with the sunny state of Jalisco in particular attracting many solar energy plants.
NSAM: How will these changes affect the hi-tech sector?
Zozayacorrea: The telecommunications reforms will impact the opportunities for foreign investors to participate in the hi-tech telecommunications industry, such as the cable industry which will be opened to investors. The federal government is planning to open additional public channels in November, to allow new companies to compete against the duopoly (Televisa and TV Azteca) that we have in Mexico.