Cultural Fluency, Trusted Partners Secure Chinese Investment: VTZ

Q: What capabilities does your antitrust and compliance expertise bring to a firm traditionally focused on International Trade?
A: Vázquez Tercero & Zepeda (VTZ) has been Mexico's most important and highest-ranked foreign trade firm for over 10 years. The firm's expansion began when Adrián Vázquez recognized that clients needed more than just trade law; they required professional counsel for essential initial steps like company setup and regulatory compliance. I joined to fill this service gap, leveraging my experience from other top-tier law firms and Amazon Mexico. This complemented its geographical expansion, notably establishing the only wholly-owned Mexican firm office in Hong Kong, covering all of Asia. My role also serves to facilitate a necessary generational transition from the highly experienced founding partners, now in their sixties and advising the Mexican government on trade negotiations with the United States, to the next generation of leaders.

Q: How does your appointment as Vice President of the American Chamber of Commerce AmCham D&I Committee pair with your arrival at VTZ?

A: My arrival was also part of a vision to build upon 50 years of the firm's achievements. My current leadership areas are focused on how to integrate existing strengths and improve them. This vision is reflected in my recent designation as Vice President of the Diversity and Inclusion Committee at (AmCham). For us, this is a major achievement, and, significantly, it is potentially the first time a partner from the LGBTQ+ community at a Mexican firm has led a committee of this caliber. The legal market in Mexico, particularly Mexican firms, tends to be closed and traditional, often exhibiting homophobic or misogynistic tendencies. Leading this committee is a way to break these barriers, find a new consensus, and work toward a more inclusive environment.

This happens during a complicated moment for diversity efforts. With political pressures leading the United States government to reduce or cut funding for diversity budgets, in this role, we are trying to reframe the discussion. One of my biggest goals in the committee is to prevent the closure of diversity committees and the termination of essential activities and protocols across US companies, make all the members see value in DEI initiatives. These policies are crucial because they not only benefit the company but also provide security and trust to minority or dissident communities, assuring them that the workplace is safe and welcoming.

In the last few months, it has been a genuine challenge to watch how many companies have withdrawn from these initiatives due to political pressure. However, this situation also offers an opportunity to redirect efforts toward policies for other often-forgotten minorities, such as older people. We need to find ways to reincorporate adults who retired at 50 or 60 years old, especially those whose pensions have severely diminished in value, by offering them dignified work. Finding a solution for this skills-to-experience gap is a crucial component for diversity and inclusion. 

This is a working line that the firm has been actively pushing through policies covering diversity, inclusion, safety, and establishing clear reporting channels. We are creating a differentiated compliance offering for clients that goes beyond traditional areas like handling corruption or fraud cases. We are developing a practice focused specifically on diversity, inclusion, and the prevention of sexual harassment and workplace bullying. 

Through specialized platforms and expert consultants, we aim to tell companies that diversity extends far beyond gender equality or sexual preference; it also includes addressing issues like disabilities and neurodivergence, which are often overlooked. We do not want to neglect gender equality or the protection of the LGBT+ community, but to offer a broader, differentiated support service that addresses discrimination, harassment, and mobbing through a new, comprehensive approach that complements traditional compliance areas like anti-money laundering, personal data protection, and competition law.

Q: Beyond customs and trade, what regulatory bottleneck most impedes a company's rapid market entry into Mexico, especially among Asian companies?

A: VTZ is recognized as the law firm with the most Asian clients in Mexico, especially from China. To understand this segment, one must first draw a crucial distinction between Chinese clients and non-Chinese clients, as China is a completely different animal. The regulatory gaps and cultural differences in how business is conducted between China and any other country are diametrical.

Dealing with non-Chinese Asian clients is generally straightforward. The problems arise with Chinese clients, as most Mexican law firms do not know how to handle two key areas: first, the Chinese business culture; and second, the complex process of capital repatriation. A Chinese company cannot simply arrive and invest in Mexico instantly; it must secure governmental authorization to move the capital out of China. This often requires establishing holding companies in jurisdictions like Macao, Hong Kong, or Singapore to funnel the resources before they can acquire shares in the Mexican entity. Only a handful of law firms in Mexico likely possess the specific knowledge required to structure Chinese capital legally and efficiently.

Chinese businesspeople often demand results very quickly and without due caution. We refuse to compromise on compliance, which sometimes leads them to seek cheaper options or unprofessional advice found online, frequently leading to fraud. We recently had a case involving a US$15 million fraud because local advisors suggested using prestanombres (strawmen) to circumvent regulatory processes, leading to the money being stolen. This highlights a critical pain point: Chinese executive seeks speed and efficiency, but the Mexican lawyer must be capable of saying no and insisting that they adhere to legal counsel. The lawyer cannot, however, become an insurmountable barrier. 

The issue of timing also plagues the entry of Asian and other foreign companies. Foreign investors do not get why establishing a company and making it operational in Mexico takes so long. During the past administration, we could complete the process, including incorporation, obtaining bank accounts, and a tax ID (RFC) in approximately two to three months. Currently, the timeline has stretched to around five months. For a company ready to invest, telling them they must wait five months before they can even rent an office is causing many investments to fall through. While the goal should be two or three months, the normal legal path now takes roughly five months to finalize corporate formation. The lawyer's experience is vital in efficiently navigating these procedures to prevent investment erosion.

Q: How does your firm differentiate its service offering to effectively handle the specialized needs of the Chinese market?

A: The generational change within our firm directly benefits our approach to the evolving Chinese market. While China remains somewhat closed with capital restrictions, the younger generation of Chinese executives, typically those who studied overseas, possesses a completely different, more internationalized business mentality than their parents. This is crucial because many Chinese medium-sized enterprises are larger than even the biggest Mexican firms.

We have senior partners who are highly experienced in dealing with Asian markets over decades, but we also have younger partners, all of whom have studied abroad and worked with clients worldwide. This combination allows us to connect effectively with the next generation that will own and operate these companies. 

The language barrier is another key challenge. The older generation of Asian leaders do not often master other languages. In negotiations, this leads to a logistical nightmare with multiple translators going back and forth, creating uncertainty about the accuracy of the translations. Our firm's office, staffed by people who speak Chinese perfectly, provides a crucial extra layer of service. We ensure the client receives an accurate translation, as we have even encountered cases where translators committed fraud by having clients sign incorrect documents. Offering a professional who speaks the client's language perfectly is a vital, differentiating element of our service.

We have staff in our Hong Kong office who speak Japanese and Chinese. It is very important that clients recognize that while my services may be equivalent to a competitor's, we offer more. For me, that means presenting myself, showing genuine interest in their culture, understanding their business activities, and striving to comprehend their perspective at every moment. This cultural empathy is a core part of the experience we aim to deliver as a firm.

Q: What legal or regulatory adjustments would most immediately streamline processes and improve Mexico’s competitiveness against major global jurisdictions like Hong Kong?

A: Corruption in Mexico remains a significant concern, and bureaucratic procedures for establishing a company are unfortunately one of the primary areas where this occurs. One of the main limiting factors, however, is the government's increasingly lengthy processing times. For example, obtaining the name approval for a new corporation, which is a simple, digital procedure, took only 24 hours in 2010 and about two or three hours during the previous administration. It now takes up to one month. Furthermore, even though it is a digital process, the system is only open for submissions for a few hours a day.

The second primary obstacle is the complexity of anti-money laundering (AML) and fiscal requirements for opening a company. While the goal of AML is understood, the requirements are often exaggerated to a ridiculous level. For instance, authorities are demanding documents such as the marriage certificate and spousal ID from corporate executives. We have a real case involving an investment fund with Arab Sheikhs, some of whom have multiple wives; these are extremely wealthy individuals who will not provide four marriage certificates or official identification for their wives. If they do not provide these papers, the company cannot be incorporated in Mexico.

This bureaucracy is actively delaying capital inflow. In one instance, a billionaire US client has refused to provide his home address or his wife’s identification for security reasons, stating mistrust of the Mexican government. Once an investor clears these AML hurdles, they face fiscal registration issues. The government recently boasted about making it harder to obtain an electronic signature, simultaneously with RFC, supposedly to combat fraudulent billing companies. For a legitimate company with a strict investment calendar, this delays the process by two or three weeks. If they have a contract requiring export at the end of the month, this makes it impossible.

There must be a balance between necessary regulation to prevent money laundering and fiscal evasion, and not impeding legitimate business to such an extent. At some point, this begins to feel like a form of persecution. The vast majority of companies coming to Mexico are here to do good, create jobs, and contribute to the country’s well-being. The government must recognize this and not create such massive impediments. While other areas, like the public registry, have become very efficient, the overall success hinges on the lawyer's competency.

Q: What is the highest-stakes legal uncertainty the USMCA 2026 review presents for clients seeking to expand or enter Mexico, especially those with Asian capital or supply chain ties with this region?

A: The first concern is that new restrictions will make it harder for products to qualify as Mexican in origin and enter the US duty-free. This goes beyond simple transformation; companies must now meet increasingly strict national content requirements to receive a certificate of origin.

The second concern is ensuring Mexico remains competitive in labor and fiscal matters against other countries, particularly those in Southeast Asia like Vietnam. The other factor is labor cost. Every time these discussions arise with the United States, there is a strong demand to address low Mexican wages. While salaries have increased since the USMCA negotiations, the more Mexican salaries increase, the less competitive the country becomes. If salaries continue to rise sharply, there is a serious risk that investment could shift back to offshoring, moving to Southeast Asia instead of China, which is a major concern for executives already operating here.

Q: What are your firm's immediate strategic priorities for retaining new investment and mitigating current regulatory risks in Mexico?

A: Our primary objective is twofold: first, to successfully anchor arriving investments and prevent them from leaving, as many companies have pulled out even after incorporating and signing lease agreements for industrial facilities. Second, we have noted a significant increase in the small-scale, specialized maquila segment. It is increasingly expensive and complicated to maintain a large-scale maquila due to legal requirements, particularly the strict inventory controls enforced by SAT, where even a minor error can result in a massive fine.

Consequently, we have seen growth in smaller facilities, such as those specializing in diamond cutting, electrical boxes, and components for the aeronautic industry or solar panels. These are high-specialty facilities, often only 1,000m² to 2,000m², that focus on rigorous controls rather than cheap, mass production. 

Also, must prepare to lead and re-establish healthy relations with South American countries. This is crucial because if complications arise with the United States, that channel must be open to re-route and relocate exports to third countries, thereby preventing the closure of job centers in Mexico. We cannot simply lament when the US closes the border to products; we must be proactive. It is the responsibility of legal, financial, and foreign trade firms to help affected companies reposition their products in other markets, ensuring that the source of employment and wealth remains within Mexico.


Vázquez Tercero & Zepeda is a Mexican Law Firm that specializes in international trade and customs. With over 50 years of experience, the firm offers comprehensive advice on complex legal matters, helping companies navigate domestic and international challenges with tailor-made solutions.