Category: Interviews

Funding Landscape in Latin America

A lot is different in Latin America, compared to the Anglo-American world. This is also the case as regards litigation or arbitration funding. The language to start with, civil law v common law, duration of court proceedings, popularity of arbitration, the price of legal advice and much more. Whereas litigation funding has a long history in the UK and in the United States, its twin brother – arbitration finance – is still in its infancy in Latin America.

However, the trend in many (not all) Latin American jurisdictions is obvious. Arbitration has become more interesting as proceedings appear to be more reliable, duration more predictable and international enforceability – relatively –easy. The legal skillset is also at hand.

All this led to the establishment of local third party funders in the past years like Leste in Brazil, Lexfinance in Peru or specialised Carpentum Capital operating out of Switzerland but with lawyers on the ground in LatAm. Most recent Hakamana was set up in Chile. These funders are perfectly suited to serve growing local demand and complement or replace bigger Anglo-American investors, usually only funding investor state disputes or other very pricy cases.

Whereas demand is increasing, awareness of arbitration finance in Latin America is still very low. And even if the very basics are known, there are a couple of misconceptions around.

The biggest being that arbitration funding would only be required by clients, lacking of resources to finance a legal proceeding. This is a very traditional view of third party funding and may indeed be the case in jurisdictions who have a very young market in that respect. In the US according to a study on litigation funding from 2019, less than 30% of clients revert to litigation funding for that reason. The vast majority makes use of it as a financing tool in order to hedge litigation risks, outsource legal costs or free up working capital.

Another common misunderstanding is that a funder would acquire the litigation rights, which is not the rule (but it is possible under certain circumstances, eg by way of monetizing an award). Funders usually assume the cost risk. All expenses relating to arbitrators, arbitral institution, experts or law firms are borne by the funding partner up to an amount of committed capital, which is agreed beforehand. In case of a successful outcome, the result is shared – it could be a percentage of the result, or a multiple of the investment or a combination. If the case is lost, investment is also gone. Hence the risk is high, which is why only a fraction of cases will pass the scrutiny.

The Process

In order to survive this process, you should first know, how it works. Each investor may break its process in to various stages, but it always comes down to three crucial steps:

At the outset confidentiality will be agreed, conflicts must be cleared and the funder will check whether a potential investment would be in line with internal guidelines or appetite. Specific proceedings may be ruled out, minimum or maximum investments set and ethical standards applied. That’s the easy part.

In a second round essential documentation is shared, such as basic contracts, correspondence, legal opinions, financial information of counterparty, expert valuations etc. Also important: the budget of the case with an anticipated cash-flow. This phase is the internal due diligence or ‘first level’ review. The funder will decide, if it can invest in the case and calculate on what terms it would do so potentially. If positive, a non-binding offer is made and the client signs a term sheet. At this stage the investor gains exclusivity to pursue the investigations for a certain time frame. Most cases won’t pass this stage either because the probability of success is not high enough, realistic outcome is lower than expected, the counterparty not sufficiently solvent or the case may take too long.

If terms are agreed in principle and no smoking gun detected, the funder will spend even more time and money on an external due diligence or ‘second level’ review. Another lawyer than the client’s one will opine on various aspects of the case. If claim evaluation is an issue, an additional expert may be required to review damage reports, or arbitrators for a specific industry may be asked to share their view on custom and practise in that industry. All this should happen in a speedy and transparent fashion, as the client will be eager to get the final approval for his arbitration finance.

In theory the whole process should take a couple of weeks only, but depending on the complexity and value of the case it may easily take months. Don’t be shy to ask your funder for transparency and commitment to timelines.

The Funder’s View and How to avoid Pitfalls

On the other hand, you can also accelerate the process of arbitration finance in Latin America, if you know what the investor will look at.

You may be surprised, but the merits of the case are not the core issue. It will just be assumed that you don’t come around with a hopeless case, invented stories or a useless lawyer.

It’s the economy of the case. Starting with the collectability and ending with the cost-to-demand ratio. Your case may be as good as it gets on paper, but if you pursue this against a soon to become insolvent party, it does not really help. The quantification of a realistic outcome, rarely equalling the demand, comes next.

The funder will also look at a worst case budget and how it will be paid out. Worst case in our world not being a lost arbitration or litigation, but a proceeding going through annulment and up to execution. Too many lawyers or general counsels omit to think beyond the first award.

Therefore and in order to shorten the time up to a positive funding decision, you should:

• target the right investor. Ideally someone with the appetite for your arbitration in terms of size and jurisdiction as well as understanding for the local legal culture;
• think twice (at least) about the economics of the case. Potential outcomes, realistic result, duration and cash-flows are to be considered;
• work with a capable lawyer having a good track record in the legal sector at stake;
• have crucial documentation at hand and avoid piecemeal production of documents;
• be transparent and disclose the good, the bad and the ugly. Rest assured that the investor will find the weak spots anyway.

If you understand the process and know that the investor tackles a claim from a slightly different angle, arbitration finance in Latin America or elsewhere will be no secret science, but an accessible tool of dispute resolution. 

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See more from Carpentum Capital at: carpentum-capital.com

The Promised Energy and Infrastructure Investment Opportunities

In the early months of this year before COVID-19 became a global pandemic, all indications were that 2020 would be another record-setting year for investment in energy and infrastructure throughout Latin America. Significant institutional capital was being raised by debt and equity funds with an increasing appetite for and interest in Latin America. More and more global companies and strategic investors were lining up to pursue the development of renewable energy and infrastructure projects throughout the region. Renewable generation was increasingly cost-competitive with other generation without government subsidies, distributed generation was expanding rapidly, and commercial and industrial (C&I) businesses in Latin America were increasingly interested in direct contracting for renewable power. Governments were proposing new policies and reforms: advancing the evolution and diversification of Latin American energy markets, addressing climate change concerns through various investments, tackling urban congestion and pollution with public-private partnerships (P3s) to increase the electrification of public transportation, and structuring a pipeline of P3s to address other infrastructure gaps. Investment returns were better and opportunities more plentiful in Latin America than in most advanced economies. A growing roster of commercial banks and other lenders offering financing for those projects followed, also drawn, in part, by the better returns.

The Aftermath of the Pandemic

Then, the global pandemic spread to the Americas and led to a rapidly cascading shutdown of economic and human activity across the region resulting in an unprecedented deceleration of ongoing construction and an indefinite pause in new projects and investment. Quarantines resulted in a dramatic drop in electricity demand and substantially disrupted logistics for the construction and operation of projects. Government orders mandating uninterrupted supply of essential services coupled with suspensions of payment to private operators and the overall emergency have led to disruptions across value chains, including widespread force majeure claims, all of which have raised questions about the financial health of companies in these sectors despite mitigating efforts by countries like Brazil, Chile and Colombia. In short, the pandemic has set the region back economically, brought about a number of challenges for private and public sector plans for energy and infrastructure projects, and created uncertainty about the post-pandemic future.

It remains to be seen how these various dislocations will be resolved. Force majeure claims, in particular, have been asserted by parties across value chains and may raise a number of questions given the legal intricacies of the provisions that need to be interpreted, the economic consequences of contract milestones, term extensions, performance metrics and related payments, and the impact of these disputes on future contracts. The litigation generally arising from the pandemic, including claims for increased costs due to the pandemic and for the suspension of private operators’ rights to charge tolls or exercise remedies for nonpayment, will take time to be resolved and may produce outcomes that are inconsistent from project to project. Most importantly, investors will be watching the outcomes of these disputes, particularly those associated with government actions requiring private owners and operators to continue to provide services without compensation, in order to reassess political risks and the strength of investor rights under contracts in the different countries in the region.

The Opportunities Remain with Challenges

As the Inter-American Development Bank stressed in this year’s Development in the Americas report, Latin America and the Caribbean should ‘invest more and better’. Countries there/in the region have historically invested much less in energy and infrastructure than other developing regions and closing that gap will require greater and more effective public and private investment to produce better quality public services. The pandemic may shift aspects of how we live our lives and conduct business – and by extension whether we invest more in technology, media, and telecoms (TMT) and digitalization of services – but the need for investment in energy and infrastructure in Latin America has never been greater. Per IRENA’s Global Renewables Outlook, recovery measures that employ technologies consistent with long-term climate sustainability, like renewable generation, flexible power grids, efficiency solutions, electric vehicles, energy storage, and ‘green’ hydrogen, can help drive socio-economic development and create new private sector investment opportunities while addressing climate change goals.

Certain Latin American governments have already adopted policies designed to attract foreign investment in energy and infrastructure and make it a centerpiece of economic recovery efforts. Chile has introduced major initiatives on renewables, green hydrogen and electrification of public buses. Brazil has even reversed decades of prohibitions on the dollarization of contracts to increase the bankability of projects. Additionally, the United States has expressly made it a foreign policy goal to promote investment in energy and infrastructure in Latin America and the Caribbean in order to encourage a geographic shift in key suppliers to the United States from China and Asia to the Americas.

Further, the fundamental factors that promised opportunities prior to the pandemic – availability of capital, appetite for greater returns and need for investment – remain. There has been a reassessment of risk among investors and lenders and recent reports estimate that only a small percentage of newly raised capital is earmarked for Latin American investments. The International Energy Agency has cautioned that sponsors and investors will find that governments have focused their attention and resources on addressing the immediate impacts of the pandemic. As a result, government sponsorship of projects will be limited and public sector processes, including tenders, permitting and regulatory procedures, will be subject to delays. Moody’s predicted in July that future financing of energy and infrastructure will come from multilaterals and institutional investors given governments’ fiscal constraints and commercial banks’ focus on strengthening their balance sheets. Consequently, financing projects will be more difficult, particularly projects viewed as being riskier.

Nevertheless, from the perspective of Latin American companies, investments to ensure more reliable and affordable supply of electricity and infrastructure are essential to competitiveness and profitability and by extension economic growth. The pandemic has also underscored, if not accelerated, the public’s focus on climate change, ESG and sustainability concerns, including environmental and social costs, the importance of a diversified, reliable supply of energy, and the broad impacts of choices made with respect to infrastructure. As IRENA and OLADE stated in announcing their expanded collaboration this past July, ‘accelerating the development of sustainable energy’ as part of the economic recovery following the pandemic ‘could provide the Latin American region with a long-term strategy to address social inequality, energy access and energy security’. Companies seeking to encourage investment can support broad adoption of renewable generation or contract directly with developers and project owners seeking creditworthy buyers for their electricity. They can also partner with those developers as has happened in the United States to provide capital while mitigating political risks in this uncertain time. Consequently, we remain optimistic that there will be good investment opportunities in Latin America and that Latin American companies with access to industry expertise and seasoned counsel experienced in structuring and negotiating successful investments can play an active role in ensuring these positive changes continue. 

 

Maria-Leticia Ossa Daza is a partner in the Corporate & Financial Services Department and head of the Latin America Practice at Willkie Farr & Gallagher LLP. Jorge Kamine is a partner and Matt Vitorla is an associate in the Corporate & Financial Services Department of Willkie Farr & Gallagher and both are members of the Latin America Practice focusing on the energy and infrastructure sector.

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See more from Willkie Farr & Gallagher at: www.willkie.com

The COVID-19 pandemic hit Paraguay’s economy very hard and just when the country was recovering after a period of stagnation (-3% year-to-date in the first half of 2019). 2019 wasn’t a good year for employment either, the combined unemployment and underemployment rate reaching 14.5% in the first half of the year and retracting to 12.9% in the second half. This favorable path continued during the first two months of 2020 but with the beginning of COVID in March, began to slow down. Social distancing measures have most severely affected the service sector although informal labor was also badly affected.

The Government and the Paraguayan Central Bank (BCP) adopted a series of exceptional measures to address the economic and financial needs of both individuals and companies. In this regard it’s worth mentioning the BPC’s decision to reduce the policy interest rate by 175 basis points to 2.25% and the temporarily relaxed provisioning rules not to penalize credit restructurings and prolongations as well as the Government’s anti-crisis fiscal package approved by Parliament.

Another measure to alleviate the crisis has been low interest loans granted by the National Development Bank (BNF) to finance MSME’s payroll during the outbreak; in line with this it is worth mentioning that in June credits granted to the private sector grew by 4.1% YtD and loans granted to MSMEs reached USD$217m in July, while in May they totalled USD£130m.

Nevertheless, in 2021-22 growth is expected to return to 4% due inter alia to consistent macroeconomic policies, anchored in inflation targeting and a gradual return towards the FRL ceilings. Another key role in economic recovery will and is being played by public investments particularly in public works.

Legal Updates

The pandemic has represented an opportunity to introduce major and necessary changes that have helped modernize the local legal framework.   

Corporate Law

The Executive Branch enacted Decree 3605/2020 allowing PLCs to hold their board and shareholders meetings through telematic means provided that a series of requirements are met such as, inter-alia:

a) Real time presence and participation of authorized participants is ensured;

b) Meetings are recorded and kept within corporate files for 5 years and;

c) Mechanisms for the accreditation of rights to participate are established.

This provision represents a breakthrough in Paraguayan corporate practice and a clear advantage for foreign investors and shareholders as they can now take part in company decisions avoiding delays and fines especially during the pandemic. This exceptional measure will remain in force until 31 December 2020 and we are confident it will become a definitive practice.

Another important provision enacted is the suspension until 15 September 2020 of the application of fines and sanctions for non-compliance with the mandatory requirement of converting bearer shares into nominative shares.

Labor Law

This may be the field that saw the biggest changes. These sought to help businesses and employees cope with the crisis and reduce the negative impact on employment. Some of the most important decisions adopted by the Government are:

a) Contributions to the Social Security Institute (SSI) may be refinanced without interest for up to 18 months.

b) During the pandemic and whenever the nature of their work allowed, employers are encouraged to implement home and teleworking so as to avoid the spread of the virus; this measure is provisional and will last until the 31 December, nevertheless a draft bill has been presented to Congress in order to make it definitive.

c) A new regulation aimed at simplifying the application process for requesting employees’ job suspension was enacted. The procedure will remain in force during the pandemic and will benefit MSMEs only.

Anti-Trust and Regulatory Law

As a consequence of the COVID-19 crisis a lot of effort was made by the Government as well as the media and citizens in general aimed at controlling the public expenditure and public bidding processes. As a result of this, the National Competition Commission (CONACOM) undertook a series of formal investigations under Paraguayan Competition Law.

a) One was aimed at determining if prohibited agreements practices had been performed; the investigation was focused on public bidding processes for the purchase of medicines and medical related goods.

b) In another, CONACOM’s Investigation Department initiated preliminary investigation proceedings in order to identify possible violations of the Competition Law in connection with the latest operation involving a concentration proceeding between the biggest meat processing company and one of its competitors.

This is the first time CONACOM has used its investigative powers and its power to initiate ex officio proceedings; we believe this will improve the level of transparency of our public system and, at the same time, will force local businesses to strengthen their compliance policies, in particular those businesses in a dominant position.

Tax Law

Along with labor, tax law was the other field to see the greatest number of significant changes. During the crisis the Government enacted a series of important tax relief measures such as, inter alia:

a) Tax Deferrals;

b) Exception of penalties for late filing;

c) Exception of import duties and VAT reductions on all goods qualified as of first need;

d) Deadline extensions for filing and payment of the Withholding Tax on Dividends, Corporate Income Tax, Income Tax on Individuals, Income Tax on Agricultural Activities and Income Tax on Commercial, Industrial and Service Activities.

Procedural Law

The Executive branch enacted the Law by which the Judiciary’s summer recess is suspended thus all judicial activities and deadlines remain.   

Bankruptcy Law

A draft bill to modifying the bankruptcy law is being studied by the Legislative branch. The current law dates back to 1969 thus its modernization is seen as being key to improving the country’s business climate; the new law will allow companies at risk of insolvency to swiftly put their accounts in order and hence re-emerge more stably while also benefiting creditors. This law will be particularly important in the aftermath of the pandemic crisis.

Data Protection Law

Currently Paraguay does not have a general Data Protection Law, however, as a result of the increase in social and commercial activity on the internet due to social distancing measures it became apparent that the country could no longer remain without such an important provision; as a consequence a bill is currently being studied in Congress and is expected to be enacted by the end of 2020 or the beginning of 2021.

Conclusion

We cannot ignore the negative effects produced by COVID-19. However, we believe that Paraguay will re-emerge stronger wherever we can capitalize on the opportunities arising from the crisis aimed at accelerating the modernization process and increasing transparency of institutions.

So far, our country has taken adequate measures and has better coped with the crisis than some of the other countries in the region. In truth, the pandemic’s impact has been less harsh than in those countries whether in respect to fatalities and infections or in economic terms.

As for opportunities for the years ahead these will certainly come from the public sector particularly public works (civil and road) and from telecommunications as both sectors have shown a very dynamic performance over this period. 

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See more from Vouga Abogados at: www.vouga.com.py

It’s no surprise that the COVID-19 pandemic has forced human coexistence to rethink, revalue and reinvent itself in all aspects. Indacochea Asociados (IA) attorneys were no exception.

During this time, the Bolivian National Government issued a series of regulations in order to mitigate the impacts on our country. Regulations were focused mainly on labor matters, financial and tax compliance extensions, economic reactivations programs, enforcement of technology driven commercial mechanisms and most importantly, regulations regarding public health.

Due to quarantine, commercial and economic activities were practically paralyzed at a general level, which generated major uncertainty in the labor force where, despite the quarantine, employers were forced to take on a social burden while being limited or unable to continue commerce or cover day-to-day expenses. Adding complexity to this situation of uncertainty, Bolivian legislation provides high regulatory protection and labor stability for employees, which was reinforced by new regulations issued during the strict quarantine. Law No. 1309 established the prohibition to dismiss employees during the quarantine, a prohibition that would be applicable for a period of two months after the state of emergency had been concluded.

However, as the quarantine was constantly extended, some activities and restrictions have been partly lifted by the government, allowing the development of essential activities on-site. These measures have been regulated by Supreme Decree No. 4218, which establish guidelines, obligations and conditions for the execution of home office practices at a national level – work practice that has been highly encouraged by well-established companies. The implementation of these measures certainly upgrades labor practices in Bolivia.

Likewise, and as encouragement to taxpayers, the National Government through its National Tax Service issued several regulations aiming to provide payment facilities and extension deadlines for applicable taxes levied over personal and company obligations. These policies were reflected in programs that allow flexibility in the fulfilment of tax obligations, thus avoiding potential applicable sanctions by the National Tax Service. Similarly, these regulations provided various incentives for those taxpayers who complied with tax obligations in a timely manner or who performed donations directed to COVID-19 pandemic relief.

The Bolivian Registry of Commerce has issued a new Manual of Commercial Procedures which intends to reduce bureaucracy in all commercial acts that must be registered before this authority. This manual recognizes the digital signature as a valid way of securing certain commerce acts required by the Bolivian commerce code. Moreover, through new commercial regulations, it is now legally accepted that shareholders meetings may be held via communication technologies (prior to COVID, all shareholders meetings required shareholders to be physically present in the legal domicile of the company). Alongside this, the Bolivian Financial System Authority allowed for certain banking procedures to be executed with digital signatures, thus avoiding the physical presence of the interested party at financial offices.

In regards to welfare programs, the Bolivian Government provided economic support and relief to the general Bolivian population through various bonds. These bonds have been aimed at those whose economic or employment situation has been severely affected by the pandemic.

Taking into account the extended duration of the quarantine applied in Bolivia (In accordance to Supreme Decree No. 4199 strict quarantine started on 19 March and flexible and dynamic quarantine was established starting 1 June), the country’s economy will surely be impacted; experts predict anything from a 3% to 9% contraction in 2020.

In order to reverse these mid-2020 economic growth projections, the Bolivian government, through Supreme Decree No. 4216, Ministerial Resolution No. 159 and Ministerial Resolution No. 160  issued economic programs to support micro, small and medium enterprises, as well as programs to support employment and labor stability. These programs extended bank credits to micro, small and medium businesses bank credits in service of two main objectives: avoiding closure and maintaining jobs.

Additionally, and with the sole objective to reboost the national economy, a loan program was launched to promote the consumption and production of national goods and services. This loan has an historically low interest rate of 3% per year and intends to reactivate consumer buy-ins .

Despite the fact that economic support measures have become a reality, the current political scenario in Bolivia has made it difficult for them to materialize. A continuous struggle between the Executive Branch, which holds office, and the Legislative Branch, which holds a majority has seen the initiatives of one side opposed by obstacles from the other. This situation can be clearly identified with law projects in regards to international loans and sovereignty bonds proposed by the Executive Branch and blocked by Legislative Branch.

Although during the first months of the National Emergency the national economy was affected, as of June an increase in the labor market and in the generation of labor income could be witnessed, according to studies carried out by the National Institute of Statistics. Likewise, as a result of the implementation of virtual registries before the Trade Registry, there was an increase in the creation of small and medium enterprises, which implemented innovative business models and e-commerce in their offer of services and products. Also, because of the recently issued resolutions by the National Tax Service, tax incentive programs were created, implementing a system applicable to individual entrepreneurs and start-ups which offers access to a unique tax, as a replacement to traditional taxes applied to ordinary businesses.

We consider that despite the limitations COVID-19 brought to Bolivia and the world, it has given birth to what we call the Bolivian Legal System 2.0. This version comes with legal technology innovation, debureaucratization of public institutions’ procedures and new opportunities to reinvent business. It is necessary to adapt quickly to the new limitations and obstacles that are found in our reality, and to seek the effectiveness from the offer and customer satisfaction to provide the results that are sought.

The current situation has forced the state to adapt quickly, responding effectively with incentives that promote foreign investments likely to help the country’s continued economic growth. In this matter, new investments can count on a far higher level of legal protection than was offered by previous governments. The Government’s guidelines on new investments are certainly promising, and investors can have every confidence that legal protections are robust and will be enforced.

Thus, even though we are aware that much more needs to be done, COVID-19 certainly changed the rules of the game and government officials must continue to promote Bolivia as a promising emerging market, securing not only local but international investments. They must, they will.

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See more from Indacochea & Asociados at: www.indacochea.com

The Bayer legal and compliance express centre for LATAM and Canada is changing the way it provides compliance and data privacy services, as well as how it handles compliance investigations.

I started this new role at Bayer in March, just as the COVID-19 pandemic broke. As a result, I had to build a whole team remotely. The entire hiring process occurred virtually as I was not able to travel to regions such as Brazil and Costa Rica.

For me it was a very challenging experience. Building a new team, training new employees and taking them through the on-boarding process remotely is not typically the best way to start a new team. Yet, that was the situation and we all had to cope with. At the same time, we were developing a new digital platform, and I had to interact with developers and people in charge of that project virtually as well.

Additionally, time zones were a challenge as I had to schedule calls with Germany, Brazil, and Costa Rica. Managing my time and my agenda was very difficult, even though I had been working from home. I am based in Colombia and because of the pandemic I do not have the opportunity to travel. Therefore, hiring had to be been done in three different ways. For the first round we planned to hire 12 people, most of them located in Costa Rica and Brazil. I preformed 50 interviews virtually in the first wave. For some key positions I would have preferred to travel to Costa Rica or Brazil, but it was simply impossible. Overall, it was a very demanding process, but I am very happy with the outcome and with the people we were able to hire.

As a leader I like to empower and trust my team. This is not the first time I have had to manage people in other countries, so for me empowerment is key when leading a team.  In this case I have had to trust more as it is impossible for me to have a meeting in person with members of my team. I delegate more, and empower people to adjust and adapt to our new reality. We set up weekly goals, and we have follow-ups to see how tasks and activities are tracking. Although we do not have face to face meetings, we have been able to manage things effectively.

Travelling to other jurisdictions is one of the things that is going to be reviewed after the pandemic, because we have been able to prove that we do not have to travel to other countries to make things happen. I believe that every company is going to cut on their travel expenses. For example, I have not had to travel to Costa Rica or Brazil. I am managing teams in both countries and everything has been going well. Yet, if we have a serious or sensitive case to investigate we may need to travel thereto perform the investigation in person. Overall, companies realise that it is not necessary to be present in the country to make things happen.

External firms may need to reevaluate the way they deliver services as a result of the pandemic. Even before the pandemic, law firms in Latin America did not understand the necessities of clients and companies. They approach things in an ‘old school’ way. For example, if there is a new law  I need to know whether I am able to do something or not. External firms will prepare a 100 page legal opinion, citing all the articles of law, including any decisions from the Supreme Court that may pertain to that matter. This is very old school – maybe as legal counsel or as a lawyer that is something that I need to know and review – but the business does not need that volume of information. They just need to know if they can do something or not, and if they can, what would be the best way to do this, outlining the risks and consequences of the issue.

I am fed up with long legal opinions that do not say if our request is possible or not until the very end of the document. However, I think after this pandemic external firms will need to reinvent the way they provide services, and the way they interact with clients and think they will need to be faster in delivering services when providing advice to their clients. The world has changed, and the way firms interact with and provide services to clients will also need to evolve.

Another important aspect of changing times is managing the mental health of employees. At Bayer we have virtual actives for employees to relax and forget about the current situation. For example, we have yoga classes every week, we offer webinars with specialists in psychology, COVID-19 and a range of other topics. That is a very good way to offer employees alternatives to help them relax, and to think about something beyond work.

I have noticed that on team calls people ask how their peers are doing in their personal life, or about their family. This is useful to check in and talk about something that is not related to work, it is good to just check in, and see how people are and if they need anything from the company. One of the main things we need to be aware of is the ‘speak up’ mindset. Now everyone is at home, it is not possible to know what they are doing or be present at all times and we may miss some potential compliance infringements. We need to be closer to people because of this situation so they can raise any concerns. That is something important to keep in mind, especially in the legal and compliance teams. In the past, it was easier to interact directly with people, and preform training face to face, but now as you know that is not possible.

As a result, digital alternatives to interact with people are becoming more important. At Bayer, we are developing a digital platform to start a teaching the people to move from emails or phone calls to a more digitized solution. I think that is going to be the future. We are setting up teams and solutions in shared service centres around the world, for example in Costa Rica and Brazil. Overall, I think we are going to have to change our mindset on how we provide our services. We need to be more agile and we need to be more straight to the point.

This article contains an overview on Costa Rica, taking into account the impact of the Covid-19 pandemic in certain areas, coupled with the acceleration of trends that were already in motion before this pandemic started, all amid a ‘new normal’ stage that continuously triggers game-changing and challenging transformations.

Costa Rica, with its long-standing democratic tradition – having abolished its army in 1948; ranking at the top of the list of nations of the American continent in literacy, health and life expectancy; its wide-array of trade and commercial agreements with its major trading partners; and its long-standing and attractive investment programmes (such as the Free Trade Zone Regime) – now has to embrace and facilitate this period of transformation. It must redouble efforts to continue being a leader in the region, as a major hub for technological development, highly specialized shared services and manufacturing operations, while promoting a stable environment that enables the development of technological transformation and innovation.

Currently, Costa Rica is a major centre for the aforementioned added-value operations – headquartering subsidiaries for the Latin American operations of major transnational Fortune 500 corporations and other high-profile regional companies – and it is expected that these operations continue to increase as many companies recalibrate the supply chain seeking competitive nearshoring options in a new ‘decoupling’ setting.

To continue this path, the country has taken two major steps in the last two years to improve its finances and regulatory framework, the second taking place during Covid-19 times:

The first step consisted of a major and long-overdue overhaul of the tax legislation, albeit maintaining the tax territoriality principle. On 4 December 2018, Costa Rica enacted a major tax reform through the ‘Law for the Strengthening of Public Finances’, incorporating new rules regarding income tax, fiscal periods, permanent establishments and taxable events, taxation of capital income and capital gains and losses, and the Value-Added Tax (VAT) at a rate of 13%, excluding certain goods and services.

As will be the case in most countries in the world, further tax legislation is expected to improve the state’s finances, aggravated by the Covid-19 pandemic, all of which will increase the scope of reporting and compliance of tax and related regulatory obligations.

The second step was the culmination of the long process for being unanimously admitted into the Organization for Economic Cooperation and Development (OECD) on May 2020. For admittance, Costa Rica had to revamp its regulatory framework by approving specific legislation in areas such as investment, anti-corruption, corporate governance, financial markets, private insurance, competition, tax, public governance, statistics, economics and development, education, employment, health, trade and export credits, agriculture, fishing, scientific and technological policies, digital economy and consumer protection. It is expected that all the approved legislation required to become a member, in addition to future commitments, will pave the way for strengthening Costa Rica’s position in the global markets as a regional leader in many of these areas, pursuant to international practices and standards.

Even before being admitted to the OECD, Costa Rica had adopted the European Union’s General Data Protection Regulations (GDPR) as the basis for its legislation regulating protection of personal data and information under the self-determination, confidentiality, consent and use and protection of data principles.

The recent amendments to the competition law also follow OECD principles and practices, and in certain aspects, new rules are even more stringent for merger control and anti-competitive practices.

Moreover, as part of the public governance policies, the government is promoting and implementing through Mideplan-MEIC Guideline 085 a ‘digital government plan’ procuring the simplification of administrative procedures (in part to counter the increase of regulation), support to SMEs and business ventures, employability and investment in public infrastructure. This type of plan, along with strong public/private partnerships, is crucial for developing the necessary infrastructure to achieve digital transformation and maintain Costa Rica’s standing in the region.

In the labor law and practices realm, Covid-19 has reshaped the workplace, and the new trends in relation thereto are here to stay. As in other countries, the ‘new normal’ in Costa Rica will be working remotely on a permanent basis or, at least, applying a hybrid model that allows certain employees to work remotely, whilst others continue to work in the office. Setting rotating shifts as part of this hybrid model will allow using smaller office spaces, which will generate savings, not only in office space, but also on supplies, transportation, food and other costs related to physical work in the office.

Costa Rica has been ready to properly apply remote work or ‘work from home’ by timely approving legislation in September 2019. This legislation is quite flexible, as it allows the parties to negotiate the terms and conditions for each specific case, but seeking a proper balance by mandating employers to follow proper practices in its internal procedures to ensure the employee’s right to disconnect and avoid ‘burnout’ as a work-derived sickness. Employers must take a hands-on approach to ensure that employees have a proper office environment in their homes.

New labour legislation allows flexible work schedules and provides that an employee’s performance is measured based on the fulfilment of objectives and not just in the completion of daily shifts. The outsourcing of all tasks that are not related to the company’s core-business will become more common. Specialized and technical experience will be more relevant when selecting a service provider.

We also expect an increasing number of labour disputes to be solved through mediation and alternative dispute resolution centres.

Technology, as a major disruptive force on employment through artificial intelligence, is also continuously transforming the way standardized legal work is delivered, and we expect clients to seek solutions that improve the effectiveness of the contracting process and the contract life cycle management, the assistance and support to clients and GCs in the development of responses to regulatory events and business changes, regulatory response and compliance. We understand that GCs need to focus more on strategic matters, and providing the technological tools for such standardized legal work will be expected to be part of value proposals to clients. That is why at EY Law, we have spearheaded the legal managed services industry.

Other notable trends have been the increase in debt restructuring matters as the expected scope and duration of the Covid-19 emergency remain unclear, intensifying economic implications for many industries. This situation has increased the work related to debt restructuring, insolvency strategies and other ‘hibernation’ measures, the preservation of business continuity, along with liquidity and funding.

We have also been instrumental in advising retail clients on the implementation of e-commerce platforms as the region is experiencing a surge in online shopping.

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I have been a lawyer for 24 years, originally specialising in tax law. I became an in-house lawyer by chance. I began my corporate career as legal manager for Central America and the Caribbean at British American Tobacco. It was an incredible experience, but one day I received an offer I could not turn down. So, I went to work for Colgate-Palmolive. This is a really interesting company that deals with consumer goods and products that focus on oral health, personal care and home care. We also have a division that manufactures and sells pet food. It is a very diverse and interesting company.

I manage six countries: Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama. I oversee all the legal issues including tax, environmental law, government relations and advertising law. One of the most important things that has set Central America apart from the rest of the world when it comes to COVID-19 is the implementation of curfews. We have been under lockdown and had strict controls placed on our movements over the last five months.

Despite this, Colgate-Palmolive has not had to shut down  its operations. We sell our products throughout Central America, Dominican Republic, some parts of Europe, Mexico and the United States. We have not stopped even for one day. The goods we sell have been considered essential by every government in the region. Ensuring our people are able to do their job in a safe manner has been key. While this work has involved many departments, the legal team has made sure everything is done in a fully legal and compliant way.

The truth is, in-house legal work is usually done behind the scenes. I am fine with that, [because it] means when we do our work in the best way, everything goes smoothly. For example, in order for our employees to travel during curfew times we had to apply for special legal permits. In the end, nobody raised any issues. This means we did our job well.

This is a consumer goods company, it is a company whose main area of focus is to manufacture, sell and market products. We as legal are a support function, and our main goal is to operate in such a way that people do not know what we are doing behind the scenes. [Our lack of visibility] is a measure that the legal function, not only in Central America but worldwide is working effectively. Colgate-Palmolive has done a terrific job as we continue to manufacture and sell products safely.

Another, major change in my role is I am working from home all day. Apart from a quick visit into the office, I have not seen my leadership and management team for the past five months. This means we have had to change how we deal with everyday issues.  Previously, I would spend some time of the year in each country, making at least two visits per country a year. If something was urgent I would just hop on to a plane. These days I have to handle everything over the telephone or over a computer screen.

One of the biggest challenges during this pandemic has been brand protection, and I believe we have been doing a great job. We pursue and take action against imitation of products, counterfeiting and smuggling of products that do not conform to our requirements. During this pandemic, right from the beginning, we have had to deal with people trying to sell products and mislead consumers into believing products are from our company, when they are not. In the past, we would send our brand protection team, comprised of lawyers and private investigations to looking into to these kinds of issues. We would run an investigation, submit a case for breach of intellectual property and prosecute the case. As many of the countries in our regional cluster are now closed we have had to come up with creative ideas to deal with such issues. For example, gel alcohol (sanitizer) which is advertised using one of our brands on Facebook marketplace, is not a product we manufactured. We let Facebook know the product is not ours, and they need to shut the account down. We also sent a cease and desist letter [to the manufacturer of this product].

We have had to find a lot of creative ways to protect the company’s trademark, as well as protecting consumer rights. In the past, we would go into a street and look for the product, collect samples and just gather as much information as possible to prosecute those cases. Now, we have had to be more creative, and find other ways to have the product removed from the market without us involving private investigators.

My personal opinion is that we have managed our resources very efficiently. We can respond to matters effectively, whether we are sitting in an office or at our homes, and provide the same results. I believe the legal profession will become more flexible as we look for smart and creative solutions, whilst respecting the processes of the law. The reason people are hesitant to approach lawyers is that we can sometimes take too long to address issues.

Overall, we as lawyers want the legal profession to advance. When I was at school, there was a philosophical discussion regarding the law and whether the legal profession was a science or just a body of dead knowledge  that continued to follow the same statutes and cases over and over again. This pandemic has made us stop for a moment to take a look at our profession from a scientific standpoint. As in-house lawyers we have to reinvent ourselves, and find alternative answers to make things easier. The law can evolve, and the legal profession can evolve just as other sciences do. 

Regardless of the fact that Ecuador’s economy is the eighth largest in Latin America and the Caribbean (among 33 countries), Ecuador has amazing potential of business activities in the mining, energy, tourism and agriculture industries. With large natural mineral reserves (in gold, cooper and iron), amazing conditions for the development of energy projects, especially photovoltaic and hydroelectric energy, incredible tourism locations such as the Galapagos Islands, beautiful highlands, and considered to be one of the most bio-diverse countries in the world, Ecuador is also one of the top exporters worldwide of bananas, shrimp, flowers and cacao.

Due to all these interesting factors and many others like a dollarized economy, the government’s current policy has been focused in promoting attractive conditions for foreign investors and working on improving the benefits that were already granted in the Organic Code of Production, Commerce and Investment (COPCI) published in December 2010, but had little or none effect during the previous government (aligned to Hugo Chavez ideology).

The Law of Productive Development, Attraction of Investment, Employment Generation and Fiscal Stability (Investment Law) enacted in august 2018, offers to investors the possibility of obtaining interesting benefits such as: tax exemptions (income tax and currency remittance tax), reduction of custom tariffs, legal stability and entering into arbitration agreements while entering into Investment Agreements with the State, which has given law firms a new scope of work that involves project finance, tax, regulatory matters and contracts.

Furthermore, Ecuador offers investors a dollarized economy and a much more transparent State which has promoted transparency and the implementation of ISO 37001 anti-bribery among its government institutions and companies. These benefits have caused almost a 130% increase in foreign direct investment in comparison to the former government as per studies of the Central Bank of Ecuador.

However, despite the new foreign investors that came in different industries due the favorable conditions of the Investment Law and the effort of the current government to solve the extremely high debt left by the former government (which in addition to other matters caused a division among the elected political party, some in favor of the previous government and some in favor of the actual government), the economy of Ecuador was affected again by a combination of different factors.  These are the social unrest events that occurred not only in the country but also in the Latin American region around October 2019, followed by the oil crisis (price-drop), the damages in the local oil pipelines due to massive landslides and COVID-19.

COVID-19 impact not only revealed the deficit in the country’s health system but also caused the lockdown of the country and the suspension of most economic activities for a couple of weeks. As a consequence, certain small businesses have faced bankruptcy or many other, have had to reduce their production capacity and employment force, generating many opportunities for law firms in debt restructuring, ADR and labor advice, that had to innovate their services to provide legal assistance while working from home.

In addition, Ecuador has upcoming presidential elections on February 2021, and the political scenario is uncertain due to the fact that most of the high public official (President, Vice President and some ministries) of the former government have been prosecuted in relation to corruption allegations, and there is low probability that they can run for a public position. As such, after 14 years of having the same political party in government, there is a high probability of having a different political party achieving the presidency.

Some of the key aspects take into account while deciding to invest in Ecuador are the following:

Key Indicators for 2020 and forecast

Current Business Environment

Tax Regulation

Bellow a brief description of the main taxes applicable to commercial activities in Ecuador:

a) Income Tax

Income tax taxes the rent obtained by persons and local and foreign companies. Under the Ecuadorian law, income refers to:

Income from Ecuadorian source obtained free of charge of from work or capital.

Income obtained from abroad by persons domiciled in Ecuador or by Ecuadorian companies.

The tax basis is the total taxable income, less returns, discounts, costs and expenses deductible and attributable to such income. In general terms, the rate for companies is of 25%.

b) Value Added Tax

Tax on the value of transfer of ownership or import of goods, services, copyrights, industrial property and related rights. A 12% rate is applied over the price of goods and services. Some exceptions may apply to certain goods and services that will be taxed with a 0% rate.

c) Currency Remittance Tax (ISD)

The Currency Remittance Tax (ISD) taxes transfers in cash, through money orders, bank transfers, shipment, withdrawals or any payment of any kind, of currencies sent abroad, with the exception of an account clearing made with or without the intermediation of financial institutions.

The tax rate of 5% is applied over the value of the currency transfer. This tax is declared and paid by the financial institution by which the financial operation is carried out.

d) Capital Gains Tax or Property Transfer Tax

The tax rate for Capital Gains Tax and Property Transfer Tax ranges from 2% to 10%.

Labor – Profit sharing

15% of the net earnings of a company are distributed to all employees in the payroll. It can also apply to employees of companies that provide the company complementary services such as catering, security, cleaning and courier services. From the 15%, 10% is divided and distributed to all employees. The remaining 5% is distributed in accordance with the employee’s household.

Profit Sharing in mining, oil, and hydroelectric companies: as an exception to the general profit sharing rule, that the 15% of the annual profit must be distributed to all employees, in the case of mining, oil and hydroelectric companies it is only distributed 3% to all employees in the payroll, and 12% is distributed to the state.

Public Private Partnerships

The government has promoted Public Private Partnerships (PPP) which can be established for the provision of goods, building infrastructure, or services. All terms and conditions of PPPs are set out in a contract that must be signed with the public entity.

The PPPs have, among others that might be agreed upon the contractual parties, the following incentives:

a) Legal stability.

b) Income tax Exemption: Income tax exemption for ten years in projects in the prioritized sectors determined by an inter-institutional committee, period which starts from the first fiscal year in which the company generates operating income.

c) Currency Tax Remittance Exemption:  All companies that participate in an PPP will be exonerated from ISD in the following scenarios:

• In the importation of goods for the execution of the public project, whatever the import regime used.
• In the acquisition of services for the execution of the public project.
• The payments made by the company to the financiers of the public project, including capital, interest and commissions, provided that the agreed interest rate does not exceed the reference rate at the date of registration of the credit. The benefit extends to subordinate loans, provided that the borrowing company is not in a situation of undercapitalization in accordance with the general regime.
• The payments made by the company for distribution of dividends or profits to its beneficiaries, notwithstanding where they have their fiscal domicile.
• Payments made by any person or company due to the acquisition of shares, rights or participations of the structured company for the execution of a public project in the PPPs modality or for transactions that fall on securities representing obligations issued for the financing of the public project.

d) Reduction of tariffs: Customs tariffs that are related to the PPP projects will also be exonerated

e) International or domestic arbitration agreements

The incentives mentioned above may be enjoyed for the term agreed upon in the contract, with the exception of the income tax exemption, which can only be 10 years.

Investment Contracts

The Investment Law and COPCI benefits are directed to those new investments (either made by foreign or local investors) that meet the criteria of new productive investments in prioritized sectors of the economy that increases production and generates new employment.

The benefits granted by the government will depend on the investment project, its location, its industry, whether is a new company or an existing one, amongst other criteria, as shown bellow:

a) Total or partial income tax reduction from 8 to 15 years.

b) Currency Remittance Tax (“ISD”) exemption for the payment of imported machinery and raw materials, and for the payment of profits to foreign shareholders.

c) Tax stability for up to 15 years of the current applicable income tax rate. This provision does not provide stability for municipal, customs nor VAT Taxes.

d) Temporary exemption of custom tariff.

e) International or domestic arbitration is available for investors.

Initially, the aforementioned benefits apply for those investments made up to August 2020, but the President has recently extended the benefit for 2 years more, until 2022.

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See more from Paz Horowitz at: www.pazhorowitz.com

I am from Venezuela and for most of my career I was based there. I moved to Panama five years ago when 3M relocated me to takeover legal responsibilities for countries across Central America and the Caribbean. After two and a half years I relocated to Mexico to become general counsel there. In 2020, I moved back to Panama as general counsel for Latin America, overseeing legal operations in the health care, transportation and electronics sectors.

I started this new role during the pandemic and have overseen the company’s involvement in a range of initiatives during this period. 3M has been very focused on increasing production of respirators. As a company are working together to get things where they need to be, utilising our own distribution channels. It is important to note the company has not increased the price of respirators. In fact, 3M has been fighting against price gouging and many other types of fraud in both the United States and Latin America. There have been fewer cases in Latin American than in the US.

Legally, we have taken a global approach, rather than a local one. Legal departments across the company have aligned their goals for Latin America, USAC (United States and Canada) and Europe.

One of the biggest challenges that I have experienced in recent months has been dealing with the speed of change. Governments have generally relaxed their rules to allow healthcare products to come into countries easier,  while some jurisdictions have made it harder to export products deemed necessary during the pandemic. Dealing with different jurisdictions and trying to standardise the way in which we work has been our biggest goal. It is a challenge when deciding how to balance multiple jurisdictions – you cannot work with 15 countries in 15 different ways. We need to find a midpoint that works across varying countries.

For example, if I am drafting an agreement that I would like to be used as a template for both Mexico and Argentina, I cannot put into that agreement the initial part of the document, as the format will be different for each country. If I insist on having that part of the document done in one single way for Latin America it would simply fail. If I focused on the little things, I would lose sight of the bigger picture.

No matter what jurisdiction we are dealing with, general counsel need to be more business minded  than external counsel. Being part of a company is very different to being part of a law firm. Your state of mind needs to be focused on what the company needs, and on how the company’s goals  can be achieved through different tools. That is where the IT team here at 3M steps in and integrates those tools, sometimes even delivering new tools on demand. When I was in Venezuela I asked the IT team to develop a tool for my internal client agreements. I was tired of people coming to my office to request an agreement with a range of stipulations, without giving me the details that I would need in order to draft the agreement.  The IT team developed technology that would make it easier to extract the relevant information I would need to draft that agreement. However, as things evolved, that particular technology is not efficient enough anymore.

At the moment, there are a number of tools on the market that companies can purchase. They can then adapt those tools to the company’s needs. That is exactly the case for 3M. We have been working with management tools for agreements as well as repository tools to be more efficient. We as a legal department are very much like a sponges. We need to be aware of and absorb a lot, whilst always adapting to the needs of the business. Our goal is to serve the business – there is no question ever about that. We then have to be innovative, and we need to be fast. We aim to help business teams do what they need to do – which in the end is to sell our products.

To that extent, it is really important to adapt to the needs of the business and to take advantage of all the tools we have to make work easier. But I have to admit that the legal department does complain in order to get the technologies that help us become more streamlined. That is the nature of being human, if we did not complain we would not be able to improve things.

I miss being able to go into to work and see people in our Panama office. Looking to the future, I think this moment of time has accelerated things within the industry. We definitely need to move towards becoming more efficient, and to find a balance between being compliant with the law and doing the right thing. I know doing the right thing is a subjective concept, but it is important to try and do what is right at a particular moment when you are faced with a particular situation. As a lawyer, the personal values you have and believe in, are a big part of it.

Of course, you also need support from the business. In a company like 3M, when a lawyer says something is not right, the issue will be heard and observed. Legal departments do not only report to their businesses, but also to a wider legal code. Everybody knows the opinions of lawyers matter – and although lawyers can sometimes get it wrong – companies trust their legal departments. 

As a macroeconomic preamble, Guatemala is a developing country highly dependent on agricultural products, textile manufacturing, remittances sent by expats and a strong informal economy (which represents 22% of the overall GDP). The country enjoys a stable currency without drastic inflation, even with the COVID-19 crisis, the cumulative inflation rate is at 2.16% and has inflationary rhythm of 2.39%. This strong currency has had a negative impact on exports’ revenue, another extremely relevant economic sector.

Interestingly, on May 2020, Guatemala reported a 2.2% increase in exports compared to May 2019. Guatemala’s main export products are: i) textiles and apparel (10%); ii) cardamom (8.2%); iii) coffee (8.1%); iv) sugar (7.7%); and v) bananas (7.6%). These five products accrue for 41.6% of overall exports. On the import side, on May 2020 Guatemala reported a -9.5% decrease on imports compared to May 2019. This is mainly due to a -35% decrease on the imports of fuel and lubricants and a -17.3% decrease on consumer products. Although exports play a critical role, from 2018 to 2020 Guatemala has maintained a trade deficit of an averaged US$3,93bn. From a trade in services perspective, Guatemala’s balance of payments reflects an overall reversion of the trade deficit with a significant increase in the export of manufacturing services. However, this trade surplus rhythm went from 2013 until 2018 and was interrupted in 2019, when Guatemala reported a trade deficit of US$46.8m.

Despite these not so negative numbers, due to the current COVID-19 economic crisis, the Guatemalan Central Bank has adjusted its economic yearly growth projection from 3.5% to 0.5%-1.5% for 2020. From a microeconomic perspective, both social distancing and transit limitation dispositions rendered by the government have significantly impacted the services sector. For example, projections show a negative impact in hotels and restaurants with an estimated reduction of -24.3%, transportation with -14.7%, basic services (water, electricity and gas) with -9.4% and real estate services with -8.4%. Even though it may seem that the supply chains have not been substantially strained, they reported a turnover decrease of 20%-40% in March 2020. Depending on the length of the crisis, Guatemala could be facing a loss of 97,000 to 177,000 formal jobs.

To mitigate this crisis, the Guatemalan government has increased the national budget on Q19bn quetzales (around US$2.5bn) in order to create public funds for social and economic purposes that will inject liquidity to the economy. 80% of the Q19bn was financed by the emission of treasury bonds and the remaining 20% was covered via institutional loans. These measures have increased the fiscal deficit by 5.7% in comparison with 2019. Surely, this will have an impact on the macroeconomic indicators of the country. Furthermore, the government has also suspended: i) certain tax obligations reducing collection by 3.3% (which will intensify this fiscal deficit); ii) the payment of Bono 14, a yearly mandatory bonus that employers pay to employees. Such provisions, along with the social distancing and transit limitations guidelines, have impacted the conducting of business of our clients; influencing their business projections in a short- and long-term perspective. They turn to their trusted legal advisors and appreciate a holistic approach in their everyday challenges.

Within this context, the Guatemalan legal market is going through a very pressing and critical time. COVID-19 has, not only disrupted the way legal services are rendered, but also drastically shaped our clients’ current needs. The new reality has forced law firms to migrate to a full home office model, challenging the in-office stereotype enshrined in the legal profession.

As many law firms have moved to a mandatory home office, it is important to closely monitor the working culture of their employees and substantially rely on their technological platforms to enable a smooth transition. Before the COVID-19 outbreak, the home office standard had a limited and informal presence within the law practice. Many law firms allowed lawyers to work half a day from home, but it was not formally stated as an internal policy. At EY, employees have always enjoyed a mandatory policy requiring them to work from home at least once a week. This has nourished the home office culture and facilitated the migration to a full home office model overnight without compromising efficiency.

Our clients have constantly relied on our services in order to help them better understand the impact changing COVID regulations could have on their daily operations. We have created multidisciplinary service packages where EY’s legal division works closely with other service lines within our multidisciplinary teams, advising our clients to tackle most of their COVID necessities from a legal, financial and tax perspective. Within the legal element of this full package, we have detected a strong need for advice in the labor, contractual, tax and regulatory areas.

The M&A market has also been impacted by the current situation. The buy side M&A practice has observed dynamism triggered by big companies. Certain groups are using this crisis as an opportunity to expand their operations by acquiring smaller companies in distress for a better price. This has generated several opportunities for our transactional practice.

The COVID-19 crisis has brought uncertainty. It is an ongoing crisis with unpredictable effects continuously unfolding without a clear projection, affecting all sectors of the economy – and the legal market is no exception. However, with change as the only constant, organizations are forced to keep up with this roller coaster by rapidly evolving their internal administration and the manner in which they are addressing their clients’ needs. Survival depends on resiliency and the ability to adapt.

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