FinTech revolution is happening around the world. While sound financial institutions are exploring business possibilities, the real deal is happening in the startup scene. Bitcoin is just one of them.
Beyond decentralizing payments system around the world, Bitcoin is set to aid several industries. Legal services are a growing niche.
Mifiel is a Guadalajara-based initiative launched by the same team behind Volabit, a bitcoin transfers and exchange service in Mexican pesos. Mifiel allows Mexican people to use its electronic signature developed and supported by Mexican Ministry of Finance (FIEL) to sign any type of document.
Potential is clear for certification services, but in fact many other legal services could benefit. Namely e-discovery, M&As, contract management and judicial/administrative proceedings.
As NewLaw by non-lawyers is pushing traditional legal services to tech-driven law practices, Bitcoin could deliver the legal certainty for the rest of us.
The question is: Who will dare to become incumbent? Lawyers or Non-Lawyers.
Photo credit: Close Up 3D Illustration Of Paneled Golden Bitcoins by mdorottya / http://www.bigstockphoto.com
During 2013 and 2014, Mexico pushed estructural reforms on several sectors: Energy, telecoms, financial system, and many others. These reforms are building conditions for Mexico to attract investors, and of course, corporate law have been needing a revamp for years.
Right now, Senate is discussing an amendment to corporation law to give the ultimate flexibility to limited liability corporations (SRL), as investment vehicles. If approved, SRLs could be incorporated and liquidated using a new electronic system, which would be connected to the Registry of Commerce and Ministry of Finance, charge free.
On the other side, the House of Representatives is discussing another amendments to corporations law to reduce number of stockholders from SRLs, i.e. create sole proprietorships. For over a decade, legislators have opposed to that amendment, under the argument of preserving our roman law tradition of affectio societatis (will to associate).
If implemented right, the new flexibility offered by SRLs could open seed rounds to early stage startups, along with a stand-by robust corporate control ready to be triggered, if success happens.
Times are changing, and the world is full of tiny entrepreneurs. No jobs, all the opportunities. If Mexico wants to land them, this tiny reform to corporations must be a tree from a big deregulation forest to see.
Photo credit: Making Money – Conceptual – Table saw cutting dollar signs – 3d render with motion blur and selective focus by JohanSwanepoel / Bigstock.com
2014 is done. Business in Mexico was quite active in response to reforms in progress by Peña Nieto Administration. Some industries like energy, telecom, antitrust and financial services are on the spotlight, but all together with education, tax and judicial pretend to set a backbone for a new Mexican economy. Of course, foreign investment caps were reduced in some areas.
Mexico kept investment attraction with its free trade strategy, some governments with remarkable interest were UK, China, Japan, Singapore, California and Los Angeles. This strategy was fueled by negotiation efforts with the Pacific Alliance and TPP, and efforts to integrate more with the US.
Most of the attention was attracted to oil and gas, the Mexican Eagle Ford, the solar potential and the liberalization of clean energies, and the moves of related industries to the opportunities. Here is a summary of the energy reform to see the big picture.
Telecoms was another industry that was shaken by the reforms. Historic reform indeed, specially on broadcasting. Reform tried to set fair market conditions for everyone, and some were taken to court. Regulator learned the high cost of constitutional autonomy. All these changes deserved an ethical hacking on the new telecom law and regulation, specially on three hot topics: Telmex on TV, the arrival of Virgin Mobile and telecom antitrust.
Sectors like automotive and manufacturing grew strong during 2014, as expected. Aerospace is now following that path. Mexico is living a manufacturing momentum and if combined with R&D, could take it to the next level: a technology hub. During 2014, the Government announced a $590 Bn infrastructure plan, which is expected to boost in 2015.
The business opportunities are creating great expectations around the services industries. Lawyers, among other services firms, are moving to Mexico. Some of them under new law business models, as the global law industry is being shaken. Mexican legal market will have a very different landscape at the end of 2015. Quite diverse if new law moves from experimentation to business phase.
2015 is expected to be great for Mexico and those who believe in this momentum. Have you found an opportunity yet?
Hogan Lovells acqui-entry over Barrera, Siqueiros y Torres Landa last August 1 was the most clear landmark announcing a lateral hirings wave from US Law Firms to enter Mexican legal market. US Law firms are looking to keep company to their clients when taking advantage from Mexico´s reforms.
Now, DLA Piper expanded its local office by merging almost all members of Gallastegui y Lozano. Baker & McKenzie Mexico took in two former G&L lawyers. ManattJones Global Strategies, a consulting subsidiary for Manatt, Phelps & Phillips, LLP just opened a Monterrey Office.
On the other hand, Garrigues, the biggest European Law Firm, seems will take an organic growth approach. It is only privy to its inner circle whether Garrigues has the ability to secure its pipeline at the Pacific Alliance. Here is an interview with Fernando Vives, its CEO, for America Economia that could bring on some hints on its Mexico strategy.
Mexico regulates legal market at level of individual lawyer, mostly. Partnerships, bars, financing, trusts, investments and collaboration rules are mostly unregulated. In broad terms, practicing lawyers need a Government license and comply with general rules for services companies, foreign investment caps and special rules for money laundry and client-lawyer obligations.
This low level of regulation has opened doors for Big Four, accounting firms and consulting firms to break into the legal market decades ago. UK and Asia are now opening doors for Big Four into legal market.
It is too early to know the outcome of the recent reforms, and how legal services will be developed around them. However, Mexico has a high level of globalization, global integration of the chain of value of legal services and low barriers to enter that market.
Then, one thing is certain, it is time for a pivot called New Law.
Photo credit: The Angel of Independence (Victory column) over Paseo de la Reforma in downtown Mexico City, Mexico by AarStudio / bigstock.com
According to STR Construction Pipeline’s July 2014 report, Mexico as well as the Caribbean will enjoy a hotel construction boom with 167 hotels (28,140 rooms) expected in the future. This is a 21.8% increase in rooms Under Contract from the previous year and a 23.2% increase in the number of rooms under construction for the same period. These numbers come to prove research firm JLL’s reports, which believe the outlook for Mexico’s hotel industry to be positive since trends predict a 15% increase in hotel acquisition volumes. In money terms, this could mean over $700 million from the hotel industry in 2014, which is seven times more than the $100 million made through hotel transactions in 2009.
One of the main reasons behind the hotel construction boom in Mexico is the assistance this industry has been receiving from the energy sector. After the electricity market was opened by the President Enrique Peña Nieto’s landmark energy reforms, many changes took place, including prioritizing renewable energy sources. Mexico now expects most of its solar and wind capacities to be produced by businesses, including hotels. Hotels also have an incentive to comply since electricity is expensive for them at 13 cents per kWh. In addition, they and large businesses tend to pay 65% of total electricity sales. Therefore, it is in their best interest to choose renewable energy.
To further explain how hotels can start saving on electricity bills, solar systems installer Narcis Isern Subich points out that a hotel in southern Mexico would pay $17,000 for a 6-kW solar system. Within ten years, the investment would be paid off and the hotel could easily save $28,000 on electricity. “Since the cost of energy is so high, it is a good investment for businesses,” he said. “I look for clients who are passing into industrial consumption. The material lasts 25 years, so the first five years you pay off the investment, the next 20 years you are saving on energy costs.”
In an effort to convince hotels of the need to embrace green energy sources, Mexico is constantly hosting conferences which highlight solar and wind power among others. The country’s latest effort was WindTech Mexico 2014, which took place on October 7 and 8 at Sevilla Palace Hotel in Mexico City. In addition to highlighting the latest projects under development in different parts of Mexico, the conference aimed at connecting energy buyers and end-users with producers and their clients.
However, despite the growth potential of the Mexican hotel industry, the hotel pipeline is bound to be constrained. This is mainly due to high barriers to entry, which include the lack of land within populous metropolitan areas such as Mexico City and, ultimately, the higher prices associated with available areas. It will not be long, though, before the government takes a firm step towards eliminating this problem. After all, 2014 is expected to be the year Mexico finally boasts a promising economic and political environment that attracts foreign investors and reels back those who left the country during its tougher times.
In fact, the Federal Government of Mexico is already promoting transaction vehicles such as FIBRAs and CKDs, both of which JLL analysts believe to be responsible for the record-level transaction volumes made in the country this year as well as the acquisitions of 2013. With transactions equal to $270 million in 2013 in Mexico City alone, the capital is now considered Latin America’s most liquid hotel market.
Other model of growth is Hoteles City Express, one of the fastest growing limited-service hotel chains in Mexico targeting business people. Following the path of energy and automotive business.
With the support of the government and the energy sector, it will not be long before Mexico starts reaping the benefits of its quickly-growing hospitality industry, not only for business destinations, but relying on the ongoing infrastructure expansion connecting them with leisure cities.
Bottom line, the growth of the hospitality industry is based on a deep research of energy business opportunities.
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