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When an Asian company seeks to expand into Mexico, the path is usually imagined as a linear and direct one: define a corporate structure, prepare the documents, and make sure that the lawyers in Mexico do their job. The problem is that, when the necessary documentation is not anticipated with precision, delays and obstacles to the expansion can arise. These do not usually stem from an underlying legal issue or from a decision of the authorities, but rather from the details of a simple document such as a power of attorney.
In practice, the incorporation of a company in Mexico is rarely delayed by the complexity of the chosen corporate structure or by some unforeseen requirement. The delays occur, in most cases, because the documents and powers of attorney issued in Asia require various validations and formalities before they can be submitted to a Mexican notary public. This document route involves authorities from two countries, certified translations, and criteria that are not always taken into account.
The good news is that this route, with the right legal advice, can be travelled without difficulty. The bad news is that it can’t be skipped: it is advisable to review the specific requirements before committing to the projected incorporation timeline.
Starting point: defining which power of attorney is needed
Before moving forward with the issuance of a power of attorney, it is important to understand why it is needed, and what it is needed for. In Mexico, the execution of a company’s articles of incorporation before a notary public traditionally requires the physical presence of the shareholders, so that they may appear before the notary and sign.
It is understandable that, for Asian founders, scheduling a trip to Mexico solely to sign the company’s articles of incorporation can seem unnecessary and entail unbudgeted expenses. Fortunately, the shareholders (or their legal representatives, in the case of companies) may grant special powers of attorney to people in Mexico so that they may appear at the signing and carry out the other procedures related to the incorporation of the company, such as the application for the corporate name, among others.
The key point is that the power of attorney must expressly set out the powers that are to be exercised. If the requirements imposed by notary offices to evidence the legal representation of the designated persons are not met, it cannot be used and will have to be issued again from the country of origin. When this happens, the route starts over from scratch.
Second stop: formalization and apostille
For the power of attorney to be valid in Mexico, it must be formalized before a notary public or its equivalent in the country of origin. This is important, since in each country notaries have their own rules and formats that must be complied with. This is where the need arises to maintain a line of collaboration between the lawyers in Mexico and the lawyers in Asia, so that the power of attorney meets the requirements of both jurisdictions.
Once the document has been formalized before the notary public in the country of origin, its authenticity must be certified so that it may be used in Mexico. There are two routes, and this always depends on the country where the document was issued.
The first, and the shorter one, is the apostille. Countries such as Japan, South Korea, and Singapore are parties to the Apostille Convention, and therefore an apostille issued by the competent authority of the country where the document was issued is sufficient for it to be valid in Mexico.
The second route, which is longer, consists of consular legalization. For countries such as Thailand and Vietnam, which as of the date of publication of this article are not parties to the Apostille Convention, apostilles are not applicable. In these cases, the documents must be formalized before the notary of the country of origin and subsequently legalized before the Minister of Foreign Affairs (or its equivalent) of that same country. Once this has been done, the document must be legalized by the Diplomatic and Consular Representations of Mexico.
Final stop: translation and notarization in Mexico
The apostille or legalization of the document is not the last step. It must be translated into Spanish by an authorized expert translator. It is important to note that, even where the power of attorney itself was issued in dual columns including Spanish, the translation must also cover the apostille or the legalization certificates of the applicable authorities, which are traditionally issued in the language of the country of origin; the costs and timeframes involved in these certified translations must therefore also be taken into account.
Added to this is the fact that the availability of certified expert translators in Korean, Japanese, Mandarin, or other languages is considerably lower than that of English translators, and their fees are higher. For this reason, these costs and timeframes must be anticipated from the outset.
Once issued, apostilled or legalized, and translated, the power of attorney must be formalized before a Mexican notary in order to be exercised for the incorporation of the company. This step closes the route, but it is here that the notary must verify that the power of attorney meets the requirements necessary for the incorporation.
The documentary route of the powers of attorney required for the incorporation of a company is not always the most visible one, but it is a route that can considerably affect the timetable of an expansion into Mexico. Anticipating it will allow the incorporation of the company in Mexico to move forward without interruptions, and will allow the team to focus on what really matters: the business.
At Vázquez Tercero & Zepeda, we accompany Asian companies at every stage of their incorporation process, from the definition of the powers of legal representation to the notarization of the power of attorney in Mexico and the appearance before the notary to complete the incorporation of the company. If your company is preparing its entry into the Mexican market, schedule a consultation with us and let us structure a clear route, free of surprises.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
