Tax residency issues on structuring Mexican venture capital investments
June 09, 2023
ITR - International Tax Review
Our partner Óscar López Velarde and associate Gabriel Márquez, discuss in the following article published by ITR (International Tax Review), how venture capital funds and investors often fail to give due consideration to the Mexican tax residence rules and explain that:
"Although using a 'carrier pigeon' company provides flexibility for defining the final holding structure later, most investors and fund managers are assuming that there will be no capital gains taxes if they sell the Cayman entity or US LLC. However, it is noted that tax residence in Mexico is not determined by the place of incorporation but rather by factors such as the main place of administration or the place of effective management of the business".