LATAM | What to expect in 2022: Key legal issues for companies

• Key legal issues for companies in Colombia in 2022. Read in Spanish.
• Key legal issues for companies in México in 2022. Read in Spanish.
• Key legal issues for companies in Chile in 2022. Read in Spanish.
• Key legal issues for companies in Perú in 2022. Read in Spanish.

COLOMBIA: Key points

• Corporate - Companies must take into account that the government plans to strengthen measures for corporate responsibility to promote transparency and fight against corruption. This could affect the list of corporate obligations regarding business ethics programs and risk management systems for money laundering and the financing of terrorism. There may also be actions to pierce the corporate veil.
• Exchange rate regime - Companies must take into account changes made by Colombia’s Bank of the Republic in relation to currency transaction procedures.
• Restructuring and insolvency - There is still time to undergo emergency negotiation proceedings for business restructuring agreements.The grounds for dissolution for non-compliance with the requirements of an ongoing business have been suspended until December 31, 2022.
• Personal data - Efforts to comply with personal data protection must be continued. This is particularly important for foreign companies using technology platforms and cookies in Colombia, especially if minors have access.
• Competition - Colombia’s Superintendence of Industry and Commerce (SIC) will have new criteria to impose sanctions for breaching competition regulations.
• Contracts - Franchise contract regulations cannot be ruled out.
• Consumers and e-commerce - There will be new regulations to supplement the regulatory framework of guarantees for e-commerce consumers in Colombia.
• Labor and employment - Employers must continue to manage the impact of the pandemic on labor relations: risk prevention, remote working, and vaccination. They must also comply with new labor obligations including paid parental leave for fathers, lactation rooms, reduced working hours, and the development and implementation of a tree planting plan.
• Tax - Taxpayers must take into account the increased income tax rate when managing business, new rules to be used to determine the final beneficiary, recent changes to some tax incentives, and the benefits to be obtained from developing business in the new jurisdictions with double taxation treaties. In addition, Colombia’s National Directorate of Taxes and Customs (DIAN) and Council of State have provided some interpretations on tax matters that could be of interest this year.
• Infrastructure and public procurement - In this sector, and particularly relevant in 2022, is the Electoral Guarantees Law and its amendments, the introduction of a new generation of concession agreements, the regulation of e-stamps, and the adoption of additional standard tender templates for public works tenders.
• Real estate and urban planning - When structuring new projects in 2022, some regulatory aspects that were implemented in 2021 must be taken into account. These include changes in the processing and validity periods of planning permits, changes to the conditions for formulating macro-projects, the extension of the validity period of the Victims and Land Restitution Law, and new urban planning conditions in Bogotá.
• Energy and environment - Companies in the energy sector must take into account the law promoting low-carbon development and setting goals and minimum measures relating to carbon, neutrality and climate resilience.
• Finance - Companies must take into account new developments in promoting the efficient transformation of savings into investment, fostering financial inclusion, progress in financial security, and the impetus expected in the access to the payments system.

MEXICO:  Key points

• Corporate. The reform initiative presented at the end of 2021 to amend the General Law of Commercial Companies expressly provides for remote attendance to all kinds of meetings. Companies are increasingly adhering to the provisions of the Environmental, Social and Governance Principles in their corporate governance provisions.
• Economic Competition. The growing involvement of startups in mergers and acquisitions poses the challenge of analyzing the substantial power of economic agents in digital markets. At the organizational level, key officials are to be appointed to the Plenary of the Federal Economic Competition Commission.
• Financing. Sustainability criteria and the replacement of the LIBOR rate will most likely play a key role in financing.
• Energy. The approval in 2021 of the initiative to amend articles 25, 27 and 28 of the Political Constitution of the United Mexican States will significantly affect the electricity and hydrocarbons industry.
• Infrastructure. The Secretariat of Infrastructure, Communications and Transportation will have a total budget of 65,553,600 million pesos, which will mainly go to road, air and railroad projects.
• Taxation. Amendments to the Income Tax Law, the Value Added Tax Law, the Excise Tax Law, the New Automobiles Federal Law, the Federal Tax Code and other regulations may have a potential impact on the taxation of multinational groups in Mexico and abroad.
• Labor. The collective bargaining and labor justice reform of May 1, 2019, and the subcontracting reform of April 23, 2021, will continue to have effect on labor matters throughout 2022.
• Litigation/Arbitration. In 2022, a considerable increase in constitutional disputes is expected from the implementation of various federal industrial and commercial policies. At the same time, breaches occurring in 2021 will likely lead to an increase in bankruptcy proceedings and commercial disputes in major productive sectors. This will involve commercial disputes and arbitration, as well as an increase in investor-State arbitration.

CHILE:  Key points

• Constitutional Process - 2022 will be crucial for the constitutional process currently underway in Chile. A constitutional referendum will take place in August or September to ratify or reject the proposed rewrite. 
• Taxation - We highlight (i) the bill reducing or eliminating tax exemptions; (ii) the bill providing tax benefits for donations to non-profit organizations; (iii) the announcement of the main lines of the tax reform; (iv) the bill establishing compensation for the State, i.e., a mining royalty, for the exploitation of copper and lithium mining; (v) the ratification process of Double Taxation Agreements between Chile and the Netherlands, the United Arab Emirates and India; and (vi) the draft circular on the tax treatment of life insurance with savings or insurance with a single investment account.
• Data Protection - We highlight (i) the personal data protection bill, which raises Chilean regulations to OECD standards and creates the Personal Data Protection Agency; and (ii) the new powers of the National Consumer Service regarding data protection and consumer relations.
• Finance - The bill known as the “Fintech Law” is expected to move forward. It promotes competition and financial inclusion through innovation and technology in the provision of financial services.
• Competition - We highlight (i) the new Merger Notification Regulation and (ii) the first subpoenas by the National Economic Prosecutor’s Office for infringements of the horizontal interlocking prohibition.
• Consumer Protection - The following legal developments are relevant to consumer protection: (i) the Electronic Commerce Regulation published on September 23, 2021, and (ii) Law No. 21,398 published on December 24, 2021, known as the Pro-Consumer Law.
• Cybercrime - The draft legislation includes rules on cybercrime and amends other legal instruments to bring them into line with the Budapest Convention.
• Corporate - Companies will have to take into account General Rule No. 461 issued by the Financial Market Commission on November 12, 2021, requiring that annual reports include ESG criteria, and the draft regulations currently under consultation by the FMC.
• Paid Passenger Transportation - The following bills are currently being processed: (i) the bill on paid passenger transportation applications and related services and (ii) the bill amending the Labor Code by regulating employment contracts of digital platform companies.
• Intellectual and Industrial Property - We highlight (i) the bill amending Law No. 17,336, on Intellectual Property, to regulate technological protection measures, and (ii) Law No. 21,355, amending the Industrial Property Law and conferring new powers on the National Industrial Property Institute.
• Alcohol Marketing and Advertising - Law No. 21,363 lays down rules on the commercialization and advertising of alcoholic beverages.
• Energy - We highlight (i) the bill promoting power storage and electric mobility; (ii) the National Electric Mobility Strategy and Public-Private Electric Mobility Agreement published in October 2021; (iii) the bill amending Decree with force of law No. 4/20,018 of 2006, consolidating the General Law on Electric Services, to establish the right to electric portability; (iv) the bill prohibiting the installation and operation of coal-fired power plants across the country; (v) Law No. 21,305 on Energy Efficiency, published on February 13, 2021; (vi) the Technical Standard on Regasified Liquefied Natural Gas of October 14, 2021; (vii) Ordinary Official Letter No. 828/2021 issued by the National Energy Commission on November 18, 2021, regulating extraordinary considerations for the process of Declaration of Works regarding generation and transmission projects; (viii) the bill regulating the construction of wind turbine complexes and amending the Environmental Framework Law; and (ix) the bill promoting renewable energy.
• Hydrocarbons - A bill to optimize the gas market is currently being processed.
• Water - The bill amending the Water Code is expected to be approved soon.
• Extended Product Responsibility and the Promotion of Recycling - The following are expected: (i) presentation of end-of-life tire (ELT) management plans within the framework of Law No. 20.920 on Extended Producer Responsibility and the Promotion of Recycling and (ii) the beginning of the drafting process for a Supreme Decree establishing environmental labelling obligations in Chile.

PERU: Key Points

• Tax. The most relevant changes in 2022 come under the reforms of the Peruvian Tax Code, the Peruvian Act on the Tax Identification Number, and the Peruvian Income Tax Act. These reforms are aimed at (i) optimizing regulation of the proceedings carried out between the tax authorities and the taxpayers, (ii) improving the identification of taxpayers whose situation must be subject to the authorities’ control, and (iii) increasing clarity and flexibility for taxpayers regarding their tax obligations. Also, Peru and Japan signed a double tax treaty for income tax. In addition to promoting investment growth in Peru, this will enable the Peruvian and Japanese tax authorities to have an efficient mechanism to handle international tax evasion and avoidance.
• Labor and Employment.  Labor laws in 2022 will focus on regulating matters that are already highly regulated. The executive branch of the government has specific objectives concerning extending workers’ legal protection and increasing the employment costs assumed by employers. One of the immediate objectives is to increase the minimum wage. However, the restrictions on the regulation of outsourcing, whose legality is questionable, has disrupted the market and contributed to a decrease  in the creation of decent jobs.
• Regulatory. In the energy sector, the main changes in 2022 relate to the increase in the marginal generation costs, which has led to (i) the renegotiation of several electricity supply contracts, and (ii) an increase in the energy revenue of generation facilities using renewable energy sources.  Also, regulatory changes are expected to be approved in the coming months to boost the use of renewable energy sources in the electricity system. The scope of the Electric Social Compensation Fund has been extended, increasing costs for free users.  Regarding infrastructure, the new National Infrastructure Plan for Competitiveness will be approved in the coming months, with priority projects in sectors such as transport, agriculture and energy. In conjunction with representatives of the private sector, the government has been promoting a reform that expands on and facilitates the implementation of projects through application of the public works tax.
• Corporate and Commercial. In 2022, the trends are marked by  (i) crossborder corporate restructuring, and (ii) the regulation of the digital transformation of financial services.  Concerning corporate matters, there is a new development in 2022 of the possibility to migrate a company originally incorporated and with a registered office in Peru to a foreign country.  At the start of 2022, Cuatrecasas Peru advised a local company on the first migration (change of registered office) of a company originally incorporated and with a registered office in Peru to a foreign country, despite there being a legal gap in this area in the local legal system. Regarding fintech, in 2021, we saw the efforts of the different local regulators to establish rules for the fintech sector, and will continue to see these efforts in 2022. In Peru, there was already existing legislation on electronic money and, in 2021, rules were issued regarding (i) crowdfunding, which will enable sectors that had not been included under the existing legislation to access loans; and (ii) a regulatory sandbox to promote innovation and new models. For 2022, there are several draft regulations in the pipeline for the sector, one of which is the regulation of cryptoassets.
• Litigation and Arbitration. The trend in 2022 is to consolidate the virtuality of arbitration proceedings—particularly during the evidence phase—despite the gradual removal of the restrictive measures introduced in the last two years due to COVID-19. Also, regarding legal issues, the trend this year is the implementation in all national courts of the electronic case file, which is aimed at ensuring continuity of the administration of justice while promoting telework and the use of electronic means.