Posted in Hedge Funds Private Equity Puerto Rico Tax

Private equity and hedge funds in Puerto Rico – a welcoming environment in the Caribbean

Written by: Nikos Buxeda, Manuel López-Zambrana, Camille Alvarez and Juan Carlos Feliciano

Ten years ago, private equity funds and hedge funds were practically nonexistent in Puerto Rico. This has changed dramatically as the result of two main developments: the enactment of Act 185-2014, known as the Private Equity Funds Act and (ii) the influx of financial industry professionals moving to the island to take advantage of the tax benefits available under Acts 20 and 22 (for a more detailed discussion of those benefits, please see Puerto Rico’s Act 20 and Act 22 – key tax benefits).

Find out more here.



Posted in Brazil Intellectual Property Media and Entertainment


The Federal Court of Appeals of the 2nd Region (TRF-2) has ruled that the song “Tropa de Elite,” owned by the Brazilian band Tihuana, is not a sufficient cause for the cancellation of the “Tropa de Elite” trademark registrations related to the Tropa de Elite movies, because the band allowed the use of the song in the movies as well as in the movies’ titles.

The lawsuit was brought by the band Tihuana against the director of the Tropa de Elite movies, José Padilha, and his production company. The band requested the nullity of the trademarks “Tropa de Elite,” registered before the INPI and owned by the defendants, on the grounds that the registrations would violate article 124, XVII of the Industrial Property Law (LPI), which prohibits the use of trademarks in artistic works that are likely to cause confusion or association, except with the consent of the author.

The film director argued, in its response, that there is no risk of confusion between the movies and the song, since the public associates the expression “Tropa de Elite” with the movies and the song only became widely known after the release of the first movie.

The court decision upheld the verdict of the lower court and emphasized the fact that the release of the song “Tropa de Elite” before the movies opened is not crucial to the resolution of the dispute; not only had Tihuana authorized the use of the song name in the movie titles, but the band also agreed to change excerpts of the song so that it would better fit the narrative of the first movie.

Judge Messod Azulay stated that the “Tropa de Elite” trademarks related to the movie sequel cannot be confused in any way with the song owned by the group Tihuana, considering that it was the success of the movie which gave fame to the expression and, as a result, gave the expression a new connotation.

The judge also stressed that the trademarks are strengthened by the way the same expression is used in the movies, eliminating the possibility of confusion by the public.



A Segunda Turma do Tribunal Regional Federal da 2ª Região (TRF-2) decidiu que a música intitulada “Tropa de Elite”, de autoria da banda Tihuana, não é causa suficiente para anular os registros das marcas “Tropa de Elite”, referentes aos filmes, tendo em vista que a banda permitiu a utilização da música nos filmes e, inclusive, que seu título desse nome a eles.

Trata-se de controvérsia originada pela banda Tihuana contra o diretor dos filmes “Tropa de Elite”, José Padilha, e sua produtora. A banda requeria a anulação das marcas “Tropa de Elite”, registradas perante o INPI e de titularidade dos réus, sob a alegação de que os registros violariam o artigo 124, XVII da Lei de Propriedade Industrial (“LPI”), que proíbe uso de marca em obra artística suscetível de causar confusão ou associação, salvo com consentimento do autor.

O diretor, em resposta, alegou que não há risco de confusão dos filmes com a canção, tendo em vista que a expressão “Tropa de Elite” é associada pelo público aos filmes, e que a música apenas se tornou amplamente conhecida após o lançamento do primeiro filme.

O acórdão manteve a decisão de 1ª instância e destacou que o fato da música “Tropa de Elite” ter sido lançada antes do filme, de mesmo nome, não é fundamental para a resolução da lide, tendo em vista que não só a banda Tihuana autorizou a utilização do nome da canção no título da obra cinematográfica, como ainda concordou em alterar trechos da letra para que ela melhor se adequasse à narrativa do primeiro filme.

O relator, Messod Azulay, afirmou que as marcas “Tropa de Elite”, referentes à sequência de filmes, não se confundem de forma alguma à música da banda Tihuana, tendo em vista que o sucesso do filme deu tanta fama à expressão, que fez com que ela passasse a ser associada diretamente ao filme e adquirisse nova conotação.

O ministro também destacou o fato de as marcas serem compostas pela mesma grafia e arte do sinal veiculado nas obras cinematográficas, de forma que elimina a possibilidade de confusão pelo público.

Em caso de dúvidas sobre o assunto acima, por favor, não hesitem em nos contatar.

Paula Mena Barreto
Campos Mello Advogados in Cooperation with DLA Piper
T: +55 21 3262-3028

Posted in ICSID International Arbitration Mexico Venezuela

Investment Protection in Latin America: Mexico Takes One Step Forward, Venezuela Takes Two Steps Back

Mexico has signed the Convention on the Settlement of Investment Disputes between States and National of other States, better known as the Washington Convention or theICSID Convention. This important development is expected to make Mexico considerably more attractive for foreign investors.

In contrast, the Venezuela National Constitutional Assembly, which was formed in mid-2017 – many say unconstitutionally and illegally – recently approved new restrictions on foreign investment.

The existence of neutral dispute resolution mechanisms between a foreign investor and a host state is an important condition in any international investment project. A prudent foreign investor exploring a possible investment always starts by confirming that a state adheres to certain multilateral investment treaties. The stark contrast between Mexico and Venezuela offers an interesting perspective for those seeking to invest in Latin America.

Find out more.

For more information please contact:

Cecilia Azar
Partner, Mexico City

Christina P. Maccio
Partner, Houston

Marlon Meza
Foreign Legal Consultant, Houston

Harout Jack Samra
Associate, Miami

Posted in Anticorruption Mexico

Mexico’s General Law on Administrative Responsibilities: Preventing and Fighting Corruption

In 2015, Mexico embarked on sweeping constitutional reforms that created the National Anticorruption System, empowering competent authorities at all governmental levels to prevent and fight corruption.

As part of these reforms, in July 2016, several key pieces of legislation were amended and four new laws were enacted – among them the General Law on the National Anticorruption System (GLAR).

This article focuses on the applicability and scope of GLAR, which entered into force in July 2017. We will answer the following questions: (i) may legal entities be held liable? (ii) what types of fines may be imposed? and (iii) are there any mitigating factors?


Under GLAR, all kinds of companies doing business in Mexico can be held liable for acts committed by their employees, managers, directors or other persons acting to obtain an improper benefit on behalf of the legal entity, if the acts constitute so-called “serious administrative offenses.” Foreign companies may be also on the hook when doing business in Mexico and when having contact with Mexican public officials.

The following offenses are considered to be “serious administrative offenses” in which a private entity may be considered to be involved:

  • Bribery
  • Unlawful participation in administrative proceedings when entity is excluded from public procurement
  • Influence peddling
  • Use of false information
  • Embezzlement
  • Improper hiring
  • Collusion
  • Obstruction of investigation


The kind of liability GLAR establishes towards legal entities is administrative liability. The administrative sanctions and administrative procedures provided under the GLAR are independent from the criminal sanctions and criminal procedures that may be applicable under Mexican Criminal legislation.

The administrative sanctions that may be imposed over companies under GLAR are the following:

  • Fine of up to twice the benefit obtained, or up to approximately US$6.466 million
  • Disbarment from public procurement for up to ten years
  • Suspension of activities for up to three years
  • Forced corporate dissolution
  • Indemnity for damages caused to the public Treasury

In order for the sanctions related to suspension of activities or forced dissolution to be imposed, two elements must be met:

  • (i) the private entity must have obtained an economic benefit and
  • (ii) it has to be proven that the partners/shareholders, management or surveillance departments of the private entity were involved in the performance of the corrupt practice, or that the private entity has been systematically used to commit corrupt activities.


GLAR provides the option for legal entities to mitigate liability. These are the factors taken into consideration for mitigating liability:

  • Voluntary disclosure
  • Cooperation with authority
  • Adoption of compliance programs
  • Adoption of mitigation measures

For more information please contact:

Eduardo J. Gallastegui Armella
Managing Partner, Mexico City
T +52 55 5261 1807

Maria Eugenia Rios
T +52 55 5261 1800

Paola Aldrete
T +1 212.335.4549


Posted in Tax uruguay

Tax advantages of Uruguayan holding companies

The following is a guest post by Guzman Ramírez  from Bergstein Abogados, an independent law firm in Uruguay.

Uruguay offers a number of tax advantages to multinationals. This has become especially so in the wake of the substantial tax reforms which have taken place in Uruguay in the last few years, under which Uruguay has been excluded from OECD blacklists.

In Uruguay, corporations can be used to engage in offshore holding activities. This is what is known as sociedades de inversion or “holding companies”, ie, companies expressly contemplated under Uruguay’s Companies Act whose main purpose is to participate in the capital of other companies.

Such holding companies are able to set up legal structures in Uruguay with taxation that is very low − indeed, practically zero. This is so because, for tax purposes, Uruguay maintains the so-called principle of the source (principio de la fuente): companies only pay corporate income tax (Impuesto a las Rentas de las Actividades Económicas − IRAE) on locally sourced income; foreign-sourced income is excluded from corporate income tax. Furthermore, the net worth tax (Impuesto al Patrimonio − IPAT), which taxes assets at a rate of 1.5 percent, and VAT (22 percent) are only levied on assets and investments located inside Uruguayan territory.

Therefore, insofar as a holding company does not conduct any activities in Uruguay, no local taxation applies, except for a fixed annual payment of approximately US$600, called the Corporations Control Tax (Impuesto de Control de las Sociedades Anónimas − ICOSA).

—As a result, income obtained from the sale of participation in foreign companies or businesses, dividends obtained from foreign entities in whose capital the Uruguayan holding company participates, assets allocated in the liquidation proceedings of a foreign company and interest collected from individuals or companies abroad are all deemed to be foreign income, excluded from taxation in Uruguay.

In addition, where there is no locally sourced income, then remittance of dividends remains tax free. In Uruguay, remittance of dividends is only taxed where the following conditions are cumulatively met: the company based in Uruguay is subject to corporate income tax in Uruguay; and dividends effectively derive from income subject to corporate income tax. In consequence, shareholders of holding companies based in Uruguay are not subject to personal income tax (Impuesto a la Renta de las Personas Físicas − IRPF).

Guzmán Ramírez
Tax Department
Bergstein Abogados
Montevideo, Uruguay



Posted in Argentina

Argentina: Financial Information Unit creates Registry of Independent External Auditors of Money Laundering and Terrorism Financing Prevention

 This is a guest post of RCTZZ Abogados in Argentina.

Argentina’s Financial Information Unit (FIU), the governmental authority that enforces the law on prevention of money-laundering activities and terrorism financing has introduced a resolution stating that financial institutions (FIs) are obligated to review their systems with the goal of preventing money laundering and terrorism financing (AML/TF). Resolution Nr. 30-E/2017 (Res. 30) requires FIs as “obliged subjects” –ie, FIU’s reporting agents – to review their AML/TF systems at two levels, externally and internally.

The rule requires FIs to use an independent external auditor (IEA) with proven expertise in the prevention of money laundering and terrorism financing to issue a yearly report about the quality and effectiveness of their AML/TF measures. The report should include an assessment of the appropriateness of their underlying corporate governance rules.[1] Any areas, processes and other topics that the auditor finds ineffective should be identified in the report; the report should also introduce a plan to correct these flaws, with a detailed schedule.

To support the practical application of Res. 30, FIU issued Resolution 67-E/2017 (October 9, 2017) (Res. 67), creating the Registry of Independent External Auditors of AML/TF and setting out such auditors’ qualification requirements, factors incompatible with serving as an AML/TF auditor, the registration process, the contents of their reports and a disciplinary regime. The Registry shall be open to public access.

Qualification requirements to become an IEA are a university degree, a sound background in AML/TF issues and at least five years of professional experience related to AML/TF.

Incompatibiltiy factors may include being:

  1. a partner, shareholders, director or member of the supervisory committee or syndic of the obliged subject that hired the IEA or of persons or entities economically related thereto
  2. a spouse or relative of the controlling partner or shareholder of the obliged subject, having decision power over it or over a member of the board of directors or the supervisory committee or syndic of the obliged subject that hired the IEA (incompatibility includes next of kin by blood and affinity to the third degree)
  3. an employee of the obliged subject that hired an IEA or of entities of the same economic group
  4. An external auditor and/or partner of the external auditor’s firm of the obliged subject at the same time[2] (this impediment extends to the economic group)
  5. a borrower and/or a creditor of the obliged subject in an amount that may affect the independence of its duties and
  6. other conflicts of interests of a personal, labor, economic or financial nature that may affect the IEA’s independence.

Obtaining approval for an IEA

An obliged subject seeking to fulfill its obligation should request the registration of one or more IEAs in the Registry by e-filing several pieces of information and documents about the IEA????. The obliged subject must preserve a record of the IEA with all this information available for the FIU for five years. The IEA may practice only after the corresponding validation of its record in the Registry is issued.

Contents of the report

The IEA audit or review report shall describe in detail the internal control measures in place, assess its operative efficacy and, if applicable, propose possible corrections or improvements. The IEA’s report is not a financial statement’s audit report.

The report shall be confidential. It shall include at least some of the following information:

  • The term of review (which may not be longer than one year vis-à-vis the previous term) that need not coincide with the FI’s fiscal year closing date
  • The scope of works (risk management assessment, corporate governance and internal policies and rules, KYC  policy compliance, monitoring and reporting systems, clients’ record keeping, regulatory compliance, training plan and internal controls on AML/TF)
  • An opinion about the quality and effectiveness of the AML/TF System and
  • The findings, suggested measures and proposed schedule of compliance.

Annual reporting deadline

By September 15 every year, the IEA should inform the FIU of the results of its reports. FIU may request the IEA’s reports and working papers.

Penalties in case of infringements

In case of infringements of Res. 67, IEAs may be subject to warnings, suspension from the Registry (for a period ranging from six months to two years), exclusion from the Registry (for up to five years).

Things to come

Res. 67 enters force on December 31, 2017.

It is worth noting that the FIU is in the process of drafting new resolutions adopting the risk-based approach standard for each obliged subject[3]; so far, the first such resolution covers FIs.[4]

We should expect intense activity on this matter from the FIU in the coming months. Res. 67 will certainly attract AML/TF professional firms eager to provide independent external review or audit services and become leaders in this market.

* * * * *

Hernán D. Camarero, Partner in Richards, Cardinal, Tützer, Zabala & Zaefferer’s Corporate/M&A, Banking and Finance and FX Controls practices.

Please do not hesitate to contact the author at Richards, Cardinal, Tutzer, Zabala & Zaefferer s.c. –Abogados-, an independent law firm in Argentina, for further information at

[1]               § 19, Par. a), AML Act.

[2]               This cause shall be enforceable while the Central Bank of Argentina’s rules mandate FIs’ external auditors to issue a report on AML/TF within the framework of their external audits.

[3]               Such as inter alia money remittances companies, gambling companies, stock broker-dealers, investment funds managing companies, marchands, insurance companies, credit card companies, Argentine Securities and Exchange Commission, valuables transportation companies, couriers, insurance agents, accountants, realtors, car manufacturers and car dealers, and trustees.

[4]               Please see our article published at


Posted in chile Financial Services Fintech Regulatory Technology

Blockchain y Criptomonedas, Contratos Inteligentes, tecnologías en la mira de la regulación

Hace ya algún tiempo que Bitcoin se encuentra en la mira de las autoridades nacionales e internacionales, quienes han discutido acerca de la necesidad de su regulación; sin embargo, este interés se ha exacerbado más ahora que su valor ha alcanzado máximos históricos y ha superado los US$ 7.000 en las últimas semanas.

Las criptomonedas o criptodivisas, dentro de las cuales encontramos Bitcoin, son monedas digitales, de código abierto, que basan su funcionamiento en un protocolo P2P (puerto a puerto) completamente descentralizado, esto es, que no dependen ni están respaldadas por autoridades centrales, terceras partes, o mercados internacionales.

Si bien han levantado sospechas en cuanto a su legitimidad, la utilidad de las criptomonedas no ha sido puesta en discusión. Entre otras ventajas, las criptomonedas –a diferencia del dinero digital como las tarjetas de crédito- eliminan la intermediación, reduciendo drásticamente los costos de transacción y las demoras en el pago efectivo.

No obstante el atractivo de las criptomonedas, los expertos advierten que debe prestarse mayor atención al Blockchain – la tecnología subyacente o de soporte de la Bitcoin. En términos simples, el Blockchain – o cadena de bloques- es una base de datos distribuida, que registra bloques de información y los enlaza, permitiendo: (i) la recuperación de la información y (ii) la verificación de que ésta no ha sido cambiada.

Las principales características de Blockchain son (i) la descentralización, esto es, que no depende de instrucciones de terceras partes para ejecutarse; y (ii) la seguridad de los datos encriptados, consensuando la información entre los distintos nodos -servidores que reciben, almacenan y envían los datos-  que conforman esta red, que es por tanto difícil y costosa de alterar.

Dentro de las funciones más interesantes del Blockchain para la industria legal, está la posibilidad de implementar “Contratos Inteligentes”, o acuerdos entre partes que se ejecutan automática y directamente sobre activos, a medida que se verifican las condiciones pre acordadas, objetivas y no dependientes de valoración humana. Desde el punto de vista del Derecho, la implementación de los llamados Contratos Inteligentes podría dar lugar a una teoría sobre la formación y ejecución contractual de una manera completamente distinta a la tradición jurídica contemporánea, eliminando toda intervención humana en el proceso de ejecución.

Esta tecnología revolucionaria plantea grandes desafíos legales, derivados principalmente de su descentralización, en contraposición al criterio territorial de la ley hasta ahora; ¿Qué jurisdicción y leyes son aplicables a un sistema que no está “almacenado” en ningún lugar, o incluso en varios a la vez? Y derivado de esto mismo, ¿de qué forma puede hacerse exigible una transacción no autoejecutable realizada a través del Blockchain? ¿De qué forma y ante quién puede solicitarse la de nulidad de un contrato o cláusula programada sobre este sistema? ¿Cómo tributan las criptomonedas, u otras transacciones sobre Blockchain? ¿Qué implicancia sobre la privacidad de los ciudadanos tiene existencia de una base de datos que no puede ser borrada? ¿Qué nuevos desafíos se presentan en cuanto a la ciberseguridad? Nuestro ordenamiento, basado en los sistemas de confianza centralizados por ministros de fe, en general dependientes de organismos públicos, podría alterarse radicalmente con Blockchain, que podría sustituir a Notarios, Conservadores y Archiveros.

Finalmente, el enfoque a nivel comparado en esta materia ha sido dispar. A principios de noviembre el Banco Central de Australia sostuvo que aún no valía la pena regular esta materia. Las autoridades tributarias y financieras, en cambio, ya han esbozado algunos intentos normativos; en Ucrania, por ejemplo, se está estudiando un proyecto legislativo relativo la tributación de operaciones con criptoactivos; en Rusia, se está investigando la regulación para la adopción de esta tecnología en los mercados financieros; tanto Singapur como China están efectuando pruebas con Blockchain para transacciones interbancarias. En Chile, por su parte, una serie de emprendimientos, tanto de entidades públicas y privadas, buscan aprovechar la tecnología Blockchain y las ventajas de las criptomonedas.


For more information, please contact:

Felipe Bahamondez

Paula Droguett

Paulina Farias

Posted in Brazil Financial Services Governance Insurance Pension Plan Regulatory Reinsurance

Brazil: New Insurance Rules – Retrocession and new resolutions for pension plans


This new regulation restricts private pension plans, and insurance cooperatives, microinsurers and insurance companies operating only with DPVAT (mandatory auto insurance for personal damages caused by vehicles) to accept risks in retrocession¹.

Pursuant to this new rule, retrocession with insurers placed in Brazil or abroad can be placed directly with the insurer or intermediated by reinsurance brokers, provided that the insurer operates in the line of business which is being retroceded.

Insurers can accept in retrocession business from reinsurers based abroad, registered or not by SUSEP. Such placements may be intermediated by foreign reinsurance brokers not registered with SUSEP. However, insurers cannot accept retrocession business from foreign insurers, registered or not with SUSEP.

(Portuguese language is below) Continue Reading

Posted in Argentina Real Estate

Argentina: Restrictions On ownership of Rural Land by Foreigners

Argentina’s Act 26,737, enacted in 2011, restricts foreign ownership of rural real estate. The restrictions imposed by Act 26,737 are relevant for any project that involves acquisition of rural land in Argentina .

The Act imposes several limitations. Under the Act and its applicable amendments, foreign ownership is defined as any acquisition, transfer of ownership or possession rights, whatever the type or name granted by the parties or duration of the same, in favor of a series of points, set forth below. Continue Reading

Posted in Arbitration Brazil Colombia Foreign Arbitral Award ICSID International Arbitration Mexico UNCITRAL

Enforcement of Foreign Arbitral Awards in Key Latin America Jurisdictions

Published in the Global Arbitration Review, the chapter on the Enforcement of Foreign Arbitration Awards in Key Latin America Jurisdictions summarizes the arbitration law and practice of certain jurisdictions that have experienced an important development in the past 20 years in their arbitration landscape; they are also countries with significant economic growth. The countries in question are Brazil, Colombia, Mexico and Peru. This chapter focuses on the legislative efforts and the attitude adopted by the courts in these countries in regards to the recognition and enforcements of foreign arbitral awards. For full text, please click here. Continue Reading