Integrated corporate structuring: Combining tax optimisation and legal protection in business turnarounds in Mexico

When approached strategically and creatively, corporate and tax structuring can shift from being a reactive or defensive tool to becoming a powerful opportunity for transformation. It can unlock tax benefits, restore liquidity, and reinforce the company’s legal and financial position.

Integrated thinking: more than just cost reduction

Most traditional restructuring plans focus on immediate actions like downsizing, reducing overhead, or renegotiating debt. An integrated structuring strategy goes further. By combining legal, tax, and asset planning elements into a single, well-executed approach, companies can transform their business model, optimise their tax position, and align their corporate governance with real operational needs.

One of the most underestimated benefits of a well-designed corporate restructuring is the potential to recover tax balances, particularly value-added tax (VAT) refunds. Many companies accumulate significant VAT credits but are unable to recover them due to technical mistakes, non-creditable structures, or exempt operations resulting in lost cash flow. With the right structure, companies may also be able to use tax losses and income tax (ISR) credits, as long as everything is supported by real business substance to avoid tax risks.

This is especially helpful in industries like manufacturing, export, distribution, and construction, where investment cycles are long, and tax recovery needs to be done carefully.

Legal and tax tools for multinational subsidiaries

For Mexican subsidiaries of multinational companies, especially those based in the US, Canada, or the EU, Mexican law provides a variety of legal and tax tools that can drive a successful turnaround when applied through a comprehensive strategy.

• Mergers and spin-offs allow for the reorganisation of business lines, separation of liabilities from strategic assets, and simplification of legal structures to improve fiscal and financial control.
• Separating operational units (for example, placing exempt or zero-rated activities into different legal entities) can enhance VAT creditability and reduce operational risks.
• Use of trusts or asset-holding vehicles helps protect key assets (such as real estate, IP, or specialised equipment), and isolates them from day-to-day business risks, while maintaining economic control.

Key factors for a successful restructuring

Corporate structuring should never be improvised or treated solely as a tax or legal fix. It requires a deep understanding of the business model, financial flows, tax indicators, and capital structure. 

Key success factors include:

• Early identification of tax balances and legal contingencies;
• Full compliance with Mexico’s commercial corporations law, income tax law (LISR), VAT law (LIVA), and other applicable regulations; and
• Proactive coordination with tax authorities, and understanding their internal criteria.

Conclusion

An integrated corporate structure is not just a crisis response – it is a forward-looking strategy to protect assets, improve tax efficiency, and ensure the long-term sustainability of business operations in Mexico and beyond. When legal, tax, and operational aspects are aligned, multinational companies can do more than recover trapped cash flows like VAT. They can build a strong foundation to attract investment, streamline M&A activity, and boost long-term profitability.

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Prof Sergio Guerrero Rosas, Managing Director at Guerrero y Santana, has over 25 years’ experience advising companies from SMEs to multinationals, as well as individuals, on tax and estate planning. He is also Global Vice Chair of the GGI Trust & Estate Planning (TEP) Practice Group.