Doing Business in Latin America: What the Contracts Don’t Tell You

A signed contract is the start of the relationship, not the end of the risk.
For a business entering a new market, the contract can feel like the finish line. Terms are agreed, signatures are exchanged, and attention turns to delivery. In Latin America, this is often the precise moment when the most avoidable problems begin. A contract records what the parties intend. It does not, on its own, determine how a local registry will treat it, how a regulator will interpret it, how quickly a payment will actually clear, or how a counterparty will respond when circumstances change. The distance between the written deal and the working deal is where cross-border ventures most frequently come unstuck.

This is the fourth article in AGA’s international arbitration and cross-border business series. It began with Brazil as a neutral platform for resolving global disputes (Madrona Advogados), and has since examined how BRICS is reshaping cross-border investment disputes (LexCounsel, India) and the enforcement of foreign arbitral awards (Albagli Zaliasnik, Chile). The thread running through all of them is predictability — and predictability, in practice, depends on far more than the wording of a clause.

Two of the region’s most active markets illustrate the point. Mexico is absorbing record foreign investment as global supply chains relocate closer to the United States. Peru continues to draw international capital into mining, energy and infrastructure. Both are open, opportunity-rich markets. And in both, the gap between a contract’s assumptions and its local execution is where experienced counsel earn their keep.

In Mexico, much of what decides whether a venture succeeds is handled outside the commercial terms entirely — in customs and trade formalities, regulatory approvals, and the way obligations must be documented to satisfy the authorities. For companies riding the nearshoring wave, these are not administrative footnotes; they are the difference between a deal that works and one that stalls.

Adrián Vázquez, Managing Partner, Vázquez Tercero & Zepeda (VTZ), Mexico comments:

"Foreign companies arriving in Mexico often assume that a well-drafted contract settles the matter. In reality, the agreement is only the first layer. What determines whether a project succeeds is everything the contract takes for granted — the customs and regulatory formalities, the way obligations are documented for the authorities, and the local requirements that must be met before a commitment becomes fully implementable and operational.

"With nearshoring drawing unprecedented investment into Mexico, the businesses that plan for these realities from the outset are the ones that avoid disputes later."

Peru tells a similar story from a different angle. Here the exposure tends to sit in the transaction itself — in due diligence, corporate formalities, permitting, and the way a deal is structured on the ground. International parties are sometimes surprised by how much of the real work lives outside the signed document.

Juan José Cárdenas, Partner, Damma Legal Advisors, Peru comments:

"In Peru, as across the region, the difference between a smooth transaction and a costly one usually lies in what was not written down in the contract. Due diligence, corporate regulations and customary formalities and local deal structuring matter as much as the contractual and commercial terms themselves.

"International clients are sometimes surprised by how much sits outside the contract — but with the right local advice, those realities can be anticipated and are entirely manageable. The contract sets the intention; local execution decides the outcome."

For international businesses, the lesson is not that Latin America is difficult, but that it rewards preparation. A contract drafted in London, Madrid or New York carries assumptions that do not always travel. Closing the gap between those assumptions and local reality is precisely the work that AGA’s representative firms do across the region — and it is why coordinated, on-the-ground advice matters long before any dispute arises.

The firms that navigate these markets well are rarely the ones with the longest contracts. They are the ones with the right local partners — advisers who know exactly what the document leaves unsaid, and how to make it work in practice.

To discuss doing business across Latin America, or to connect with AGA’s representative firms in Mexico, Peru and the wider region, contact Sophia Rook-Blackstone at Alliott Global Alliance.

About Alliott Global Alliance:

Founded in 1979, Alliott Global Alliance is a global alliance of independent law, accounting, and advisory firms, operating from more than 340 offices in over 100 countries and providing clients with coordinated, multidisciplinary support worldwide through a trusted global platform. The Alliance is ranked in Chambers and Partners as a Leading Law Firm Network, reflecting the strength and international capability of its legal practices — Together as One.

Our firms share a common purpose: to exchange knowledge, capability, and opportunity in ways that strengthen their businesses and make the world smaller for the clients they serve. This collaboration is underpinned by a spirit of openness and mutual respect, enabling each to broaden its experience, deepen its expertise, and achieve greater success through coordinated international collaboration.

Alliott Global Alliance continues to expand its global presence, with a strategic objective to be represented in 120 countries by 2030. A limited number of affiliation opportunities remain available for independent professional firms that meet our standards and share our commitment to international collaboration. For further information, please contact membership@alliottglobal.com.