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Latin America: What happened in 2020 and significant events in 2021

Latin American Law: Year in Review 2020 and Year to Come 2021 summarizes some of the major developments in Latin America last year, and a selection of key changes that we anticipate over the coming year. There are links to further reading, where available.
Explore our overview of key developments below.

Key updates across


LatAm countries in 2020 and 2021

“The COVID-19 pandemic has been a true accelerator of many trends that already existed including remote working and a shift to renewable energy and e-commerce. Latin America has not been an exception to this with most countries in the region adapting their legislation to allow businesses to carry on. We expect these trends to continue and become part of the ‘new normal’ in the region.”

Conrado Tenaglia, Co-head Latin America Practice, New York

Conrado Tenaglia

Significant legal and regulatory events in 2020

Explore the tabs below to review the key developments you need to be aware of from 2020


Response to the COVID-19 pandemic: Measures requiring social isolation and closed borders were enacted, resulting in a significant slowdown of economic activity.

Other government measures included: Guaranteeing payments to affected workers; employer payroll contribution exemptions; fixing prices for essential products; barring the suspension of certain services; and freezing mortgage payments.

The Central Bank (the “BCRA”) has taken steps to provide working capital credit facilities, as well as to establish refinancing plans for local currency denominated debt.

Restructuring of the public debt: The restructuring of the foreign-law-governed sovereign debt reached a 99% acceptance rate among creditors. Regarding the domestic-law-governed sovereign debt, the restructuring also involved a broad acceptance by institutional investors. The government is still negotiating with the IMF to convert its stand-by program, with a repayment term of four years, into an Extended Fund Facility, extending its repayment term for up to 10 years.

FX restrictions: The BCRA tightened controls on the access to the Foreign Exchange Market for the repayment of principal amounts of external financial debt and repayment of foreign currency denominated domestic securities.

Companies facing maturities of principal exceeding US$1m per month, in U.S. dollar-denominated debt, were requested to submit a mandatory restructuring plan.

Foreign exchange transactions by Argentine residents were levied with a new federal tax created by the Public Emergency Law (Tax for an Inclusive and Caring Argentina or “PAIS”).


Response to the COVID-19 pandemic: Government measures included expenditures on health, social, tax, labor and economic incentives.

Some additional remedies included the creation of an emergency employment maintenance program, the extension of specific credit lines and the facilitation of trade.

Despite these measures, during 2020, the Brazilian Real devaluated by approximately 40%.

India cooperation and facilitation of investment: Brazil and India signed the Agreement on Investment Cooperation and Facilitation (“ACFI”), providing an institutional framework to manage an investment cooperation agenda, to mitigate risks and to establish dispute prevention mechanisms.

Instant payments system: The Central Bank implemented the Instant Payment System (“SPI”), a centralized solution for settlement in real time of transactions carried out within an instant payment scheme. This places Brazil at the forefront of the payments market worldwide.

Brazilian General Data Protection Law (“LGPD”) enacted: LGDP established rules on the collecting, handling, storing and sharing of personal data by organizations. Compliance with the new rules will likely require a lot of attention and careful planning from companies dealing with personal data.

U.S. trade and economic cooperation: In October 2020, Brazil and the United States signed a Protocol on the Agreement on Trade and Economic Cooperation (“ATEC”).

The Protocol updates the ATEC, with three new annexes comprising provisions on Customs Administration and Trade Facilitation, Good Regulatory Practices, and Anti-corruption clauses.


Response to the COVID-19 pandemic – State of catastrophe: A national curfew, along with several circulation restrictions, both national and international, were established as of March 2020.

Tax remedies included the temporary reduction of certain corporate tax rates, the refund of the excess of VAT credit on the acquisition of goods or use of services and an extension of the deferral for the payment of VAT to certain companies for up to three months.

Regulatory measures were adopted to facilitate credit flow: The Financial Market Commission’s Council approved new measures aimed at granting more flexibility to the financial system. These measures included the flexibilization of financial coverage requirements for the banking industry and an extension of the term that banks have in order to transfer assets received in payment.

Teleworking law – New Chapter IX of the Labor Code: The chapter regulates the terms and conditions applicable to remote working and telework.

New law on fraud and unauthorized use of payment methods: The new regime established that the burden of proof for the existence of a transaction lays on the issuer and sets shorter periods for canceling charges, which vary based on the transaction amount.

New law No. 21,236 on financial portability came into force: The law provides for individuals and small companies to be able to transfer their financial products and services between different providers.



Response to the COVID-19 pandemic – Fiscal support package of approximately US$8.9bn: The fiscal package is aimed at supporting the health sector, vulnerable groups and affected companies in paying workers and gaining credit access for companies in specific sectors. It also seeks to increase financial liquidity.

During 2020 and 2021, the fiscal rule that limits the borrowing capacity of the government was suspended. 

The Law of payment in fair installments was enacted: This law obliges companies to pay their suppliers within 45 days, protecting small businesses and avoiding bankruptcies.

The Financial Regulation Unit established a regulatory sandbox: The regulation applies to Fintech companies and financial institutions willing to test new products, channels or services in an experimentation space under the supervision of the Financial Superintendence and the FRU.

Infrastructure – The government launched “Compromiso por Colombia”: The program seeks economic recovery, with infrastructure as a key driver. There are 79 projects with an estimated investment of US$17.8bn that would create 900,000 jobs.

To solve the financing needs, a new financial product (“Payment for Execution Certificates”) was created that is adaptable in terms of costs, conditions and deadlines and can be negotiated in the market.



Response to the COVID-19 pandemic: The Government imposed closures, operating restrictions, cessations of terms, suspensions of statutes of limitation and took extraordinary public health actions.

Commercial banks were allowed to grant payment deferrals on loans without resulting in defaults or additional capitalization requirements and issuers of securities were also allowed to postpone reporting obligations.

The “United States-Mexico-Canada Agreement” came into force: The USMCA is the successor to the previous North American Free Trade Agreement (“NAFTA”). It regulates labor rights (with emphasis on the rights to organize and collective bargaining), dispute resolution procedures and responses against specific facilities where it is presumed that fundamental labor rights have been denied.

Additionally, eight parallel agreements on the transport of goods, environmental protection, intellectual property, non-tariff regulations and restrictions applicable to the automotive industry were enacted.

A new Intellectual Property Law was enacted: In the context of USMCA negotiations, several aspects of the previous Intellectual Property Law were modernized to help ensure the protection and enforcement of intellectual property rights.

Energy – Actions aimed at strengthening CFE and Pemex were taken: The federal government adopted actions aimed at strengthening its electricity and petroleum companies to the disadvantage of clean energy projects.

Labor – Implementation of the first phase of the Labor Reform: The Federal Center for Labor Conciliation and Registration (“CFCRL”) will become operational in November 2020 and will oversee the registration of unions and collective bargaining agreements at the national level.

Several States are ready to begin with the operation of both their Local Conciliation Centers and their specialized Labor Courts.


Response to the COVID-19 pandemic – State of Emergency: The government ordered a general lockdown, mandatory social isolation and the suspension of all non-essential activities, slowing down the growth of the economy and leading to a decrease in formal employment and a reduction in wages.

The Government implemented a stimulus package equivalent to 16% of Peruvian GDP, including tax relief measures, public spending, access to pension fund accounts and severance indemnity deposits, and liquidity programs. Nonetheless, according to the Central Bank, the GDP is expected to contract by 12.5% in 2020.

Political developments: The confrontation between the Legislative and the Executive branches continued during 2020. On January 26, 2020, an extraordinary congressional election was held which determined that no political party holds the majority of congresspeople.

In November, Congress vacated President Vizcarra due to corruption allegations, leading to the appointment of interim presidents Manuel Merino and Francisco Sagasti, successively.

Infrastructure projects: Although the construction sector has been one of the hardest-hit by the COVID-19 pandemic, there has been progress in connection with certain projects. For example: (i) the execution of a bilateral technical assistance agreement with the UK, for the reconstruction of the regions affected by the Coastal El Niño 2017 Phenomenon; (ii) the construction of Line 2 of the Lima and Callao Metro, with a total investment of US$5.6m; and (iii) the concession for a wastewater treatment plant for Lake Titicaca.

Tax: The Tax Administration (“SUNAT”) implemented the Common Reporting Standard (“CRS”) in order to share financial information from taxpayers with other jurisdictions that have a treaty with Peru and/or are bound by the decisions of the Andean Community of Nations (Colombia, Bolivia and Ecuador). Additionally, SUNAT has complied with the requirements to receive financial information of Peruvian taxpayers in foreign jurisdictions, as stated in the multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Significant legal and regulatory events in 2021

In 2021, we expect these trends to continue and become part of the “new normal” in the region. As economic growth recovers around the world, the region’s abundant raw materials should again be in high demand, fueling production and work.


Economic prospects: By December 2020, the Argentine GDP is expected to fall by 12.1%, and it will take the economy at least until 2023 to recover from the loss.

Monthly inflation rates measured until August 2020 for retail prices averaged between 2.7% and 3.5% according to official and private estimates. They are expected to continue rising for the foreseeable future, amounting by December 2020 to a 37.8% inter-annual rate according to the most optimistic analysts, and up to a 48% one for the more pessimistic ones.

While the restructuring of the Argentine public debt is promising, to honor those commitments, the current administration should be able to reach a sufficient fiscal surplus to purchase foreign currency to repay debt or roll-over the new maturities. This means issuing new debt in order to pay old debt. In the long term, the new maturities profile will be a challenge for the new administration taking office in 2024 since, as of 2025, Argentina must pay around US$11.5bn on average per year.

Mid-term legislative elections: Argentina's mid-term legislative elections will take place in October 2021 with the objective of renewing 127 of the 257 seats in the House, as well as 24 of the 72 seats in the Senate.


Overview: Despite the promising start of 2020, the COVID-19 pandemic has negatively affected the expectations for the Brazilian market.

According to the most recent forecast by the IMF, the Brazilian GDP is projected to decrease by 5.8% in 2020.

As to the GDP forecast for 2021, the Economy Ministry recently indicated an expected growth of approximately 3.2%, although the outlook is still subject to a high degree of uncertainty due to the COVID-19 pandemic.

The M&A industry expectations are that the effects of the COVID-19 pandemic, in particular lower valuations and a potential record number of distressed assets and distressed sellers, may generate attractive business opportunities in the region.

An incipient recovery is underway but uncertainty around the COVID-19 pandemic and the deterioration of public finances remain areas of concern.

2020 municipal elections: The 2020 Brazilian municipal elections will take place in November 2020. Electors will choose Mayors, Vice Mayors and City Councillors.

The electoral race is particularly important for São Paulo and Rio de Janeiro, the country’s two most populated and wealthiest cities, which support a combined GDP of nearly US$180bn.

Tax reform: In July 2020, the Federal Government presented a project to simplify the federal taxation on gross revenues. A social contribution on goods and services (“CBS”) is expected to replace current taxes (“PIS” and “COFINS”).

This is the first of a series of proposals to be sent to Congress by the Federal Government, which include the taxation of dividends (and reduction of corporate income tax), creation of a tax on digital transactions and reduction of payroll taxes.

The Federal Government reiterated its intention to implement a more comprehensive tax reform, in phases, with additional measures to be seen throughout 2021, in order to simplify the Brazilian taxation system.


New constitution: Since October 2019, Chile has witnessed social disorder which led to the execution of the “Acuerdo por la Paz Social y Nueva Constitución” (Agreement for the Social Peace and new Constitution). This called for a public referendum which voted in favor of the drafting of a new constitution.

Regulatory implementation of Basel III guidelines: The Financial Market Commission’s Council will continue working on issuing new regulations, with the purpose of implementing the amendments introduced in 2019 to the General Banking Act, inspired by the Basel III guidelines.

These regulations will be gradually implemented, up to 2025.

Implementation of new financial supervision scheme: In October 2020, the Financial Market Commission’s Council announced a gradual transition from the current supervision scheme, based on the supervised industries, to a model based on two main pillars: (i) Prudential, focused on solvency and adequate risk management of supervised financial institutions, and (ii) Market Conduct, aimed at ensuring the transparency and integrity of the stock market and the protection of financial customers.

This new structure reflects the advice provided by the IMF and the comparative experience of globally integrated financial regulators.

Pension reform: The Chilean pensions system, currently governed by Law Decree No. 3,500 of 1980, has been under public scrutiny, mainly due to its low replacement rates (around 37%). The government has passed a bill proposal aiming to increase mandatory contributions (currently 10% of salaries) and strengthen the subsidized pensions of low-income retired people. However, it is expected that, during 2021, these discussions will lead to an amendment to the aforementioned Law Decree, or the enactment of a new pensions law.



Tax reform: Through a tax reform, the government is expected to seek not only to increase collection, but also to reduce public expenditure to guarantee the country’s fiscal sustainability. On the collection front, it is necessary to increase the Nation's income by 2% of GDP (US$5.32bn). The discussion of the reform will begin in the first semester of 2021.

Labor reform: The denominated Employment Mission is expected to make recommendations to reduce informality, strengthen the social protection system, reduce labor costs and promote employment in the country. Different economic sectors have proposed making more flexible working schemes to allow, for example, hourly work, with the aim of creating more jobs. The Employment Mission will be in charge of studying these initiatives and presenting proposals for a possible labor reform in the country.

Pension reform: The Pension reform will be treated in 2021, with the objective of reducing the subsidies given by the government to high-income people, in order to benefit the elderly with no income. It is also proposed to eliminate the average premium regime and for “Colpensiones”, the state pension fund, to act as a private administrator.

Capital market reform: The Capital Market Mission has already produced 63 recommendations in order to boost capital markets and modernize the financial system and the payments industry, through various initiatives that focus on supporting the economic reactivation of the country.


Pension plans: Amendments to the rules applicable to pension funds have been presented to Congress. These amendments seek to regulate (and cap) fees, reduce the time that employees need to work in order to receive a pension and gradually increase the employers’ mandatory contributions to pension funds.

Taxes: The federal government has presented to Congress an economic plan for 2021 that includes amendments to various tax provisions. These proposals intend to tighten the regulatory framework and, among other things, allow the tax authorities to initiate criminal actions in connection with tax claims.

Labor: Various bills were presented to Congress to amend the Federal Labor Law in connection with telework. The most relevant features include digital disconnection, rest days, maternity leave, and temporary disability periods.

Another bill addressing outsourcing was presented to Congress limiting outsourcing and providing for the creation of a National Registry of Staffing Companies.


2021 general elections: General elections will be held in April 2021 to elect the new president of Peru, two vice presidents, 130 members of congress and five Andean parliamentarians for the government period 2021-2026. The elections will take place in an atmosphere of high uncertainty since the economic downturn caused by the COVID-19 pandemic and the remaining tensions between the Congress and the Executive branch are expected to affect political stability until such elections take place.

Mining: Mining has a fundamental role in a progressive and safe reactivation of the economy. According to the Central Bank, metal mining GDP will grow by 14.4% in 2021. As a result, mining will be one of the sectors with greater recovery next year.

In September, the Ministry of Energy and Mines reported a portfolio of projects under construction worth US$8.3m.

Antitrust: A new merger control regime was approved, pursuant to which the Peruvian antitrust agency was empowered to review and authorize corporate mergers that exceed certain thresholds. The regime was subject to certain amendments, including the extension of the wait-period for its entry into force until March 1, 2021. The merger control regime could undergo additional essential modifications, including the adjustment of the threshold limits.

Infrastructure: The government announced its intention to encourage the execution of public works through the government-to-government modality, especially for projects of certain magnitude and complexity. It is expected that during 2021, important projects such as the Massification of Natural Gas and Distribution of Natural Gas in Seven Regions and the Huancayo-Huancavelica Railroad modernization will be awarded.

Tax: An amendment to the “thin cap” rules for interest deduction could be expected in 2021.

A proposal on wealth tax could also be brought to Congress in the short term.

Download your copy of the report:

Year in Review 2020 and Year to Come 2021 - Latin American law


Latin America YIR YTC PDF

Prepared with the collaboration of Bomchil (Argentina), Carey (Chile), Posse, Herrera, Ruiz (Colombia),
Galicia Abogados, S.C. (Mexico) and Miranda & Amado (Peru)

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