Interview with Andrey Dorado, expert in M&A and Competition Law in Costa Rica  

"Costa Rica has a very high level of professional talent. There is healthy and relevant competition, which drives continuous improvement in the practice."
 

At Latin Counsel, we have had the pleasure of talking to Andrey Dorado, a key partner in the corporate and financial law area at Arias Costa Rica. With a solid track record and an established reputation, Andrey is the leader of Arias’ M&A (Mergers and Acquisitions) and private equity practices. His experience includes negotiating complex contracts, participating in due diligence and financing processes, and handling iconic transactions such as the acquisition of the Tabacón Hotel and the transaction with Accenture. In addition, his in-depth knowledge of competition law has positioned him as a leader in the country, especially following recent reforms that require transactions to be reviewed by COPROCOM. His vision also extends to the impact of artificial intelligence and soft skills on the future of the profession, as demonstrated by the multiple recognitions he has received from international legal directories.
In this interview, we delve into his career, his achievements, and his perspective on Costa Rica’s dynamic legal and business environment.

Latin Counsel: What originally motivated you to study law and become a lawyer?

Andrey Dorado: Initially, I had several options within the social sciences, but law was the one that appealed to me the most. I wanted to learn about many topics, understand how processes worked, and how I could help people and serve clients.
During my studies, a good friend suggested that I work at a law firm to gain practical experience. That recommendation made all the difference: while I was studying and working as a legal assistant, I had the opportunity to delve into different areas, such as corporate law, intellectual property, and corporate matters required by companies. That early experience was key to my training as a lawyer.

Latin Counsel: Your role as partner in charge of M&A and private equity is crucial. What initially attracted you to this area of law?

Andrey Dorado: Working in M&A and private equity at a firm is really a rush. When you start as an assistant, your first jobs are usually reviewing data rooms. In my early days, they were still physical data rooms, so you literally had to go into a data room and start reviewing files, which were often disorganized.
Over time, you discover that every transaction and every industry teaches you something new. That exposure allows you to understand how pre-contractual and contractual aspects are negotiated and the entire process involved in an M&A transaction. You also come to understand how private equity funds identify their investment opportunities and select their targets in order to start generating synergies.
I wouldn’t say that there is anything that initially attracts you to this area, but once you are in it, it is really fascinating. It involves navigating the business world intertwined with a very relevant legal component, especially in terms of mitigating contingencies and negotiating contracts.
You have participated in a significant number of mergers and acquisitions.

Latin Counsel: Could you describe a particularly complex or memorable case and what lessons it taught you?

Andrey Dorado: Over the years, I have had the opportunity to participate in many relevant cases, but there are two that are especially memorable.
The first was in the telecommunications sector, with the sale of one of the largest operators in the region. The client was based in Europe, so when we started the day, we already had all the follow-up emails and new requests in our inbox. We had to work long hours and adapt to the time differences. The first sale fell through, which led us to litigate the matter. That process was a very important learning experience for many members of the firm, as we had to conduct hearings under foreign law, among other proceedings.
The second memorable case was in the automotive sector, with the sale of a very important distributor in the local market, acquired by a European group. We had to travel to another country to negotiate, which was an enriching experience. During the negotiations, it was necessary to comply with a series of requirements and protocols, and that anecdote always remains a special memory for the team that participated.
Each transaction has its own particularities, but at least those two really stand out and remain etched in our memories.

Latin Counsel: Among your recent transactions are significant deals such as Arenal and Accenture. What would you highlight from these experiences and what lessons did you learn from them?

Andrey Dorado: As I mentioned, each transaction depends on the industry, the counterparties, and the clients, and each one has its own nuances.
For example, the Arenal transaction, which was the acquisition of the Tabacón Hotel in La Fortuna, had several unique features. Our client Pursuit (the buyer) was looking to acquire an "iconic" hotel or asset (that was always the word they used, in the country and in the area), and the Tabacón Hotel fit that vision perfectly.
We had an excellent counterpart, a group of very well-represented sellers, which allowed the transaction to flow smoothly, although we faced certain challenges because it was an asset with hot springs and permit requirements. It was definitely an iconic transaction and a great learning experience for the team.
On the other hand, the transaction with Accenture, a multinational company that is extremely active in the M&A industry, consisted of the acquisition of part of the back office of another multinational company with operations in Costa Rica. This transaction spanned six jurisdictions, and in Costa Rica, the process was particularly relevant, with a sophisticated counterpart who had extensive knowledge of the issues we had to address.
In both transactions, we were able to bring the processes to a close at the signing. There are still some aspects to be completed, but having reached the signing of these two transactions was a very important achievement.

Latin Counsel: Due diligence processes are a vital part of transactions. What advice would you give to a client to prepare optimally for this process?

Andrey Dorado: Due diligence is essential for reviewing the legal contingencies that any company subject to a sale or purchase, i.e., the Target, may have. Each due diligence process is different because it depends greatly on the industry in which the company operates. If it is a telecommunications company, for example, aspects such as permits and regulations (SUTEL) will need to be reviewed; if it is in the agro-industrial sector, other specific issues, such as environmental issues, must be considered.
The key is to identify the core business of the target company and, from there, determine where to focus efforts. An agro-industrial business is not the same as a hotel business or a renewable energy business; each sector requires a specific analysis.
In addition, it is very important to manage the client’s expectations regarding what can be found. The "traffic light" classification is generally used: green issues are straightforward, yellow issues require attention, and red issues need an action plan to mitigate risk.
This message must be conveyed to both clients and internal teams involved in due diligence. This clearly defines what to focus on in order to deliver a report that truly generates value. This report will be key when negotiating a purchase agreement, so it is essential to thoroughly understand the industry and the core of each business.

Latin Counsel: In addition to M&A, you are responsible for the Competition Law practice. How do these two areas complement each other in your daily work?

Andrey Dorado: The relationship between M&A and Competition Law has become much closer since the legal reforms. With the passage of the 2013 law and, subsequently, the 2019 law on strengthening COPROCOM, the obligation to notify the commission before closing a deal was established. This has changed the dynamics over the last six years, as transactions can no longer be closed without the commission’s approval (in cases provided for by law or that meet the established conditions and thresholds).
Currently, it is necessary to consider that the commission may take between 10 and 14 weeks to approve a transaction in phase 1. This timeframe must be provided for in the contract and established as a condition for closing the transaction. Therefore, both areas directly complement each other. In practice, one cannot discuss M&A in Costa Rica without taking into account the requirements of competition law, as the commission’s authorization is, in many cases, an essential step in completing the transaction.

Latin Counsel: What are the most common challenges companies face when notifying a merger to the Commission for the Promotion of Competition in Costa Rica?

Andrey Dorado: When we submit a notification, it must include all the requirements set forth in the regulations. However, in almost 100% of cases, the commission asks follow-up questions or requests additional information on a specific point. Often, the challenge for companies is that they do not necessarily have the requested information, such as market shares or participation percentages. Sometimes they even tell us that there is no way to obtain this data from another source, which complicates the process.
Therefore, one of the main challenges when submitting notifications is being able to provide the commission with the required information, even though clients do not always have it available. In addition, the commission often asks for more detailed explanations about whether the transaction is regional or global and about all the components involved. This, in turn, can raise confidentiality issues, as clients are often reluctant to share so much information.
The key is to find the right way to present the information. More specific issues may then arise, such as determining the relevant market, the reason behind the acquisition, or the rationale for the transaction. However, most challenges relate to accessing information and clearly explaining how the transaction works, especially in its global dimension.

Latin Counsel: From your perspective, which sectors or industries present the greatest investment opportunities in Costa Rica and the region in the coming years?

Andrey Dorado: We have observed several very active industries, and everything indicates that this trend will continue in the coming years. The education sector, especially private institutions at all levels, from preschool to universities, has consolidated significantly. We are likely to see further changes of ownership in this area.
We have also noticed significant interest in renewable energy, both in projects already built and those in the Greenfield stage. We believe that interest in participating in the Costa Rican renewable energy market will continue to grow, with some companies seeking to enter and others choosing to exit.
The agro-industrial sector has always been extremely dynamic and remains a driving force throughout its value chain, being a very important sector for Costa Rica and for our countries in the region.
Likewise, we are seeing notable movement in data centers, either as operations in free trade zones or setting up in Costa Rica, and we feel that this trend will continue.
Finally, the international market and the tourism sector, especially the hotel industry, continue to generate opportunities. There is growing interest from companies seeking to enter the country, both to develop new projects and to acquire existing assets, reflecting sustained dynamism in the local market.

Latin Counsel: You have received numerous accolades from directories such as Chambers, The Legal 500, LACCA and Lexology. What do these awards mean to you and your practice? How do you think these rankings influence companies’ decision-making when choosing legal counsel?

Andrey Dorado: Receiving this type of recognition is always positive, as it reflects the work and commitment that goes into helping clients. Although they are awarded on an individual basis, it would not be possible to achieve this level of recognition without a strong team behind you.
Having trustworthy, dedicated, and committed people who are willing to go the extra mile and meet high standards of professionalism is essential. That is why these awards are, to a large extent, a collective achievement. Teamwork makes the practice grow and motivates everyone, as they participate in highly relevant projects and acquisitions recognized in the market, which encourages their professional development.
Legal directories conduct their research and are a valuable source of information. We have had numerous clients mention these rankings to us, and we have even seen contracts that stipulate that, in the event of a disagreement, the parties will turn to a firm recognized by one of these directories. Therefore, they represent a market quality standard and a search tool for potential clients.
It is important to be present in these rankings. We do not work solely to obtain them, that is not the objective, but they do constitute recognition of our practice and our efforts to seek professional excellence.

Latin Counsel: As a professional recognized by LACCA in Antitrust and Competition, what is your view on the evolution of antitrust regulation in the Central American region? What regional trends are shaping cross-border transactions in Central America?

Andrey Dorado: We have seen an improvement in the quality of competition authorities in Central America. Guatemala, for example, just passed its competition law this year; previously, there was no specific law, and now they are also reviewing mergers.
I believe that each of the commissions, both in Costa Rica and in other countries, is making an effort to raise the bar in terms of sophistication. They seek to better understand transactions and mergers by reviewing what more advanced authorities are doing, such as those in the European Union, Mexico, Chile, and Brazil. There is more communication, and they are better informed about what is happening regionally and even globally.
There is a noticeable effort on the part of the authorities to become more sophisticated and stay informed. Trends show that they now review more thoroughly, analyzing barriers to entry, market shares, and available substitute products or services. For example, in Panama, the law allows for voluntary notifications, but in the last 12 to 18 months, we have submitted between five and ten notifications, something that was less frequent before. The commission is examining these issues in greater detail and gaining a better understanding of how the market works.
There is definitely a trend toward greater communication and visibility of cross-border transactions, as well as an effort to achieve a deeper and more sophisticated level of analysis in each country.

Latin Counsel: What soft skills do you consider most important for success as a partner in a high-level law firm?

Andrey Dorado: I think that, nowadays, there is a lot of talk about soft skills, especially among the younger generations and in view of the challenges they face. It is not just about academic training, being a great lawyer, or being able to recite laws and case law. You need to know how to work in a team, trust the team, delegate tasks, and supervise them properly. It is also essential to understand the client’s expectations, both in terms of delivery times and the quality of the deliverable.
Therefore, a set of solid soft skills is required. In a context of partners or with clients, it may happen that position A is proposed, but option B is ultimately decided upon; handling these situations with flexibility is essential. The same is true in contracts and transactions: a rigid stance often makes it difficult to build an environment of trust with the team and other partners.
In short, it is essential to know how to work as a team, add value, and build trust. Meeting delivery commitments and maintaining effective internal communication with all involved are key aspects of success as a partner in a high-level law firm.

Latin Counsel: How has technology impacted the area of M&A and due diligence work in particular?

Andrey Dorado: Rather than talking about technology in general, I believe the focus should be on artificial intelligence, which will undoubtedly transform the area of M&A. According to various studies, it can be both an opportunity and a challenge for legal practice.
In particular, in due diligence, there is already software and programs that facilitate the review of a data room, which can be very large and contain hundreds or even thousands of documents. Artificial intelligence allows for considerable efficiency in the time invested. Today, clients expect technological tools to be used to streamline processes and for that efficiency to be reflected in costs as well.
Technology definitely has a significant impact on our field. While it must always be reviewed and supervised, it is a key tool for generating value for clients and improving efficiency, both in due diligence and in contract drafting. Technological tools, including artificial intelligence, will continue to impact and shape legal practice over the next five years.
I am convinced that the way corporate and M&A lawyers draft reports and contracts will change considerably, which will be beneficial for the industry in general.

Latin Counsel: What advice would you give to a young lawyer looking to specialize in M&A and competition law in Latin America?

Andrey Dorado: For a young lawyer who wants to specialize in M&A and competition law, it is important to understand that this is a practice area with ups and downs. When there is a heavy transactional load, significant sacrifices in time and energy are required, as the days can be long. It is a real rush, and you have to devote a lot of time and pay close attention to detail, whether in due diligence reports, drafting contracts, calls with clients, explaining issues, or advising on the percentage of risk in a given matter.
Sitting at a negotiating table and reaching an agreement, conceding on some points and defending others, requires understanding three things: first, hard work; second, teamwork; and third, soft skills, especially in negotiation. Litigating a contract, which generally involves not conceding on any point, is not the same as negotiating with a greater goal in mind: getting the deal done.
In the field of competition law, particularly in Costa Rica, there are many opportunities. Combining management with this area of practice often generates an intense workload, but when done correctly, it builds trust with clients and earns professional recognition. Both areas are truly fascinating and offer very enriching professional development.

Latin Counsel: In your experience, what role do local legal advisors play in international transactions and how can they add value compared to large global firms?

Andrey Dorado: Many transactions are international in the sense that a foreign company acquires another international company that has a subsidiary in one of our countries, in this case Costa Rica. In these scenarios, our role is well defined: we do not lead the transaction. Sometimes, we do not even have a direct relationship with the clients, but only with the international firm, and that is perfectly established.
However, there are clear expectations on the part of the international firm in two main areas. First, the language of contracts and reports is usually standardized: how contingencies materialize, how they are quantified, among other details. Local advisors are expected to master this language and apply it correctly in both reports and contracts.
Second, response times are very short. Responses, reports, or complete deliverables are expected to be ready within 24 to 48 hours. This is because, in complex international transactions, firms deal with multiple jurisdictions and need to standardize their reports, contracts, and comments. Therefore, efficiency, specificity, and clarity are essential.
In summary, there is a clear standardization of our role vis-à-vis the international firm, and the key is to meet those standards efficiently and accurately.

Latin Counsel: From your perspective, how do you see the corporate legal market in Costa Rica evolving over the next five years?

Andrey Dorado: I think the corporate legal market in Costa Rica is very dynamic. There is a lot of talent and a large number of lawyers, some with more experience than me, others younger, and also colleagues of my own age and level of experience. In addition, many young lawyers are going abroad to do master’s degrees and then returning, which further enriches the market.
I believe there is a bright future for the next five years. However, much will depend on what we mentioned before: it is essential to work very hard, meet deadlines, and know how to work as a team. As long as corporate lawyers maintain that focus, developing soft skills and satisfying clients, the sector will continue to grow. Costa Rica has a very high level of professional talent. There is healthy and relevant competition, especially in the area of mergers and acquisitions, which drives continuous improvement in the practice.

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