MercadoLibre Inc., Latin America’s most valuable company, is asking shareholders to approve a plan to move its domicile to Texas from Delaware amid a wave of firms reconsidering the long-standing corporate haven after a public spat between a judge and Elon Musk.
The planned “redomestication” is among items MercadoLibre shareholders are scheduled to vote on during its annual meeting on June 17, according to a filing earlier this month.
MercadoLibre, an e-commerce and fintech juggernaut with $21 billion of revenue last year, operates in Latin America with a sole fulfillment center in Texas opened last year to mostly send goods into Mexico. While its headquarters are in Montevideo, Uruguay, Delaware has been its legal address and place of incorporation since 1999.
“This potential change is intended to unify our presence in the US, following the opening of our first distribution center in Texas,” a MercadoLibre spokesperson said in a statement. “This change will not have any impact on our operations or growth plans.”
Musk, the world’s richest man, had a public spat with Delaware and its corporate laws after a judge shot down his massive Tesla Inc. pay package. That spurred a decision for him to move his companies to Texas and Nevada.
MercadoLibre co-founder and Chief Executive Officer Marcos Galperin has expressed admiration for Musk, calling himself “a super fan” of the billionaire in an October interview with newspaper La Nacion. An Argentine citizen, Galperin is supportive of President Javier Milei who is pushing for less oversight and more personal freedom for individuals and less red tape for companies.
Galperin, 53, has seen his net worth jump 23% this year to $9.8 billion, according to the Bloomberg Billionaires Index.
‘Less Predictable’
MercadoLibre said in the filing that it had no operations in Delaware and that the state was chosen solely because of its legal framework, “which we no longer believe is best suited for the company’s needs.”
Moving to Texas would allow the company to save on franchise tax fees — which amounted to $250,000 in the most recent period — while allowing “greater flexibility for strategic corporate actions,” according to the filing. Delaware law, while more developed, “can be indeterminate” and “may be less predictable for an innovative company like MercadoLibre.”
After an X account called Leave Delaware posted April 18 about MercadoLibre’s planned move, Musk commented, “at this point, any lawyer recommending incorporation in Delaware is committing malpractice.”
The Leave Delaware movement has a website that says it’s “dedicated to shining a light on what we perceive as corruption, bias and overreach within the Delaware Court of Chancery.” Its X account has 88,500 followers.
A spokesperson for the Delaware governor’s office — which has been handling responses on this issue — didn’t immediately respond to a request for comment.
Meta Platforms Inc. is considering multiple states for a possible reincorporation, Bloomberg News reported earlier this year. Dropbox Inc. is moving its legal home to Nevada, according to a filing with the US Securities and Exchange Commission, while Bill Ackman said Feb. 1 on X that his Pershing Square hedge fund firm was also reincorporating its management company in Nevada.
MercadoLibre, which has traded publicly since 2007 and has a market value of more than $110 billion, plans to hire another 28,000 people this year throughout Latin America and invest more than $13 billion. Its shares have climbed 29% this year.
This story was originally featured on Fortune.com
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