April 28 (Reuters) - Latin American e-commerce giant

MercadoLibre's ( MELI ) board called on its shareholders on

Monday to approve a redomestication of its U.S. operations from

Delaware to Texas, in a filing ahead of a June 17 shareholders

meeting.

WHY IT'S IMPORTANT

Among Latin America's largest companies, the e-commerce

giant is considered the region's answer to Amazon ( AMZN ) and

is also spear-heading a digital drive with expansions in online

financial services.

Delaware was until recently the undisputed home of U.S.

corporations thanks to its friendly legislation, though few

companies have operations there.

However, a trickle of firms have left Delaware for Texas -

notably Elon Musk's Tesla after a local judge ruled

against a proposed pay package. Musk has urged other companies

to follow suit.

KEY QUOTES

"The Board considered that while more developed, Delaware

law can be indeterminate because of its use of broad, flexible

standards that are applied to individual cases in a highly fact

specific way," MercadoLibre ( MELI ) said in the filing.

"This focus on precise facts and circumstances means

Delaware decisions may be less predictable for an innovative

company like MercadoLibre ( MELI )."

It added that a recently enacted rule for codifying business

judgments in Texas should "provide greater certainty to the

board in its decision-making."

CONTEXT

The vote will require the approval of a majority of

shareholders. If the vote does not pass, MercadoLibre ( MELI ) said its

domicile will remain unchanged. It also noted it could face

legal challenges from stockholders among others.

Analysts have said the move could benefit MercadoLibre ( MELI ) and

mark an added challenge to Asian e-commerce players such as

Shein and Temu, whose are subject to a Mexican tariff on

products imported through its courier services.