How to Set Up a Company in Mexico

English · Español · 简体中文

Mexico is a key manufacturing platform for the North American market, and many Asian companies are moving production there. Most sectors are open to 100% foreign ownership, but the incorporation involves several authorities and some formalities that foreign investors often underestimate.

1. Choose the vehicle

• Sociedad Anónima de Capital Variable (S.A. de C.V.): the classic corporation, with shares and a variable capital that can be increased without amending the bylaws.
• Sociedad de Responsabilidad Limitada (S. de R.L. de C.V.): often chosen by US-linked groups for tax classification reasons.
• S.A.P.I.: a corporation with more flexible shareholder agreements, popular for joint ventures and private equity.

These companies generally need at least two shareholders.

2. Main steps

1. Name authorisation from the Ministry of Economy.
2. Deed of incorporation before a notary or commercial public broker, including the bylaws and the foreigners’ clause. Foreign shareholders can sign through apostilled powers of attorney translated into Spanish.
3. Registration in the Public Registry of Commerce.
4. Tax ID (RFC) and electronic signature (e.firma) with the tax authority (SAT), needed to issue electronic invoices (CFDI) and open a bank account.
5. National Foreign Investment Registry: registration within the legal deadline after incorporation, followed by periodic reports.

3. Points to watch

• Restricted sectors: a few activities are reserved to the State or to Mexican nationals, or capped for foreign investors; check them before planning.
• Tax ID for shareholders and the legal representative: the SAT may require identification and registration of foreign shareholders and an appointed legal representative with a Mexican tax ID.
• Manufacturing: for export manufacturing, consider the IMMEX programme and VAT certification to avoid cash flow costs on temporary imports.
• Tax: corporate income tax is 30%, VAT is 16% as a general rule, and employees are entitled to a 10% share of taxable profits (PTU).

4. After incorporation

The company must keep electronic accounts, file monthly and annual tax returns, issue CFDI invoices, hold annual shareholders’ meetings, keep its share and beneficial owner records, file foreign investment reports and register with social security (IMSS) before hiring.

The views expressed are personal and do not necessarily represent the position of NET CRAMAN. This article is for general information only and does not constitute legal or tax advice. Rules change over time; seek specific advice before acting.