A holding company in Mexico is a business without any activities, which, instead, owns assets. These can be shares in other companies, units in limited partnerships, private equity funds, publicly traded stocks, bonds, property, patents, trademarks, copyrights or any other asset that has value. In this article, our Mexico company formation consultants explain different aspects related to holding companies in Mexico.
Description of holding companies in Mexico
In Mexico, there can be two types of holding companies:
• Local holding companies;
• Non-resident intermediate holding companies.
A local holding company is generally utilized when the buyer intends to effectuate an asset deal. For a share deal, though, the changes which were introduced in the 2014 Mexican tax reform decreased the ability to pushdown debt to the local holding company. Our company formation advisors in Mexico can provide more details related to this matter. We can also help you open such a company in Mexico.
As for non-resident intermediate holding companies in Mexico, in case the foreign country taxes the capital gains and dividends derived from abroad, such business vehicle could be utilized to defer this taxation and maybe profit from a more advantageous tax treaty with Mexico.
The buyer, however, must know that a lot of local tax treaties imply treaty-shopping provisions which could restrict the possibility of structuring a deal for the sole purpose of obtaining tax benefits.
Disclosure requirements for holding companies of Mexican financial institutions
Under the Financial Group Law in Mexico, shareholders who buy 2% or more of the capital stock of a holding company of a financial institution in this country must notify the Secretariat of Finance and Public Credit (SHCP).
This notice has to be in Spanish and it must contain information such as:
• The legal name of the shares beneficial owner;
• The legal representative of the beneficiary;
• The address for the SHCP to send correspondence;
• Other information: our Mexico company registration agents can offer more details on what this other information consists of.
If you have more questions about the benefits of holding companies in Mexico, or for assistance in setting up a company in Mexico, we kindly invite you to contact us.