Setting up a company in Mexico also implies complying with certain requirements apart from the registration ones. Among them, there is the condition to obtain a business license in Mexico. The issuance of a business permit is covered by our Mexican company formation experts in the lines below. We can also assist with the application procedure.
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The most important thing to consider about business permits in Mexico
The highlight of running a company in Mexico is that the country has 3 governmental levels: the federal, the state, and the municipal. This aspect will also affect the requirements for obtaining business licenses in Mexico.
| Quick Facts | |
|---|---|
| Definition |
Business permits and licenses are documents issued by the Mexican authorities to local or foreign companies operating on the local market. These documents are mandatory for lawful business activity (they vary based on the specific industry or region). |
|
Main types of business licenses and permits |
A company can obtain business licenses in Mexico at three levels – municipal, state and federal. |
|
Municipal level licensing |
It is necessary to obtain business licenses in Mexico issued at a municipal level if the company is incorporated in the respective municipality. The document is issued as an operating permit (necessary for industrial sites, commercial, company headquarters). |
| State level licensing | required for trading activities, signage authorization, environmental and labor-related matters |
| Federal level licensing |
It is required for most businesses, so that they can complete their tax registration obligations. The registration is done through the Single National Authority. |
| Requirements for obtaining licenses and permits |
– prepare the documentation required for the types of permits the business needs, – submit the paperwork with the responsible authorities, – pay processing fees, – allow state representatives to carry out inspections at the place of business |
| Ways to apply |
in person and online (the latter is available in certain states) |
| Institutions in charge |
It varies based on the industry the company activates in and the type of licensing. |
| Fees (yes/no) |
yes |
| Renewals | Upon expiry, license holders can renew their documentation. |
| Penalties for expired business licenses (yes/no) |
Yes |
| Types of penalties |
– fines, – criminal charges, – removal of the right to conduct a business activity, etc. |
| How long does it take to obtain licenses and permits? |
One can obtain business licenses in Mexico in minimum 1 week and maximum 12. |
| Is it possible to transfer a valid business license if a business expands to a new region? |
No. Expansion to a new region implies obtaining licenses in the specific municipality/state (however, entities registered at a federal level can maintain their registration while applying for local permits and licenses in the new place of business). |
| Are there any different licesing requirements for foreign companies compared to local businesses? |
No. Local and foreign companies must abide by the same requirements when applying for business permits and licenses. |
The first thing to consider when you start a business here is where to apply for the necessary business permit. You do not need to worry, as our company registration specialists in Mexico can advise you if you are a foreign investor and need assistance.
Municipal business permits in Mexico
After registering a company, the first type of Mexican business license you will need must be obtained from the municipal authority. It is known as the operating permit and is required in the following cases:
- when the headquarters of your company is located in the respective city;
- when you have an industrial site in that city;
- when you have a commercial site in the respective city (in this case, it can also be used as the equivalent of a trade license in other countries);
- building permits and zoning licenses are also issued by municipalities in Mexico.
For this purpose, you need to prepare various documents, in accordance with the municipality’s regulations. Our company formation experts in Mexico can assist with the application for an operating license in Mexico.
State business license in Mexico
The state authorities in Mexico are usually in charge of issuing the following types of business permits:
- local authorizations, which are usually used for trading activities, and are similar to trade licenses;
- signage authorization, which is released for the placement or installation of billboards;
- operational permits.
Our local company registration firm can help you assess the type of business license you need for your Mexican company.
Federal business licenses in Mexico
Most special activities are regulated by the federal government. It also created the national authorities in charge of issuing business licenses on the entire Mexican territory. Among the sectors in which special authorizations are required, we mention the following:
- construction, which falls under the supervision of the Urban Development and Housing Office;
- healthcare, which is handled by the Federal Commission for the Protection against Sanitary Risks;
- food and beverages, for which the permits are issued by the Ministry of Health;
- financial services, which are governed and licensed by the National Banking and Securities Commission in Mexico;
- tourism and hospitality, which fall under the supervision of the Ministry of Tourism.
Federal business permits require the most complex procedures. However, with the help of our company incorporation experts in Mexico, you can rest assured that you will comply with the requirements to get the necessary approvals.
Please know that those who want to obtain business licenses in Mexico at a federal level are required to register with the Registro Federal de Contribuyentes (RFC). The obligation is imposed to investors who will open a company in Mexico, but also to natural persons aged above 18 years old, who are involved in trading activities from which they obtain a taxable income.
We mention that the licensing process follows the same steps for both local and foreign legal entities. However, foreign investors who complete the process of company formation in Mexico must abide by a few additional legal requirements concerning:
- immigration;
- specific sectoral approval, for certain industries where the registration procedure of a foreign entity requires the authorization of other authorities besides the ones that are usually involved in the standard process for company incorporation in Mexico.
Below, you can read our infographic on licenses for businesses in Mexico:
How to apply for business permits in Mexico
Here are the steps to apply for any type of business license in Mexico:
- establish the type of permit you need;
- draft the licensing documentation;
- file the paperwork with the relevant authority;
- pay the licensing fee;
- undergo the necessary inspections, if applicable;
- collect your license.
Ways to obtain business licenses in Mexico
The manner in which applicants can obtain business licenses in Mexico depends on the level of registration. For instance, in the case of those who want to acquire a federal license, the application process is uniform at a national level, regardless of state where the procedure is initiated.
For individuals who apply for a state or municipal license, the application can vary in accordance with the laws and procedures of each municipality/state. In this sense, applicants can have the opportunity of online application in some regions, while in others, only in-person, paper-based applications can be available.
We recommend you get in touch with our team of specialists in company formation in Mexico for advice on this matter – we can present you the type of procedure applicable in any Mexican region that you are interested in.
Do Mexican authorities charge fees for the issuance of business licenses?
Yes, when obtaining business licenses in Mexico, investors will also need to pay processing fees. These can vary greatly on the sector of interest, the level of registration, the legal entity under which investors have completed the process of company incorporation in Mexico, the region, etc.
To these costs, investors must also add the costs associated with company formation in Mexico, renting an office space and other start-up costs, depending on their business plans and industry. This is why we recommend you address our accountants in Mexico, who can advise on any financial/tax related matter.
We advise investors to request professional assistance especially if they plan to expand in several Mexican regions or if they will invest in industries that have a more complex approval system. In the video below, investors are invited to watch a short presentation on the process of applying for business permits and licenses in Mexico:
Foreign investments in Mexico
If you are considering opening a company in Mexico, it may be useful to know that:
- between January the 1st and March the 15th 2024, 73 foreign investment announcements were made by the government;
- these investments are expected to generate 39,192 new jobs in the next 2 to 4 years;
- 57% of them come from the United States.
If you want to set up a business and need assistance in filing for a business license in Mexico, do not hesitate to contact us. We can also help you apply for state business permits that replace trade licenses in Mexico.