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Open a Joint Stock Company in Mexico

Open a Joint Stock Company in Mexico

One of the ways to conclude the process of company formation in Mexico is by setting up a joint stock company. The joint stock company in Mexico is a relatively new company type that was set up by the Mexican authorities.

The joint stock company was included in the General Corporation Law in 2015, after the amendments brought by the Mexican Congress. The joint stock company is known as Sociedad por Acciones Simplificada (SAS), which stands for simplified joint stock company.

Our consultants can provide step-to-step assistance if you want to open a company in Mexico under this legal entity.

What are the characteristics of a SAS in Mexico?

The simplified joint stock company in Mexico was created with the purpose of establishing a better business environment for local and foreign investors, in the sense that the registration process is a more straightforward one.

For instance, it is important to know that this company type can be registered through an online application. Certain steps that are formally associated with the process of company incorporation in Mexico do not apply in this case.

An important modification brought to the registration procedure is that the company can be incorporated without the need to address to a public notary for the certification of all the documents that must, in general, be certified in front of a notary public.

Some of the characteristics of the Mexican SAS are presented in the list below:

  • this company type can be incorporated in Mexico starting with 15 September 2016;
  • the SAS brings a novelty regarding the number of shareholders – if for a regular joint stock company the requirement is of minimum 2, for the SAS, only 1 investor is required;
  • the process of company formation in Mexico can be completed in 1 day;
  • the company is required to have an annual income of maximum MXN 5 million to maintain the status of a SAS;
  • if the company has an income above MXN 5 million per year, then it is mandatory to change the legal entity into a standard joint stock company.

Of course, the investors will have to verify the tax implications and the accounting regulations that can be different from one entity to another. For this, our accountants in Mexico remain at your service.

As mentioned above, the company doesn’t need to be registered through a public notary. However, this does not mean that there aren’t any procedures to be followed instead of the notary proceedings.

Therefore, one must know that instead of addressing to a notary public, the company registration in Mexico will be concluded through the Public Registry of Commerce.

Our consultants in company formation in Mexico can advise on the documentation you must prepare when addressing to this institution. Of course, our team can provide legal representation throughout the entire registration process, through the power of attorney.

What are the obligations for employment registration in Mexico?

Please mind that if you will hire employees, you will have the same obligations as the ones applicable to any other company types. According to the Mexican Government, all companies will have to register with the Mexican Institute of Social Security (IMSS).

The registration obligations will slightly vary depending on the company type and here, there are 2 types of situations – 1) registering an employee when the business is an individual company (a sole trader) and 2) registering the employee when the business is a legal entity, with legal personality.

For a Mexican SAS, the 2nd scenario will apply. Please mind that if you will hire an employee, you will need to notify the IMSS in a period of 5 days since the employment began. Our CPA in Mexico can present more details on the procedure.

Please contact our team if you need more information on how to set up a company in Mexico as a simplified joint stock company or a regular joint stock company.