{"id":94,"date":"2022-09-20T13:46:50","date_gmt":"2022-09-20T13:46:50","guid":{"rendered":"https:\/\/companyformationmexico.com\/?page_id=94"},"modified":"2023-11-29T09:13:18","modified_gmt":"2023-11-29T09:13:18","slug":"homepage","status":"publish","type":"page","link":"https:\/\/companyformationmexico.com\/","title":{"rendered":"How to set up a company in Mexico"},"content":{"rendered":"\n

Foreign investors who need help in setting up a company in Mexico<\/strong> can get in touch with one of our local company registration agents<\/strong><\/a>. Our team of incorporation agents in Mexico <\/strong>can handle the entire process of company formation and can also provide clients with other business related services such as: assistance for obtaining business permits and licenses, virtual offices services, shelf companies. <\/p>\n\n\n\n

For those who are seeking an attractive business destination located in another country than their own, Mexico <\/strong>can become a suitable market. With various investment opportunities<\/strong><\/a> and a national law open to foreign investments, foreign businessmen can benefit from the right of having full ownership on the company they will register<\/strong> here. Just like in other countries, foreign businessmen will need to follow certain rules when opening a company in Mexico<\/strong>, as well as to comply with various laws. Our article includes the most important steps needed to open a new business and the regulations for company taxation and reporting in Mexico<\/strong>. <\/p>\n\n\n\n

Doing business in Mexico<\/strong><\/h2>\n\n\n\n


Mexico <\/strong>is a country with a liberal economy and some of its main trading relations are established with the United States of America (USA). The country has taken steps to encourage foreign investments and there are no general restrictions or limitations on foreign ownership. Investments are allowed in almost all business fields, except for some sectors where there is a limitation on participation, such as activities performed exclusively by the State, broadcasting or domestic passenger transportation. It is possible to open a company in Mexico<\/strong><\/a>in broadcasting for example; however, foreign ownership will be limited to 49%.<\/p>\n\n\n\n\n\t\n\t\t\n\t\t\t\n\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\t\t\t\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
 Quick Facts<\/th>\n\t\t\t <\/th>\n\t\t<\/tr>\n\t<\/thead>\n\t
  Types of companies<\/td>\n\t\t\t\n\t\t\t

Sociedad An\u00f3nima (S.A.) –
\n\t\t\tJoint Stock Corporation <\/p>\n\n\t\t\t

Sociedad de Responsabilidad Limitada
\n\t\t\t(S. de R.L.) – Limited Liability Company <\/p>\n\n\t\t\t

Sociedad en Nombre Colectivo (SNC)  – General Partnership <\/p>\n\n\t\t\t

Sociedad en Comandita Simple (SCS) – Limited Partnership <\/p>\n\n\t\t\t

Branch Office\/ Representative Office <\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t

\n\t\t\t

Minimum share capital<\/p>\n\n\t\t\t

for LTD Company <\/p>\n\t\t\t<\/td>\n\t\t\t

MXN 3,000<\/td>\n\t\t<\/tr>\n\t\t
\n\t\t\t

Minimum number of<\/p>\n\n\t\t\t

shareholders for Limited Company <\/p>\n\t\t\t<\/td>\n\t\t\t

 2<\/td>\n\t\t<\/tr>\n\t\t
Time frame for the incorporation <\/td>\n\t\t\t\n\t\t\t

minimum 4 weeks, maximum 8 weeks<\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t

Corporate tax rate<\/td>\n\t\t\t30% <\/td>\n\t\t<\/tr>\n\t\t
Dividend tax rate <\/td>\n\t\t\t\n\t\t\t

10% <\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t

VAT Rate <\/td>\n\t\t\t\n\t\t\t

 <\/p>\n\n\t\t\t

The standard VAT is of 16%; reduced rates are available, at 8% and 0%.   <\/p>\n\t\t\t<\/td>\n\t\t<\/tr>\n\t\t

Number of double taxation treaties<\/td>\n\t\t\t60 <\/td>\n\t\t<\/tr>\n\t\t
Do you supply a Registered Address\/Virtual Office?  <\/td>\n\t\t\tYes <\/td>\n\t\t<\/tr>\n\t\t
Local Director Required  <\/td>\n\t\t\tNo, but there can appear certain limitations. <\/td>\n\t\t<\/tr>\n\t\t
Annual Meeting Required <\/td>\n\t\t\tYes<\/td>\n\t\t<\/tr>\n\t\t
Electronic Signature <\/td>\n\t\t\tYes <\/td>\n\t\t<\/tr>\n\t\t
Is Accounting\/Annual Return Required? <\/td>\n\t\t\tAccounting and annual tax returns are both required. <\/td>\n\t\t<\/tr>\n\t\t
Foreign-Ownership Allowed <\/td>\n\t\t\tYes, but restrictions can appear in certain sectors.<\/td>\n\t\t<\/tr>\n\t\t
 Any tax exemptions available? <\/td>\n\t\t\tYes – foreign tax credit relief, VAT and import duty exemptions for Maquiladora regime companies, exemption on the withholding tax applicable to permanent establishments and local companies. <\/td>\n\t\t<\/tr>\n\t\t
 Any tax incentives <\/td>\n\t\t\tYes – investments in R&D, employment incentives, incentives for theatre and movie industries, real estate incentives. <\/td>\n\t\t<\/tr>\n
 Corporate bank account requirements  <\/td>\n\n

– documents attesting the company registration in Mexico,<\/p>\n

– documents regarding the person appointed as a representative,<\/p>\n

– the company’s tax identification number,<\/p>\n

– documents attesting the address of the company in Mexico,<\/p>\n

– other documents can be required depending on the bank of choice.<\/p>\n<\/td>\n<\/tr>\n

\n

 Documents for company registration  <\/p>\n<\/td>\n

\n

 Investors interested in how to set up a company in Mexico must prepare the following documents: <\/p>\n

– the incorporation documents, signed (the articles of association),<\/p>\n

– the certificate attesting the company’s trading name,<\/p>\n

– the company’s tax identification number – Registro Federal de Contribuyentes (RFC),<\/p>\n

– documents attesting the setup of the bank account issued in the name of the company,<\/p>\n

– documents that attest the company’s registration with all the competent institutions. <\/p>\n<\/td>\n<\/tr>\n

\n

 Visa requirements for businessmen <\/p>\n<\/td>\n

\n

 Foreign nationals can arrive in Mexico without applying for a business visa if they stay in this country for maximum 180 days (differences can appear based on the nationality, with regards to immigration formalities and documents to complete).<\/p>\n

Those who will stay longer than 180 days must apply for a Temporary Resident Visa. <\/p>\n<\/td>\n<\/tr>\n

 Foreign investment programs available in Mexico <\/td>\n\n

One of the investment programs available here is the Maquiladoras, created in partnership with the United States, the country’s main investor.<\/p>\n

The maquiladoras refer to manufacturing units located in Mexico, but set up by American investors, who have their administration in the US. <\/p>\n

The advantage of the program is that the US company can sent to Mexico various goods (supplies, machinery, equipment) without paying import duties.   <\/p>\n<\/td>\n<\/tr>\n

 Institution in charge with the registration <\/td>\n\n

– the Ministry of Foreign Relations – Secretaría de Relaciones Exteriores,<\/p>\n

– the Public Registry of Property and Commerce – Registro Público de la Propiedad y Comercio.  <\/p>\n<\/td>\n<\/tr>\n

 Tax identification number for businesses <\/td>\n\n

 Companies must apply for a tax identification number, known as Registro Federal de Contribuyentes.<\/p>\n

The tax number contains 12 digit alphanumeric code, unique for each legal entity, and it is used for all its tax formalities.  <\/p>\n<\/td>\n<\/tr>\n

 Institution in charge with the tax registration procedures <\/td>\n\n

 The Tax Administration Service – Servicio de Administración Tributaria. <\/p>\n<\/td>\n<\/tr>\n

 Possibility to hire foreign workforce (yes\/no)  <\/td>\n\n

 Yes<\/p>\n<\/td>\n<\/tr>\n

 Obligation to be present for the incorporation formalities (yes\/no)  <\/td>\n\n

 No <\/p>\n<\/td>\n<\/tr>\n

 Duration of the corporate bank account setup  <\/td>\nMinimum 6 weeks.   <\/td>\n<\/tr>\n
 Minimum salary in Mexico  <\/td>\n\n

 MXN $207,44 (in 2023). <\/p>\n<\/td>\n<\/tr>\n

 How to obtain legal representation  <\/td>\n\n

The law on how to set up a company in Mexico grants the right to legal representation, which implies that the investors do not have to be present during the registration formalities, through the power of attorney.  <\/p>\n<\/td>\n<\/tr>\n

 Institution in charge with immigration formalities  <\/td>\n\n

 The National Institute of Migration. <\/p>\n<\/td>\n<\/tr>\n

 Purchasing a shelf company (yes\/no)  <\/td>\n\n

 Yes<\/p>\n<\/td>\n<\/tr>\n

 Minimum requirements for appointing directors  <\/td>\n\n

 The basic requirements on how to set up a company in Mexico impose certain conditions for the directors of the legal entity.<\/p>\n

These are: <\/p>\n

– have an age of minimum 18 years old,<\/p>\n

– have a clean criminal record,<\/p>\n

– are not bankrupt, are not brokers.   <\/p>\n<\/td>\n<\/tr>\n\t<\/tbody>\n<\/table>\n\n\n\n

What is the maquiladora regime in Mexico?<\/strong>
<\/h2>\n\n\n\n

Mexico <\/strong>applies a regime named \u201cmaquiladora\u201d, which is established with the purpose of attracting investments<\/strong><\/a> on the local market from investors residing in the United States of America. The maquiladora companies are owned by U.S. corporations and the products manufactured by the maquiladora are imported into the United States in preferential export conditions. <\/p>\n\n\n\n

The foreign U.S. company (which becomes the shelter company for the maquiladora) provides for the machinery and the equipment needed for its Mexican factory,<\/strong> obtains the necessary permits, hires the employees and it is also in charge with the maquiladora tax aspects<\/strong><\/a> (tax liabilities included). Among some of the top advantages of outsourcing factories in Mexico<\/strong>, we can include reduced labor costs, skilled employees, and other logistical advantages. <\/p>\n\n\n\n

This regime is accessible to many American manufacturing companies<\/strong><\/a>, including small to medium-sized firms. However, first-time investors who are not accustomed to the Mexican laws <\/strong>and the maquiladora regime are advised to seek professional help for establishing this type of factory in the country. One of our Mexico company registration agents<\/strong> can give you more information on the maquiladora regime.<\/p>\n\n\n\n

Maquiladora represents a regime which has been maintained since the 1960s between Mexico <\/strong>and the United States of America (USA); maquiladoras in Mexico <\/strong>can generally be found at the Mexican-American border<\/strong> and they are factories which assemble various products for the purpose of being exported<\/strong><\/a> to the USA. <\/p>\n\n\n\n

Those who are interested in this type of business endeavor have to know that maquiladoras can manufacture multiple types of goods, from clothing to car parts and consumer electronics. The program aims at hiring the Mexican workforce<\/a><\/strong>, which is available and plentiful, and for the American part, it provides considerable tax advantages not only in employment terms (American workforce is much more costly compared to the Mexican<\/strong> one), but also in special tariff regimes created for US investors. <\/p>\n\n\n\n

Back in the 1960s, the program was created with the purpose of reducing the high unemployment rate that was registered in Mexico<\/strong>, but at that moment, tariffs were still applicable, a regime which was continued up until 1990s. Tariffs were ended under the North American Free Trade Agreement, which had a great impact on the number of maquiladoras, as more and more American investors opted to start the process of company formation in Mexico<\/strong><\/a>. <\/p>\n\n\n\n

What are the main company types in Mexico?<\/strong><\/h2>\n\n\n\n

Foreign investors can open a company in Mexico<\/strong> as one of the legal entities prescribed by the national legislation. If you are not sure which is the most suitable company type for your business, we invite you to request in-depth advice from our team of consultants in company registration in Mexico<\/strong>. Below, we will present the main legal entiti<\/strong>es in Mexico<\/strong><\/a>:<\/p>\n\n\n\n