{"id":108,"date":"2022-09-21T08:11:11","date_gmt":"2022-09-21T08:11:11","guid":{"rendered":"https:\/\/companyformationmexico.com\/?p=108"},"modified":"2024-04-18T16:29:52","modified_gmt":"2024-04-18T16:29:52","slug":"types-of-companies-in-mexico","status":"publish","type":"post","link":"https:\/\/companyformationmexico.com\/types-of-companies-in-mexico\/","title":{"rendered":"Types of Companies in Mexico"},"content":{"rendered":"\n

Investors in Mexico<\/strong> can choose among several different business forms<\/strong>, according to the size of the company, the plans to expand it, the number of founders and the available paid-up capital.<\/p>\n\n\n\n

The general requirements for company incorporation<\/strong> may vary according to the chosen type of company<\/strong>. Our<\/strong> Mexico company formation agents<\/strong><\/a> can help you choose the most suitable business type<\/strong>, according to your business needs.<\/p>\n\n\n\n

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 Quick Facts<\/th>\n <\/th>\n<\/tr>\n<\/thead>\n
 Types of legal entities in Mexico <\/td>\nThere are many types of companies in Mexico, such as: the limited liability company, the stock company, the general\/limited partnership, the sole trader, maquiladoras (factories operating under a special tax regime), the branch office\/subsidiary, the representative office, etc.  <\/td>\n<\/tr>\n
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 The characteristics of the LLC <\/p>\n<\/td>\n

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 The LLC refers to the limited liability company (Sociedad de Responsabilidad Limitada), which has the following characteristics:<\/p>\n

– it is suitable for small and medium-sized companies;<\/p>\n

– it can be incorporated by minimum 2 shareholders;<\/p>\n

– the shareholders have limited liability against corporate debts, limited to their investment;<\/p>\n

– it allows 100% foreign ownership;<\/p>\n

– the company’s shares can’t be publicly traded;<\/p>\n

– it can have up to 50 shareholders. <\/p>\n<\/td>\n<\/tr>\n

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The characteristics of the stock company  <\/p>\n<\/td>\n

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 A stock company needs a minimum of 2 shareholders, who acquire ownership by purchasing shares in the company.<\/p>\n

The shares can be sold and the investors benefit from limited liability.<\/p>\n

The company requires a capital of MXN 50,000 and it is ideally suited for large companies.  <\/p>\n<\/td>\n<\/tr>\n

 The characteristics of the partnership <\/td>\n\n

 Partnerships in Mexico are established by signing a partnership agreement.<\/p>\n

They need 2 founders, who are referred to as partners.<\/p>\n

There isn’t any capital requirement for a partnership and the founders bear personal responsibility for the debts of the company.  <\/p>\n<\/td>\n<\/tr>\n

 The characteristics of the sole trader <\/td>\n\n

 The sole trader is known as Persona Fisica con Actividad Empresarial.<\/p>\n

The company can be set up by 1 founder who is a natural person.<\/p>\n

The entity is taxed following the rules for personal taxation, while the founder is fully liable for company debts. <\/p>\n<\/td>\n<\/tr>\n

 The characteristics of the branch <\/td>\n\n

A branch is a subdivision of a parent company which is registered for tax purposes in Mexico.<\/p>\n

It can develop the same business activities of the parent company and it must pay taxes in Mexico for the income generated in Mexico.  <\/p>\n<\/td>\n<\/tr>\n

 Legislation regulating company incorporation in Mexico <\/td>\n\n

 All types of companies in Mexico are governed by the Mexican General Law for Commercial Companies. <\/p>\n<\/td>\n<\/tr>\n

 Corporate taxes <\/td>\n\n

 – corporate tax 30%;<\/p>\n

– VAT 16%, 8% and 0%;<\/p>\n

– excise tax – varying from 3% to 160% depending on the goods imported in the country;<\/p>\n

– payroll tax paid by the employer 3%;<\/p>\n

– social security contribution paid by the employer 2%.  <\/p>\n<\/td>\n<\/tr>\n

 Foreign ownership rules  <\/td>\n\n

Foreign investors can set up companies with 100% foreign owernship, with the exception of few economic sectors.  <\/p>\n<\/td>\n<\/tr>\n

 Double tax treaties signed by Mexico  <\/td>\n 60<\/td>\n<\/tr>\n
 Main company registration steps  <\/td>\n\n

 For all company types in Mexico, the following steps are necessary:<\/p>\n

– select a suitable trading name;<\/p>\n

– prepare the company’s founding document;<\/p>\n

– subscribe the minimum share capital, where required;<\/p>\n

– open a bank account at a local commercial bank;<\/p>\n

– have a registered address;<\/p>\n

– appoint directors\/board of directors\/administrators;<\/p>\n

– register for taxation.<\/p>\n<\/td>\n<\/tr>\n

 Corporate tax number required (yes\/no)  <\/td>\n\n

 Yes<\/p>\n<\/td>\n<\/tr>\n

 Resident director\/shareholder requirements<\/td>\n\n

 No<\/p>\n<\/td>\n<\/tr>\n

 Can investors modify the legal entity of a Mexican company?  <\/td>\n\n

 Yes, it is possible to change a legal entity into another, if necessary. <\/p>\n<\/td>\n<\/tr>\n

 Ways in which our team can assist investors  <\/td>\n\n

 Our consultants can help you select a suitable legal entity, register it with local authorities, obtain certificates, permits, licenses.<\/p>\n

They can also assist in any business immigration matter as well as in post-incorporation formalities. <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n

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