Our website uses  cookies for statistical purposes.

Our Articles

Open a Business in Mexico

Open a Business in Mexico

Opening a business in Mexico in 2022 as a foreign entrepreneur requires complete knowledge about the legislation and also about the business culture.

Most of the company requirements respect the international standards, but for a better understanding of how you can open a business in Mexico, we recommend you get in touch with our team of lawyers in Mexico.

 Quick Facts  
Types of companies which can be started by foreigners  

Corporations
Limited Liability Company
Mexican Investment Promotion Company

Minimum share capital

for LTD Company and paid in requirement (Yes/No)

Fifty thousand Mexican pesos
Yes

Minimum number of

shareholders for Limited Company 

 2
Time frame for the incorporation 

3-5 weeks

Corporate tax rate  30%
Dividend tax rate 

10% 

VAT Rate 

16%

No. of double taxation treaties (approx.) 59 tax treaties
Do you supply a Registered Address/Virtual Office?   Yes 
Local Director Required   Yes
Annual Meeting Required  Yes
Redomiciliation Permitted  Yes 
Electronic Signature  Electronic signatures are legally recognized in Mexico.
Is Accounting/Annual Return Required?  Yes 
Foreign-Ownership Allowed  Yes 
 Any tax exemption available? (offshore income, dividend income, etc.)  Income exempt 
 Any tax incentives (if applicable)  Yes

Establishing a business in Mexico

There are several types of companies available to foreign investors who wish to open a company in Mexico in 2022.

These are the Joint Stock Company (S.A.), the Limited Liability Company (S de R.L.) and the Stock Investment Promotion. In practice, most foreign investors will choose one of the first two business forms. They are suited for small and medium-companies (the limited liability company) as well as for large corporations (the joint-stock).

The costs for incorporation differ, however, there is no mandatory minimum prescribed capital.

We invite you to get in touch with our law firm in Mexico and find out complete information about how to open a business and the legal aspects involved.

We can also assist you if you are interested in the process to immigrate to Mexico for the purpose of starting a business. 

A step-by-step guide to opening a company in Mexico

Incorporating a company in a foreign country is not an easy task. It is advisable to take the assistance of our Mexican lawyers. They can provide you with comprehensive information on this matter. Please find below a step-by-step procedure for company registration in Mexico:

Step 1: Choosing the type of business to start is the first step. Once this has been determined, get permission from the Department of Trade to use the firm name. You can accomplish this online or through the notary public who drafted the company’s incorporation document. A maximum of five names may be entered at once. The authorities look at these in the order that they were submitted. Other names lower on the list will not be checked once one has been accepted. In most cases, this procedure should not take more than three days.

Step 2: To create the deed of incorporation, use a notary public or seek the assistance of one of our Mexican attorneys. The approved company name, the type of business, the anticipated business activity, the names, addresses, and ownership stakes are all listed in the deed of incorporation. The notary will need a description of the goals and pursuits of the upcoming firm in Spanish to prepare it.

Step 3: The incorporation deed must then be signed in the notary’s presence. The following are necessary for this:

  • the participation of each owner of the business named in the deed;
  • each owner’s identification documents, any official form of identification is adequate for Mexican citizens;
  • foreign nationals must present their passports as well as documentation of their authorized entry into the nation, such as a resident permit or visitor visa;
  • proof of each owner’s address, typically in the form of a recent (within three months) utility bill.

Within a few days of the signing, the notary will return at least one certified copy of the deed of incorporation without the owner’s signature, allowing the remaining steps of business formation to be completed.

Step 4: Obtain the company’s registered address. Typically, this will either be the location where the business will be located or a different address that was obtained from a third-party provider (for example when the business will effectively be run from home).

Step 5: Register the business with the Mexican Tax Authorities for tax purposes (SAT). You can also get in touch with our Mexican lawyers for tax registration purposes. The following paperwork is needed to register with SAT:

  • certified copy of the incorporation document;
  • proof of the business’s registered address (usually a utility bill not more than three months old);
  • documentation proving the identity of the registered agent with the proper authority.

It is also important to inform the local administration (delegación) of the opening of the business if it involves a store or other public activity. Note that specific permits can be needed for certain businesses. You can receive specialized assistance for opening a business and obtaining the necessary permits from our lawyers in Mexico.  

Step 6: Register the company with the National Worker’s Housing Fund and the Mexican Social Security Institute if it plans to employ people. This stage can wait till staff is hired if there won’t be any workers when the business is incorporated. However, it must be finished by the time the first person is hired. The IMSS office closest to the location of the business (delegación) is where registration is done. Depending on the activity of the firm, different regulations apply. The majority of subsequent contacts with IMSS/INFONAVIT, such as registering new personnel, are possible after the initial registration. When employing staff, it is wise to consult a specialist for the most recent information on the legislation.

Step 7: Register your company with the National Business Information Registry (SIEM). The Department of Trade is in charge of this registry. It is important to include the business’s address and goal. The cost of registration varies according to the number of employees.

These are the main steps involved in the incorporation of a business in Mexico. For any additional and updated information in this regard, you can get in touch with our specialists. The services of our attorneys in Mexico are at your disposal.

Key considerations for establishing a business in Mexico

Many foreigners plan to open a business in Mexico due to the low labor costs and business-friendly ecosystem. So, here are some key considerations that individuals should keep in mind when they start a company in Mexico:

  • Find business opportunities: before initiating a business in a foreign country, an individual must identify chances of succeeding there. It is recommended not to enter a foreign market without any legal assistance. If you want to open a business in Mexico, you are welcomed to get in touch with our local lawyers. They will also help you in the procedure of obtaining business licenses in Mexico.
  • Business form: you must select the type of company that suits your business needs. Please remember that the tax burden and other corporate requirements may vary depending upon the kind of company you pick;
  • Expert move: if you want to excel in your business, it is necessary to identify and define the main economic activity of your legal entity, which is also a requirement set by Mexican authorities;
  • Legal representative: once you start a company in Mexico, you must hire a legal representative. Our Mexican attorneys can do this job for you; they will help you with legal documents to carry out business transactions with clients and partners;
  • Corporate tax: when you open a business in Mexico or anywhere else in the world, you need to deal with the corporate tax obligations. However, it is hard to understand the tax regulations of foreign countries, so our lawyers in Mexico will provide you with legal backing in navigating your taxes in this country. In addition, their assistance will help you to maintain your good standing status with the local authorities. 

Besides the legal assistance in all the above matters, you can also rely on the legal services of our lawyers for the renewal of the commercial register before the Undersecretariat of Industry, employee payroll, commerce, competitiveness, and the management of accounting books, etc.

Finally, if you require any services regarding debt collection in Mexico, you can trust the services of our local lawyers.

We are also at your service if you are interested in immigration to Mexico.

How can I open a company in Mexico in 2022?

According to the Investment Law in Mexico, foreigners can set up limited liability companies, joint stock companies, can act as sole traders or can enter into partnerships.

The LLC or S.R.L. is the preferred business type in Mexico for residents and foreigners. In the case of foreign entrepreneurs, the company registration starts with the approvals of the Ministry of Foreign Affairs and the following matters:

  • the Articles of Association need to contain information about the owners, the activities, the minimum share capital, information about the legal representative;
  • the incorporation is made by the Registry of Foreign Investments in Mexico;
  • the application for tax purposes is the next step for registered companies in Mexico;
  • all the documents need to be translated in Spanish and notarized at the Public Notary.

Our team of attorneys in Mexico can help you register your business with respect to the requirements imposed by the authorities. We do encourage investors to reach out to us if they wish to start a business in 2022.

Obtaining updated information is important in all business fields. Also, in case you move to Mexico from US, our immigration lawyers in Mexico can offer support in various relocation matters.

Can I open a branch in Mexico?

Yes, large companies from abroad can establish and run branches in Mexico, also known as a sucursal.

The National Commission of Foreign Investment issue the approvals for branches in Mexico.

You can also direct your attention to subsidiary registration in Mexico which is subject to fewer formalities.

Taxes in Mexico

In Mexico, corporate income tax (C.I.T.) applies to all resident taxpayers’ income from worldwide resources and foreign residents.

30% is the federal corporate income tax rate, and all corporate entities are subject to the tax rules applicable to Mexican corporations. Non-profit organizations are assessed as non-taxpayers.

In Mexico, taxpayers who are involved in activities like forestry, fishing, agriculture, and livestock are subject to a specific tax treatment that may reduce their tax obligations.

Real estate acquisitions are subject to taxation at the municipal or state level; property taxes and payroll taxes are also imposed at the municipal or state level. In contrast, other taxes are imposed at the federal level.

For 2020, the maximum income tax rate for a Mexican resident is 35%. 

If you face any difficulties regarding compliance with the Mexican tax obligations, you can get legal advice from our lawyers. The experienced lawyers at our law firm in Mexico will help you understand different tax implications in this country.

They will also assist you to open a business through immigration in Mexico. Furthermore, if you need the services of a certified public accountant (C.P.A.), you can get in touch with our law firm. 

Advantages of opening a company in Mexico

If you want to open a business in Mexico, you can get the legal services of our lawyers. They can guide you in detail about the benefits of incorporating a company in this country. No matter how large or small the firm is, starting a business in Mexico has many advantages, for instance:

  • Limited Liability Companies can be founded by foreign nationals;
  • Complete foreign ownership is allowed;
  • The return of profits is not subject to any limitations;
  • Legal protection for property rights;
  • There are no imposed paid-in capital requirements.

If you are seeking any additional information about the advantages of Mexican businesses, you can get updated information from our attorneys. 

Besides this information, our attorneys can also help you in your citizenship application, if you want to be a Mexican citizen.

Foreign direct investment (FDI) in Mexico

Mexico is the world’s ninth-largest FDI recipient, and it is one of the emerging countries that are open to foreign direct investment.

Due to the friendly business atmosphere, foreigners trust the country and invest in different sectors of Mexico.

Please find below the FDI percentage made by various countries in Mexico in 2020:

  • In Mexico, the total stock of foreign direct investment was estimated at USD 597 billion in 2020;
  • The United States invested 39.1% as a top investing country in Mexico’s investment sectors; 
  • Germany invested 3.5%, which is also a significant investor; 
  • Canada made an investment of 14.5% in the investment sectors of Mexico;
  • Japan, as another leading investing country, invested 4.2% in this country.

Contact our law firm in Mexico if you want to invest in this country. They will legally guide you to each step that is necessary to open a business.

Feel free to address ourimmigration lawyers in Mexico for guidance in moving here and residency.