Opening a business in Mexico in 2023 as a foreign entrepreneur requires complete knowledge of the legislation and also about the business culture.
Most of the company requirements respect 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.
|Types of companies which can be started by foreigners||
Minimum share capital
for LTD Company and paid in requirement (Yes/No)
Fifty thousand Mexican pesos
Minimum number of
shareholders for Limited Company
|Time frame for the incorporation||
|Corporate tax rate||30%|
|Dividend tax rate||
|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|
|Electronic Signature||Electronic signatures are legally recognized in Mexico.|
|Is Accounting/Annual Return Required?||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 2023.
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 to start a business. Before immigration to Mexico as an investor, you can get in touch with our lawyers. They can guide you about the benefits of investing in the real estate industry of Mexico. For instance; you may potentially be eligible for a residence permit if your real estate acquisition costs more than USD 340,000 in this country. A residency permit may be obtained for 170,000 USD if you establish a corporation and purchase real estate via it.
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, and 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 welcome 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 on 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 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 2023?
According to the Investment Law in Mexico, foreigners can set up limited liability companies, and joint stock companies can act as sole traders or can enter into partnerships. Alternatively, buying a shelf company is also a fast way to start a business in Mexico. To learn about which company structure is well suited for you, please get a consultation from our experienced lawyers. With their legal assistance, you can incorporate a company without unnecessary delays.
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 into Spanish and notarized by the Public Notary.
Handwritten signatures are required in Mexico’s legal system. Many operations to establish a company in Mexico necessitate the physical presence of a legal representative. Our team of attorneys in Mexico can help you register your business concerning the requirements imposed by the authorities. We do encourage investors to reach out to us if they wish to start a business in 2023.
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 income earned by non-residents for the calendar year 2023, if the income is above 125,900 MXN, then the applicable income tax rate is 15%. If the income is above 1,000,000 MXN, then the applicable tax rate will be 30%. In a foreign state like Mexico, you are recommended to have a good grasp of tax rates. Because in case of any non-compliance, you can face penalties.
If you face any difficulties regarding compliance with 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.
What is the employer of record (EOR) in Mexico?
In 2023, if you are planning to expand your business operations in Mexico as a foreigner, then the employer of record is hope for you. An employer of record (EOR) in Mexico is a company that takes responsibility for all the legal and administrative requirements related to employment in Mexico. This includes handling payroll, benefits, taxes, compliance with labor laws, and other administrative tasks related to hiring and managing employees. An EOR allows companies to outsource their human resources functions, thereby reducing their administrative burden and allowing them to focus on their core business activities. An EOR can also be useful for companies that are expanding into Mexico or setting up operations there, as it can help them navigate the complex regulatory environment and comply with local laws. If you need any help understanding the regulations of opening a business in Mexico, you can get in touch with our lawyers. The seasoned lawyers at our law firm in Mexico will not only offer you detailed guidance in this regard but also practically assist you with incorporation.
You should also know that, to engage an EOR in Mexico, a company typically signs a contract with the EOR that outlines the terms of the relationship, including the services provided, the fees charged, and the responsibilities of both parties. The EOR then becomes the legal employer of the company’s workers in Mexico, while the company retains operational control over its work.
It is important to note that working with an EOR in Mexico does not absolve a company of its legal obligations as an employer. The company is still responsible for providing a safe working environment, complying with labor laws, and maintaining good relationships with its employees. The EOR is simply there to help with the administrative and legal aspects of employment.
If you have more questions about the cost of starting a business in Mexico, you are welcome to get in touch with our lawyers. They will also guide you on how you can start a business in Mexico as a foreigner in 2023.
Furthermore, if you are interested to apply for citizenship in Mexico, get help from our Mexican immigration lawyers.
Businesses you cannot operate as a foreigner in Mexico in 2023
Starting a business in Mexico as a foreigner comes with certain restrictions. Mexico has a relatively open economy and welcomes foreign investment in most sectors. However, some economic activities are restricted to foreigners in Mexico, particularly those related to national security, public health, and cultural heritage.
Here are some examples of economic activities that are restricted to foreigners in Mexico:
- Oil and Gas Industry: The Mexican Constitution reserves the exploration, production, and distribution of oil and gas to the Mexican state, and foreign investment in this sector is restricted.
- Basic Telecommunications: Foreign investment is limited to 49% in companies that provide basic telecommunications services in Mexico, such as landline and mobile phone services.
- Transportation: Foreign investment is limited to 49% in companies that provide certain transportation services in Mexico, such as air transportation and maritime transport for commercial purposes.
- Radio and Television Broadcasting: Foreign investment is limited to 49% in companies that provide radio and television broadcasting services in Mexico.
- Real Estate: Foreigners are restricted from owning real estate within the restricted zone, which is an area within 100 km of Mexico’s borders and 50 km of its coastlines.
Please note that foreign investors can still participate in these economic activities through joint ventures or by setting up Mexican subsidiaries that comply with Mexican ownership requirements. Additionally, Mexico has signed several international trade agreements that grant foreign investors certain protections and guarantees. If you are starting a business in Mexico in 2023, and are interested to learn about its international trade agreements, the services of our lawyers are at your disposal. They can guide you in detail on how you can start a business in Mexico in 2023.
If you are interested to relocate to Mexico, get in touch with our Mexican immigration lawyers.
The cost of starting a business in Mexico
The cost of starting a business in Mexico can vary depending on several factors, including the type of business, the location, and the size of the company. However, there are some common expenses that any new business in Mexico can expect to incur.
Here are some of the typical costs of starting a business in Mexico:
- Incorporation fees: The cost of incorporating a business in Mexico will depend on the type of legal entity chosen, such as a corporation (Sociedad Anónima) or a limited liability company (Sociedad de Responsabilidad Limitada). The incorporation fees can be expected USD 2,100 plus 16% IVA tax;
- Registration fees: In addition to the incorporation fees, there may be registration fees required to register the business with the Mexican government. These fees can vary depending on the type of business and the location, but they generally range from USD 50 to USD 150;
- Rent and utilities: Rent and utilities are major expenses for any business. Rent for commercial space can range from approximately USD 500 to USD 1,500 per month or more;
- Licenses and permits: Depending on the type of business, there may be additional licenses and permits required to operate legally in Mexico. Their fee can range from approximately USD 50 to USD 250.
Overall, the cost of starting a business in Mexico can range from USD 1,000 to USD 5,000 or more, depending on the factors mentioned above. It is necessary to consult with a lawyer and an accountant before opening a business in Mexico. You are also welcome to get in touch with our attorneys in Mexico. With their assistance, you can open a company in Mexico as a foreigner in 2023 without much hassle.
Besides this, the services of our lawyers are also at your disposal if you want to apply for a residence permit in Mexico.
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 on 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 with your citizenship application, if you want to be a Mexican citizen. Several laws, notably Article 30 of the Mexican Constitution and various statutes, govern citizenship in Mexico. The rights afforded to Mexicans with dual citizenship by Mexican law are outlined in Article 32 of the Constitution. Our lawyers can lay forth guidelines to assist prevent disagreements that might happen when someone has dual citizenship. If you are planning to apply for citizenship in Mexico, our lawyers can guide you about the possibility of having dual citizenship based on the rules of your country of origin.
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, 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 our immigration lawyers in Mexico for guidance in moving here and residency. Depending on the length of stay and the reason for the migration, anyone planning to live in Mexico for more than six months needs both a resident card and a resident visa. A Mexican permanent resident card is required for foreign nationals who wish to live permanently in Mexico. Since it may be obtained after moving to Mexico with a retirement visa, the permanent resident card for Mexico is a popular choice among retirees. So, if you want to know the procedure for the application for a residence permit in Mexico, get in touch with our lawyers.