How to Set Up a Company in Mexico?

You’re looking to establish your company in Mexico However, you aren’t sure what to do? This article we will show you the steps necessary to start a business in Mexico.

1. Select the appropriate type of business in Mexico

If you decide to establish the business in Mexico There are a variety of advantages, regardless of how big or small the business is

Foreigners are able to set up an Limited Liability Company

100% foreign ownership

No capital controls to prevent repatriation of profits

Protection of property rights with strong property rights

There are no mandatory capital requirements for paid-in capital.

In deciding the best Mexican firm type it is important to consider the amount of shareholders (minimum 2 shareholders are required) and the flexibility that is desired when managing the business, as well as the level of formality that is required. In Mexico the two main types of companies used in business are:

Stock Corporation (Sociedad Anonima, S.A.) Stock Corporation is the most used by foreign and domestic investors

Limited Liability Company (Sociedad de Responsabilidad Limitada, S. de R.L.) – Used often

Both provide limited liability for shareholders, with liability only limited to their capital investment.

If you are operating a large-scale business or a company that has multiple investors, we suggest the S.A. For a small company like the restaurant, shop or a small-scale manufacturing facility You can select an S. de R.L. Both these options, S.A. and the S. de R.L. the possibility for flexible capital (capital variable CV, in Spanish) is possible to establish which allows the growth or decrease in capital with the least formalities.

2. Request the company’s address from the Ministry of Foreign Relations (SRE)

After you have decided on the type of business you wish to establish in Mexico the second step would be to make an application for incorporation to the Ministry of Foreign Relations (Secretaria de Relaciones Exteriores or SRE which is Spanish) where the five potential company names must be listed in the order you prefer for the company. This process is done to make sure that there isn’t a firm already registered within the country or overseas that has the same name as your company.

3. The Articles of Incorporation

When the SRE approves or releases the company’s proposed names the Articles of Incorporation (also called corporate charter) should be written. In this process it is recommended that you seek legal advice from an attorney in Mexico will be required. The document serves as the base of all the fundamental and general aspects of the company. they state:

Information on the founders of the company

Type of company

Company name

The goal of the business

Capital authorized

Bylaws

After the company has been established and the Articles of Incorporation are signed, they need to be notarized by an Notary Public or Public broker. Prior to the process is completed you must go through the Notary Public will ask for “Know your Client” (KYC) conditions that require completing an online questionnaire, providing evidence of legal status as well as the power of attorneys (POA) issued by shareholders, if applicable.

Note: In Mexico a stock corporation requires:

The sole administrator (also called”the legal representative”) (also known as the board of directors).

Auditor sworn in as a Statutory Auditors (known by the name of Comisario or Comisario in Spanish).

Registered office address to be used for tax purposes.

The shareholders are able to elect an administrator who is sole or the board of directors to oversee the business of the stock company. The bylaws and charter will define the responsibilities and powers of the board or administrator and any specific acts that could require a resolution from shareholders. The sole administrator may be preferable during the initial stages of a business. the business elects an executive board later.

4. Find an Tax ID (RFC) from the Mexican tax authority

The next step in the process of how to create a company in Mexico is to get the tax ID of your company also commonly referred to as the “Registro Federal of Contribuyentes” (RFC) which is in Spanish. In order to complete this process you’ll need to visit the office of “Servicio de Administracion TRIbutaria” (SAT) (SAT), which is the Mexican tax authority.

5. Register the business in the Mexican Public Registry (RPPC)

Then, you must create a company in you can apply for registration at the Public Registry of Property and Commerce (Registro Publico of Propiedad and Comercio or RPPC in Spanish). In order to do this, you need to submit:

The payment of registration fees

Notarized articles of Incorporation.

RFC from the firm.

Power of Attorney that allows the legal representative to implement the business’s procedures (if necessary).

After your company has been recognized by RPPC It is now officially established!

6. Sign up at your Mexican Social Security agency (IMSS)

You must now incorporate the company with the Mexican Social Security agency (Instituto Mexicano del Seguro Social, IMSS in Spanish). If it’s an entity in which the partners work as the sole employees then you have to go to the IMSS to apply for registration. You will then be able to pay the personal contributions for the new employees to the business or the partners currently employed.

Consider that if this process is not completed by the deadline then you could face a penalty from the IMSS.

7. Sign up to the Mexican Registry of Foreign Investment (RNIE)

Mexican law stipulates that businesses that have foreign participation are required to register on the register in the National Registry of Foreign Investments (Registro Nacional de Inversiones Externas, RNIE in Spanish). Additionally, companies that have large capital must file annual financial reports in the RNIE. RNIE.

Note: When considering a foreign-owned business, it is essential to consider:

In Mexico regardless of the status of an immigrant You are usually able to join the corporate charter as an employee of the company. There are some activities in which participation is not permitted or restricted and, as such, you need collaborate with the local professionals you trust when you register a business in Mexico.

A International Power of Attorney (POA) can be written which allows the local attorney or representative to represent you and without the need go to Mexico. Once the corporate charter for your new business is ready to be signed by the attorney, the attorney will need an POA for signature on the relevant documents. The POA must be legally endorsed to be legally recognised and accepted by Mexico. To be legally recognized the POA has to be verified (certified) through the appropriate authorities. After the POA has been authenticated following step to make the signature on behalf of shareholders.

Consider that any document issued from outside must be legalized or apostilled and then officially translated into Spanish at the time of entry into Mexico (if appropriate).

8. Register along with the other government organizations

The business of your Mexican firm, you might be required to sign up with various organisations. Most commonly, they are:

The Mexican Institute of Intellectual Property

The Ministry of Health Ministry of Health

The Ministry of Ecology and Environment. Ministry of Ecology and Environment

This is also the time to apply for permits from either the state or municipal government that are required, based on the geographic area in the area you want to establish yourself.

9. Make sure that the corporate bank account is open.

In the final step, you are able to create a bank account for your company. The authorized representative of your business is able to do this and the bank will need the company’s RFC along with your company’s details. Choose a local institution which offers the most competitive rates for international transactions as well as other procedures you believe are crucial. It’s recommended that you contact a local expert who has experience in the process.