Are you looking to register your company in Mexico However, you aren’t sure how to begin? Here, we will show you the steps necessary to establish a company in Mexico.
1. Select the appropriate type of business in Mexico
If you decide to establish the business in Mexico there are numerous advantages, no matter how big or small the company may be:
Foreigners may create 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.
When deciding on the most suitable Mexican firm type it is important to consider the amount of shareholders (minimum two shareholders is required) and the flexibility that is desired when managing the business, as well as the level of formality needed. In Mexico the two primary types of companies used in business are:
Stock Corporation (Sociedad Anonima, S.A.) The stock corporation is utilized 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.
For large-scale operations or a company that has multiple investors, we suggest the S.A. For a small company like the restaurant, shop or manufacturing company with a smaller scale it is possible to select an S. de R.L. Both these options, S.A. and the S. de R.L. the possibility for the variable 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’ve decided on the type of business you would like 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) in which five potential company names must be listed in the order you prefer for the business. This is done to ensure that there isn’t any firm already registered in Mexico or elsewhere using the same name.
3. The Articles of Incorporation
After 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. This document forms the basis of all the fundamental and general aspects of the business, it outlines:
Information about the founders of the company
Type of company
Company name
The mission of the business
Capital authorized
Bylaws
When the company is established and the Articles of Incorporation are signed, they need to be notarized by the Notary Public or Public broker. Prior to the process is completed it is recommended that the Notary Public will ask for “Know your Client” (KYC) conditions that require completing the questionnaire, supplying proof of legality as well as powers of attorneys (POA) issued by shareholders, if applicable.
Note: In Mexico a stock corporation requires:
An sole administrator (also referred to as”the legal representative”) also known as a board.
Auditor sworn in as a Statutory Auditors (known by the name of Comisario on Spanish).
Registered office address to facilitate tax-related purposes.
The shareholders are able to elect one administrator, a sole administrator, or the board of directors to oversee the operations of the stock company. The bylaws and charter will outline the responsibilities and powers of the board or administrator and any specific actions that may require a resolution from shareholders. Sometimes, a sole administrator is preferable during the initial stages of a company, and the business elects the board of directors in the future.
4. Find the Tax ID (RFC) from the Mexican tax authority
The next step to complete your incorporation in Mexico is to get the tax ID of your company also commonly referred to as the “Registro Federal of Contribuyentes” (RFC) and in Spanish. In order to complete this process you must visit the offices of the “Servicio de Administracion TRIbutaria” (SAT) (SAT), which is the Mexican tax administration.
5. Register the business in the Mexican Public Registry (RPPC)
Then, you must create a company in it is registered with the Public Registry of Property and Commerce (Registro Publico of Propiedad and Commerce, RPPC in Spanish). To complete this procedure, you will need to submit:
The payment of registration fees
These notarized documents are the Articles of Incorporation.
RFC from the firm.
Power of Attorney that allows the legal representative to execute the procedures of the company (if appropriate).
After your company has been registered with RPPC It is now officially established!
6. Make an appointment at The Mexican Social Security agency (IMSS)
The next step is to incorporate the company with the Mexican Social Security agency (Instituto Mexicano del Seguro Social, IMSS in Spanish). Even if it’s an organization in which the partners work as the sole employees and you are not able to register the company, you need to visit the IMSS to apply for registration. This will allow you to pay the personal contributions of new employees to the business or the partners currently employed.
Consider that if this procedure is not completed before you start trading in Mexico 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 National de Inversiones Extranjeras, RNIE in Spanish). Additionally, companies that have extremely high capital levels, must file annual financial reports in the RNIE. RNIE.
Note: When considering a foreign-owned business, it is crucial to consider:
In Mexico regardless of status of an immigrant it is generally permitted to join the corporate charter as an employee of the company. However, there are certain areas where participation is not permitted or restricted so you will need be in close contact with local experts when you register a business in Mexico.
A International Power of Attorney (POA) can be written which allows an attorney or representative in your local area to take action on behalf of you and without the need the expense of traveling to Mexico. When the corporate charter of your new business is ready to be signed by the attorney, the attorney will need an POA in order to execute the pertinent documents. The POA has to be legalized to be legally acknowledged and accepted in Mexico. To be legally recognized the POA must first be certified (certified) from the appropriate authorities. After the POA has been authenticated then it is then time signing on behalf of shareholders.
Consider that any document you receive from outside must be legalized or apostilled and translated officially into Spanish after arriving in Mexico (if the case).
8. Join the other necessary government organizations
Based on the nature of your Mexican firm, you might be required to join various organisations. The most frequent 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 also involves requesting permits from the state or municipal authorities that are required, based on the geographic area in the area you want to establish yourself.
9. Create a corporate bank account
In the final step, you can create a bank account for your company. The authorized representative of your business will be able to complete this process and the bank will need the company’s RFC as well as your company’s information. Choose a local institution which offers the most competitive pricing structure for international transactions, as well as other processes that you think are important. It’s recommended that you contact an expert in your area who is well-versed in the process.
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