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How to set up a company in Mexico

Mexico offers attractive investment opportunities and a foreign investment law that allows for full foreign ownership. As in any other jurisdiction, foreign investors are required to follow the different rules and regulations for opening a business and complying with the ongoing laws.

Our article includes the most important steps needed to open a new business and the regulations for company taxation and reporting in Mexico.

Foreign investors who need help setting up a company in Mexico can get in touch with one of our local company registration agents.

Doing business in Mexico

Mexico has an open economy and it is one of the top traders with the United States. The country has taken steps to encourage foreign investments and there are no general restrictions or limitations on foreign ownership. Investments are allowed in almost all business fields, except for some sectors where there is a limitation on participation, such as activities performed exclusively by the State, broadcasting or domestic passenger transportation. It is possible to open a company in Mexico in broadcasting, for example however foreign ownership will be limited to 49%.

Mexico has a special “maquiladora” regime that encourages foreign investments from the United States. The maquiladora companies are owned by U.S. corporations and the products manufactured by the maquiladora are imported into the United States at preferential export tariffs. The foreign U.S. company (which becomes the shelter company for the maquiladora) provides for the machinery and the equipment needed for its Mexican factory, obtains the necessary permits, hires the employees and takes care of the tax liabilities for the maquiladora. Among some of the top advantages of outsourcing factories in Mexico, we can include reduced labor costs, skilled employees, and other logistical advantages. This regime is accessible to many American manufacturing companies, including small to medium-sized firms. However, first-time investors who are not accustomed to the Mexican laws and the maquiladora regime are advised to seek professional help for establishing this type of factory in the country. One of our Mexico company registration agents can give you more information on the maquiladora regime.

Mexico company formation

The process of forming a company in Mexico includes a few steps and the requirements for incorporation may differ according to the chosen type of company

Two of the most common business types in Mexico are the limited liability stock corporation with variable capital and the limited liability corporation without stock. 

The first step is to obtain permission to use the chosen company name. This is done with the Ministry of Economy and there are requirements to submit at least three alternative names. The Articles of Association and the Memorandum of the company are to be drafted according to the Commercial Companies Law and the Securities Market Law. The incorporation deed is executed before a public faith officer. 

The documents, including information about the company’s shareholders, are submitted to the Public Registry of Commerce. The company must also obtain a tax identification number and register with other relevant Mexican authorities, such as the Foreign Investment Registry. 

One of our Mexico company formation agents can help you during all or any of these particular company incorporation steps. We can provide you with detailed information on the requirements for companies and the laws for investment.

Contact us if you need assistance for setting up a company in Mexico.