Expanding your business to international markets can be a strategic move for growth and diversification. Mexico’s vibrant economy and proximity to the United States presents an attractive opportunity for US citizens looking to establish a business presence. The process in Mexico is quite different than forming a company in the USA where formations can often be completed online.
If you’re thinking of forming a legal entity in Mexico, here are 5 things to know to ensure that we can provide an accurate fee estimate.
WHAT: Before diving into the formalities of establishing a company in Mexico, it’s crucial to determine the most suitable business structure. The two most common types of entities in Mexico are a Sociedad Anónima (SA) and a Sociedad de Responsabilidad Limitada (SRL). Each has its own set of advantages and legal implications. SAs are akin to publicly traded companies, while SRLs are limited liability companies. It’s a good idea to consult with your attorney/accountant in the USA first. IBCF works with cross border attorneys in Mexico who can also help you make the right decision on the type of entity.
The second “WHAT” is what business activities will the company conduct? As is the case in the USA, some business activities are regulated in Mexico and require special licenses or permits.
WHEN: What is the projected timeline for getting your entity registered? It can take at least 6 weeks to complete the registration and obtain a tax ID.
WHERE: In what city will your company be located? Mexico requires companies to have a physical office address, which serves as the official business location and must be valid for legal and tax purposes. Some businesses opt to use virtual office providers allowing businesses to comply with the local address requirement without the need for an immediate physical presence.
WHO: Who will run the business in Mexico? Will the company hire employees? Mexico mandates that foreign companies have a resident local representative who is either a Mexican citizen or has Mexican legal residency. The local representative has legal responsibility for the company. IBCF does not provide nominee managers or local representatives.
HOW: In Mexico, formations are not form driven, but rather notarial deeds or escrituras publicas drafted by a Mexican notary. Unlike USA notaries, a Mexican public notary is a specialized lawyer who has completed post graduate studies. Once you have determined the “who, what, when and where”, including selecting three names of choice, our local attorney will prepare draft deeds and documentation for review.
One last thing! Once your entity is ready to operate, IBCF is here to help with ongoing compliance required to keep your entity compliant with Mexican laws.
Please contact us to learn more or to speak with a customer service representative!