Doing business in Mexico is a popular choice among American and European investors seeking to enter Latin America, thanks to competitive operating costs and easy access to major markets. As such, many foreign investors choose to register a company in Mexico, which can be a relatively quick and straightforward process with expert help.
Mexico is the second-largest economy in Latin America by gross domestic product (GDP), and is one of the four “MINT” nations identified for having very strong growth potential and good returns for investors, along with Indonesia, Nigeria, and Turkey. In 2019, the North American country reached a GDP of $1.27 trillion, while rising prosperity saw gross national income (GNI) hit $9,430 per capita that same year (all figures in USD).
Mexico is a regional trade hub, demonstrated by the fact it is the 17th-largest exporter globally, with major export products including vehicles, computers and electronics, petroleum oil, and fresh produce. While approximately three-quarters of those goods are destined for the United States, other key recipients include Canada, China, Germany, and Japan.
If you are looking to register a company in Mexico to take advantage of the opportunities available in this growing market, read on to understand some of the considerations you need to make, as well as the company formation process. Or go ahead and contact us now to discuss your business options.
Register a company in Mexico: what you should consider
When planning to register a company in Mexico, you will need to take some of the following aspects into consideration:
Legal representation: By law, all legally established companies must have a legal representative in Mexico, who can sign important documents on your behalf and represent your company before governmental entities. Take into account that this person must have a local tax ID, and therefore must either be a foreigner with a resident permit in Mexico or a Mexican national.
Entity type: One of the first things an experienced legal representative will be able to help you with is deciding the best entity type for your business, based on the liabilities you wish to accept, as well as the intended structure and funding of the company. The most common entity types used by foreign investors are a Limited Liability Company (S. de R.L.) and a stock company (S.A.), while you may also wish to register a subsidiary or form a branch in Mexico.
Economic activity: In order to remain compliant with corporate regulations, you will need to properly declare your main economic activities and sources of revenue. Your legal representative will be able to help you define them in accordance with local norms.
Tax requirements: Depending on the type of activity you are engaged in and the type of entity you are establishing, your liabilities and tax requirements will differ, while there may be some tax planning opportunities available that you are not aware of. As such, you will likely want to seek out the advice of a tax advisor in advance of the company formation, in order to make sure you are fully informed and have your tax strategy in place.
Register a company in Mexico in 6 steps
The following 6 steps must be completed in order to register a company in Mexico:
1. Draft and sign a power of attorney (POA):
Your legal representative must be granted the right to operate on your behalf via a POA, which they will be able to draw up in the event they are a corporate lawyer.
2. Create the company’s bylaws:
The company bylaws include the business purpose and how it will function, and this document must be legalized before a notary public.
3. Register your company in Mexico before local authorities:
You must register your company with the Public Registry of Property and Commerce, pointing out the real estate that makes up your business, and its commercial purposes, objectives, and goals.
4. Obtain the company and tax ID number:
With the aforementioned steps completed, you can request and obtain your taxpayer identification number from the Tax Administration Service (SAT).
5. Open and activate a corporate bank account:
Based on the nature and location of your business, your legal representative will be able to advise you if there is an ideal provider of your corporate bank account.
6. Make your initial investment:
With all of the paperwork and administration complete and your bank account opened, you are ready to complete the business registration process by making your initial investment.
Biz Latin Hub can help you with company formation in Mexico
At Biz Latin Hub, our team of multilingual company formation professionals has extensive experience helping foreign investors to register a company in Mexico. With our full portfolio of market-entry and back-office solutions, including legal, accounting, recruitment, and tax advisory services, we can be your single point of contact to support your operations in Mexico, or any of the other 15 countries in Latin America and the Caribbean where we are present.
Reach out to us now to find out how our services can be tailored to your business needs.
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