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- Key Milestones for Getting Started
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How to Start a Business in Mexico
The approach to incorporating a business in Mexico varies widely depending on the business case and strategic goals. For manufacturers, factors such as tax strategy and time-to-market play a crucial role in shaping the market entry and incorporation plan.
Mexico Business Registration
To register a company in Mexico, you first need to choose a business structure and verify the availability of your desired company name with the Ministry of Economy. Next, a notary public must draft the incorporation deed, which includes the company’s bylaws, shareholders, and objectives, followed by registering the deed with the Public Registry of Commerce. Finally, the company must obtain a tax ID (RFC) from the Tax Administration Service (SAT) and complete any additional registrations or permits depending on the business activity and location.
Corporate Laws in Mexico
Mexican corporate law are primarily governed by the General Law of Mercantile Societies. This legal framework is based on civil law principles and establishes the rights and obligations of shareholders, directors and officers within corporations operating in Mexico. There are two main types of corporations in Mexico: (1) sociedades anónimas (SAs) which are similar to U.S. corporations, and (2) sociedades de responsabilidad limitada (SRLs) which are similar to LLC’s in the U.S.
Doing Business as a Foreigner
Foreign investors can own 100% of a Mexican corporation, although certain industries may have restrictions on foreign ownership. Foreigners from applicable countries that wish to visit Mexico may enter on a Tourist Visa that is good for 180 days. This visa allows you to enjoy tourism or business meetings, for example. You cannot work in Mexico with a Tourist Visa. A Temporary Resident permit will need to be issued.
Corporate Taxes in Mexico
Corporate taxes in Mexico include a flat income tax rate of 30% on taxable profits for resident companies. Additionally, companies may be subject to a Value Added Tax (VAT) of 16% on most goods and services, as well as withholding taxes on payments like dividends, royalties, and interest to foreign entities. Businesses must also comply with annual reporting obligations, including financial statements and tax returns, to avoid penalties.
Mexico Border Zone Incentives
Mexico’s Northern and Southern borders receive a benefit that consists of a tax credit equivalent to 50% of VAT, thus an 8% tax. The taxpayer must reside in said regions. These regions also enjoy an Income Tax credit, allowing these companies to be subject to only 2/3 of the tax caused by the income carried out from activity in these regions.
Import / Export in Mexico
Mexico's strategic location and free trade agreements, including USMCA, make it a global hub for importing and exporting goods. Businesses engaged in trade must register with Mexico’s Importers Registry and comply with customs regulations, tariffs, and documentation requirements to ensure smooth cross-border operations.
Maquiladora Program
The Maquiladora Program in Mexico, now called IMMEX, allows foreign companies to import raw materials and components duty-free for manufacturing and subsequent export. This program supports cost-efficient production while providing tax incentives, making Mexico a key player in global supply chains. Many maquiladoras en Mexico are run by operational partners, called shelter service providers.
Mexico Free Trade Zone
In 2019, Mexico's Free Trade Zone came into effect for 43 municipalities through 6 states along Mexico's northern border. Components of the program include:
- Encourage economic growth in the area
- Reduction of VAT & Income Tax rates
- Promote the well-being of the population
- Improvements in fuel competition
- Establishment of tax incentives for fuel
Start a Business in Mexico
The approach to incorporating a business in Mexico varies widely depending on the business case and strategic goals. For manufacturers, factors such as tax strategy and time-to-market play a crucial role in shaping the market entry and incorporation plan.
Mexico Business Registration
To register a company in Mexico, you first need to choose a business structure and verify the availability of your desired company name with the Ministry of Economy. Next, a notary public must draft the incorporation deed, which includes the company’s bylaws, shareholders, and objectives, followed by registering the deed with the Public Registry of Commerce. Finally, the company must obtain a tax ID (RFC) from the Tax Administration Service (SAT) and complete any additional registrations or permits depending on the business activity and location.
Corporate Laws in Mexico
Mexican corporate law are primarily governed by the General Law of Mercantile Societies. This legal framework is based on civil law principles and establishes the rights and obligations of shareholders, directors and officers within corporations operating in Mexico. The notary public office in Mexico holds a lot of weight and responsibility. Many legal acts must be conducted in front of them.
There are two main types of corporations in Mexico: (1) sociedades anónimas (SAs) which are similar to U.S. corporations, and (2) sociedades de responsabilidad limitada (SRLs) which are similar to LLC’s in the U.S.
Doing Business as a Foreigner
Foreign investors can own 100% of a Mexican corporation, although certain industries may have restrictions on foreign ownership. Foreigners from applicable countries that wish to visit Mexico may enter on a Tourist Visa that is good for 180 days. This visa allows you to enjoy tourism or business meetings, for example. You cannot work in Mexico with a Tourist Visa. A Temporary Resident permit will need to be issued.
Download the Doing Business in Mexico e-book for common regulatory organisms and their equivalent in the United States.
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