Business Structures and Registering a Business in Mexico

Find details on the most common types of business entities and the steps required to set up a business in Mexico...

The most common types of business entities that can be formed in Mexico are:

Sociedad Anonimo (S.A.) (similar to a public limited company or corporation). An S.A. can either have fixed or variable capital. If the latter, the company becomes a Sociedade Anónima de Capital Variable, or S.A. de C.V. (public limited company or corporation). Minimum capital is always fixed by law, although it is not necessary for the minimum capital to be paid up at incorporation.

Sociedad de Responsabilidad Limitadada (S. de R.L.) (limited liability company): This can have either fixed or variable capital, although the name is the same in either case.

Sole Trader: An individual with a business activity who uses their own name for business and tax purposes. The sole trader registers with the tax authorities as a Persona Física con actividad empresarial.

Sociedad Civil (S.C.): This type of business is mainly used by people who provide professional services, for example accountants and consultants, who do not deal in any form of tangible goods.

Asociación Civil (A.C.) (non-profit association): This is normally used for non-profit-making organizations, for example charities, clubs and business and trade associations.

With the exception of sole traders, all businesses must have a minimum of two shareholders/owners (socios), of which at least one must be appointed as the Administrador, or Consejo de Administración if there are more than one. The Administrador or Consejo de Administración is legally responsible for the company.

Steps required to set up a business in Mexico

The first step is to decide which type of company is to be formed. Once this has been decided the following steps are required to set up a business (with the exception of a sole trader):

Choose a company name

Obtain authorization from the Department for Trade (Secretaria de Economia) for the company name to be used. This can either be done online or via the notary public (notário publico) chosen to draw up the company´s deed of incorporation (acta constitutiva). Up to five names can be submitted at a time. These are examined in order of submission by the authorities. Once a name has been accepted other names further down the list will not be checked. This process should take no longer than three days in normal circumstances.

Draw up the Deed of Incorporation

Choose a notary public to draw up the deed of incorporation. Note that the notary can also be chosen at the beginning of the start-up process to obtain authorization for the company name. The deed of incorporation includes the company’s approved name, type of business, the intended activity of the business, and the names, addresses and shareholdings of the owners.

In order to do this the notary will require a description (in Spanish) of the purpose and activities of the company to be formed. It is common practice to make the possible activities of the company very broad so as to allow changes of business activity in future without the need to vary the deed of incorporation or start a new company. The notary will have standard text for this.

Signing the Deed of Incorporation

The next step is to sign the deed of incorporation in the presence of the notary. For this the following are required:

  • The presence of all owners (socios) of the company mentioned in the deed (the deed will also specify the shareholdings of each owner)
  • Identification documents of each owner. For Mexican citizens any form of official ID is sufficient (for example passport, Elector´s Card (IFE), Cédula Profesional). For foreigners their passports and proof of legal presence in the country, for example a residence permit or tourist visa are required
  • Proof of address (comprobante de domicilio) of each of the owners (usually a utility bill not more than three months old)

The notary will return at least one (how many varies from notary to notary) certified copy of the deed of incorporation without the owner´s signature within a few days of signing, so that the remaining stages of business formation can be carried out. When all remaining stages have been carried out the notary will deliver at least one certified copy of the deed signed by the owners. The original remains with the notary, who registers the business with the local public registry of businesses. In Mexico City this is the Registro Público del Comercio del DF.

Register the business address

Obtain a registered address (domicilio fiscal) for the company. This will normally either be the premises the business will operate from, or may be an address contracted from a third party provider (for example when the business will effectively be run from home).

Registration for tax purposes

Register the company for tax purposes with the Mexican Tax Authorities (SAT). This can be done at any local office of SAT.

In other states the local offices of SAT will need to be contacted. This registration can only be done by someone with power of attorney (poderes), designated in the deed of incorporation.

In order to register with SAT the following documents are required:

  • Certified copy of the deed of incorporation
  • Proof of registered address of the business (usually a utility bill not more than three months old)
  • Identification documents of the duly authorized person carrying out the registration. For Mexican Nationals any form of official ID is sufficient, for example passport, Elector´s Card (IFE), Cédula Profesional. For foreigners their passports and residence cards or tourist visas are required

Businesses open to the public

If the business involves a shop or activity open to the public, it is also necessary to notify the local government (delegación) of the opening of the business. In Mexico City this can be done online (in Spanish). The response may be a simple authorization; alternatively more information, and possibly a personal appearance, may be required.

Note that for some types of business separate permits may be required. It is recommended that legal advice be sought whenever a business serving the public directly is being opened.

Registering employees

If the business is to hire employees, register the business with the Mexican Social Security Institute (IMSS) and the National Worker´s Housing Fund (INFONAVIT)

If there will be no employees at the time the business is incorporated this stage can wait until employees are contracted. It must however, have been completed by the time the first employee is contracted.

Registration takes place with the local IMSS office in the jurisdiction (delegación) where the business is situated.

  • Find a list of IMSS offices. Select Instalaciones Administrativas and choose the state where the business is to be located (so for Mexico City choose Distrito Federal).

Information on documentation required is available (in Spanish) on the same website. The requirements vary depending on the activities of the business. Once initial registration has taken place most other interactions with IMSS/INFONAVIT can take place online, for example registering new employees. It is advisable to seek professional advice when hiring employees for up-to-date information on legislation.

Register with the SIEM

Register with the National Business Information Registry (SIEM). This registry is run by the Department of Trade (Secretaría de Economía).

The location and purpose of the business should be entered. There is a fee for registration depending on the number of employees.

Foreign Investment Register

If one or more of the owners is a foreign national without permanent residence status, it is also necessary to register the business with the Foreign Investment Register (Registro Nacional de Inversión Extranjera) (part of the Department of Trade).

This must be done in person within 40 working days of incorporation of the business by someone designated in the deed as having power of attorney (poder).

A form must be filled in and submitted along with a copy of the deed and the identification documents of the person doing the registration.

Note that this registration must be renewed every year; some companies are required to present a quarterly report of income and expenses.

Importer's Registry

Companies intending to import goods into Mexico for sale must register with the Importer's Registry administered by a Unit of the Ministry of Treasury. It is not necessary to register if goods are intended for use by the company and not subject to marketing.
In order to register, importers must have residency in Mexico, must be registered and in good standing with Mexican tax authorites (SAT), and must have identified a customs broker.
Learn more about the Importer License (in Spanish)

"Vucem"

Importers must enroll with VUCEM, which acts as a centralized information platform for goods imported to Mexico. VUCEM ensures that the requirements and regulations of all government agencies relevant to a particular good are communicated to the importer, and provides information about payment of duties, taxes, and related charges.
Enrollment is free and can be done on the VUCEM website.