Select Page

Setting up a company in Mexico

by | Jul 30, 2022 | Corporate Structuring

Mexico setup a Mexican company – Luxembourg

Mexico is the second-largest economy in America, thanks to its strategic geographical location. It is situated between the United States and Central America, making it the bridge of operations between the two powerhouses. Forming a company in Mexico is reasonable due to its recent commercial success, which is deemed to be long-term.

The Mexican government strongly endorses globalization, so foreigners who are forming a company in Mexico find the process straightforward.

Benefits of setting up a company in Mexico

When starting up a company in Mexico, you can attain the following advantages, regardless of how small or big the company is:

  • Full foreign ownership
  • No capital controls for repatriation of profits
  • Tax benefits and deductions
  • Foreigners can establish a Limited Liability Company (LLC)
  • Strong property rights and protection
  • No need for a bank trust
  • Obtaining work visas
  • Absolute control over your investment

Factors to consider when setting up a company in Mexico

When setting up a company, you may want to consider these factors:

  • Business factors – The business atmosphere of Mexico is reasonably easy to operate in for foreign companies, with initiatives to facilitate incorporation, such as one-stop shops and more lenient minimum capital requirements. Note that Mexico’s historically elevated levels of corruption and high crime have raised security concerns for foreign companies. These factors must be considered in addition to the industry and type of business, the nationality of the headquarters or individuals, and the presence of existing trade agreements or relationships.
  • Location – Cities and regions may have different rules, costs, and availability. Seek advice on location from specialists (business/legal advisors, accountants, etc.) based on your needs.
  • Language – International language barriers can pose significant challenges. Even experienced companies can run into difficulties with suppliers or partners when language differences create miscommunications that could threaten plans in Mexico.

How to register a company in Mexico

Have you decided to expand your business to Mexico or incorporate a new company? If so, this guide compiles the steps to a successful company formation in Mexico.

Find the right type of business structure

Identifying the applicable type of business organization is the basis for company incorporation in Mexico and is necessary for additional registrations. The most popular legal entities are:

  • Stock Corporation (Sociedad Anónima, S.A.) – mostly used by domestic and foreign investors
  • Limited Liability Company (Sociedad de Responsabilidad Limitada, S. de R.L.) – also frequently used

Both legal entities grant limited liability to shareholders, where liability is limited to their capital investment.

Registration of the company’s name

Once you have chosen the type of company to incorporate, submit an application to the Ministry of Foreign Relations with five possible company names in order of preference. This ensures no company already exists in the country with the same name.

Define your company’s capital

Before beginning operations, determine the amount and structure of your company’s capital (stock or shares). The minimum capital of each shareholder/partner must be 1 peso.

Articles of incorporation: drafting and approval

The incorporation document will include the by-laws (company name, corporate purpose, registered office), investors’ names, and capital structure, among other details. All required documents need legal certification and an apostille. Once obtained, the documents must be translated by an official Mexican translator.

Obtain your Tax ID (RFC) from the Mexican tax agency

The next step is obtaining your company tax ID, known as the Registro Federal de Contribuyentes (RFC).

To finish this step, you will visit the offices of the Servicio de Administración Tributaria (SAT), the Mexican tax authority. One of our partner lawyers will take care of it.

Tax declarations

The entity will be liable for monthly tax declarations at SAT (Servicio de Administración Tributaria). Please note: a power of attorney is required for tax declarations.

Registration of employees

For hiring employees, it is essential to register the company with social security and the National Workers’ Housing Fund.

Please keep in mind there is a specific permit to hire foreigners called Constancia de empleador. This authorization must be renewed yearly after the annual financial statements or if the company changes its legal representative or fiscal address.

Registration of foreign investment

Registration of foreign investment capital applies when any business owner has a nationality other than Mexican. Registration at the Ministry of Foreign Investment must be completed within 40 days after the incorporation date.

Open a corporate bank account

As the last step, open a company bank account. The legal representative can complete this step; the bank will require the company RFC and corporate information. Choose a local bank that offers the best pricing for international transactions and other important services. It’s recommended to work with a local professional familiar with the process.

Starting your business

Congratulations! You can start operating your business in Mexico.

Contact Damalion if you need assistance in setting up a company in Mexico. We look forward to working with you! 

Damalion – Luxembourg

Setting up a company in Mexico — entity options, required documents, name clearance, notary deed, Public Registry filing, RFC tax ID, foreign investment registration, hiring basics, invoicing (CFDI 4.0), and bank account.

For entrepreneurs, family offices, private equity, venture capital, corporate groups, and SPVs • Damalion helps you scope, prepare the file, and coordinate providers so institutions can review efficiently. Acceptance and timing remain at each provider’s discretion.

Last updated:

What makes Mexico company setup smoother?

Choose the right entity and keep documents complete and consistent. Explain your activity, ownership, capital, and expected operations in clear terms. Present clean identification of shareholders, directors, and ultimate beneficial owners. Plan the deed before a Mexican notary, prompt filings at the Public Registry of Commerce, tax ID (RFC) with SAT, and, if applicable, registration with the National Registry of Foreign Investments.

Main legal entities at a glance

Entity Typical use Ownership / capital Notes
Sociedad Anónima (S.A. / S.A. de C.V.) Operating companies, mid/large projects Shareholders; variable capital option Board or sole director; common for corporate groups.
Sociedad de Responsabilidad Limitada (S. de R.L. de C.V.) Closely held ventures, JV with pass-through feel Partners (quotas); variable capital option Transfer of quotas usually requires partner approval.
Sociedad Anónima Promotora de Inversión (S.A.P.I. de C.V.) Venture-style governance, investors’ rights Shareholders; flexible shareholder agreements Designed for investment and corporate governance flexibility.
Sociedad por Acciones Simplificada (S.A.S.) Micro/small ventures 1+ individual shareholder(s) Electronic formation possible; revenue cap applies by law.
Branch (Sucursal) Presence of foreign company No separate legal person Requires authorization and local registration steps.
Representative office Non-commercial liaison N/A No revenue-generating activities; limited scope.

Documents most firms prepare

  • Shareholder IDs; proof of address; corporate documents for any corporate shareholder.
  • Ownership chart up to individuals who are the ultimate beneficial owners (UBOs).
  • Draft bylaws (name, purpose, capital, shares/quotas, governance).
  • Name options for clearance (usually up to five).
  • Power of attorney, if representatives will sign.
  • Sworn and apostilled documents, with certified Spanish translations when required.

Company setup — simple roadmap

  1. Pick the entity and name. Decide S.A., S. de R.L., S.A.P.I., S.A.S., or other. Request name authorization.
  2. Prepare the deed. Agree bylaws, capital, governance, and sign before a Mexican notary (Notario Público).
  3. Public Registry filing. File incorporation with the Public Registry of Commerce in the company’s domicile.
  4. Get the RFC tax ID. Register the company with SAT and obtain the RFC. Arrange e.firma and invoicing (CFDI 4.0).
  5. Foreign investment registration (if applicable). Register with the National Registry of Foreign Investments within the statutory period.
  6. Social security and employer registry. Register as employer to hire staff; observe outsourcing and profit-sharing rules.
  7. Open the bank account. Provide corporate file, RFC, signatories, and activity description; run test payments.

Costs and timelines

  • Notary, translations, apostilles, registry fees, and government charges vary by state and file complexity.
  • Professional fees depend on scope (drafting, filings, tax and labor registrations, bank account support).
  • Typical timing after a complete file: several business days to a few weeks, depending on locality and follow-ups.

Frequently asked questions

Can foreign investors own 100% of a Mexican company?
Yes, in most sectors full foreign ownership is allowed. Specific activities have limits or prior authorization. Review the Foreign Investment Law and any sector rules before filing.
Is a notary required for incorporation?
Yes. The deed of incorporation is signed before a Mexican Notary Public, who validates identity, powers, bylaws, and corporate acts. The deed is then filed with the Public Registry of Commerce.
Do we need to register with the Public Registry of Commerce?
Yes. Registration gives publicity and legal effects to the company. Each state has a registry office for filings.
When must we register foreign investment?
When there is foreign participation in capital or control, registration with the National Registry of Foreign Investments is generally required within 40 business days of incorporation or of the investment event.
What is the RFC and when is it obtained?
The RFC is the tax ID issued by SAT. New companies obtain an RFC soon after incorporation to issue invoices (CFDI 4.0), make filings, and open a bank account.
Is CFDI 4.0 e-invoicing mandatory?
Yes. Mexico uses CFDI version 4.0. Companies must issue invoices that comply with 4.0 rules and keep electronic records according to SAT requirements.
Are there beneficial owner (UBO) obligations?
Yes. Legal entities must identify and maintain information on their beneficial owners and provide it to the tax authority when requested. Non-compliance may lead to penalties.
How many shareholders are required?
S.A. and S. de R.L. generally require two or more shareholders/partners. The S.A.S. may be formed by one or more individuals, subject to statutory income limits.
Is there a minimum capital?
Minimums are low and often nominal (for example, MXN 1 per shareholder/partner in some forms). Higher capital may be needed to match the business plan and bank expectations.
Can bylaws be in English?
Official filings and the notarial deed are in Spanish. Foreign documents need apostille and certified Spanish translation when required.
How long does incorporation take?
With a complete file, the deed and registrations may be completed within several business days to a few weeks, depending on local workload and any clarifications.
What about labor and outsourcing rules?
Outsourcing of core personnel is restricted. Specialized services require registration. Employee profit sharing (PTU) is subject to a statutory cap. Employers must register for social security and observe labor standards.
Do we need an employer registration to hire foreigners?
Yes. Companies obtain an employer registration with the immigration authority and keep corporate and tax data current to sponsor work permits.
Is a Mexican address required?
Yes. The company has a registered office in Mexico. Banks and authorities require an address for notices and inspections.
Are there sector licenses?
Some industries require permits or licenses (for example, financial services, telecom, energy, health). Check federal and state rules before starting operations.
Are there data protection rules?
Yes. The Federal Law on Protection of Personal Data Held by Private Parties applies to personal data processing. Companies must provide notices and implement safeguards.
Can we open the bank account before the RFC is issued?
Banks usually request the RFC, corporate documents, signatory IDs, and a clear activity description. Internal bank policies apply to acceptance and timing.
What taxes apply to operating companies?
Corporate income tax, VAT where applicable, payroll taxes at state level, and local duties may apply. Filing calendars and e-invoicing compliance are enforced by SAT.
Do we need accounting and statutory books?
Yes. Companies keep accounting records and corporate books (shareholders/partners, capital, minutes). Electronic records and timely filings are expected.
Can a bank or notary reject the file?
Yes. Banks and notaries apply their own policies and legal checks. A clear file and prompt answers reduce delays, but acceptance is always case-by-case.

10 Best Things to Do in Mexico City, Mexico in 24 Hours

Maximize a tight schedule with easy-to-reach highlights around Paseo de la Reforma, Chapultepec, and the Historic Center.

  1. National Museum of Anthropology – world-class pre-Hispanic collections. Jump to map
  2. Chapultepec Castle & Park – hilltop views and history.
  3. Palacio de Bellas Artes – architecture and murals.
  4. Templo Mayor Museum – Aztec ruins beside the Zócalo.
  5. Zócalo & Historic Center – main square and civic buildings.
  6. Frida Kahlo Museum (Casa Azul) – artist’s home in Coyoacán.
  7. Museo Soumaya – private collection in a striking building.
  8. Torre Latinoamericana – observation deck over the city.
  9. Xochimilco Canals – trajinera boat ride (time-permitting).
  10. Basilica of Our Lady of Guadalupe – major pilgrimage site.

10 Best Hotels in Mexico City (central and business-friendly)

  1. Four Seasons Hotel Mexico City – Reforma/Chapultepec.
  2. The St. Regis Mexico City – Reforma, skyline views.
  3. Sofitel Mexico City Reforma – modern rooms on Reforma.
  4. The Ritz-Carlton, Mexico City – tower above Reforma.
  5. Hyatt Regency Mexico City – Polanco, near parks and museums.
  6. JW Marriott Hotel Mexico City – Polanco business hub.
  7. W Mexico City – lifestyle stay in Polanco.
  8. Hilton Mexico City Reforma – by Alameda Central.
  9. Gran Hotel Ciudad de México – historic hotel at the Zócalo.
  10. Camino Real Polanco – iconic architecture, gardens.
  • Graphic – Luxembourg
  • Graphic – Luxembourg

Categories