Mexico is a part of the North American Free Trade Area, it develops rapidly and is rightly considered as one of the most highly developed countries in the region. It is a member of "The Big Latin American Three" (like Brazil and Argentina). More than 20,000 external companies invest in its economy, and an establishment of a company in Mexico can bring a lot of rewards to the founders. If you are among interested foreign investors, you may expect to get lots of benefits here after choosing one of these registration options.
Major Forms of Legal and Business Presence
If you are interested in forming a company in Mexico, this may be arranged in one of these widespread registration forms:
- Limited Liability Company – a corporate entity that can be formed by two members only, including non-residents, and has a maximum of 50 shareholders whose liability is limited. They don't risk incurring any losses in excess of the funds contributed. It is a convenient form by the fact that the minimum capital shall be determined by the founders independently.
- Joint-Stock Company – is a body corporate most often used for involving extra financing. The obligations of founders are limited to the value of stocks owned only. The number of possible founders starts from 2 and is not limited. Stocks may be freely transferred and a company’s stockholders determine the amount of chartered capital independently.
Also, other options of business presence in this jurisdiction are available. For professionals providing legal, accounting, and other services, without the requirements for minimum capital, but with personal responsibility, a private enterprise may be a suitable form for doing business. Foreign companies may also think about establishing a branch for conducting the same types of business activities as abroad at minimal cost in Mexico. Prifinance lawyers will help you to choose the most suitable form and collect documentation for the establishment of a company in Mexico. We will undertake the organizational efforts and carry out all the procedures.
Registration Requirements and Steps
Company incorporation in Mexico covers these preliminary registration steps:
- Defining your business objectives and creating a business plan for a future enterprise.
- Collecting details about future founders, beneficiaries, and managers of a body corporate.
- Arranging the registered address for a future entity.
- Drafting statutory and registration documents.
- Submitting the set of prepared documents for the registration.
- Registration with tax and social security authorities.
- Opening a corporate tax account.
- Obtaining licenses and special permits that may be required for regulated types of activities.
The company's registration in Mexico takes about four to five weeks. After that, the owners are issued with documents, and they can start the activities - it will be controlled by regional and federal inspection authorities.
Legal and Regulatory Framework
In Mexico, foreign businessmen are provided with convenient business conditions - it is possible to start a business in almost any industry, except for the spheres stipulated in the legislation.
Precisely, the state only can work in the field of oil, nuclear and electric power, postal services, helicopter surveillance, and domestic land transportation of passengers and cargo, credit and broadcasting services are available only to citizens and companies of the country. In other respects, the Mexican economy is 100% open to foreign investors - tourism, hotel business, and trade are of particular interest. You can start a business without the participation of local co-founders, but all the company's founders must be in the country during registration. Also, it is necessary to get permission to establish a company with foreign capital.
Even taking into account all advantages it offers, it cannot be said that Mexico is low-tax zone, as it has rather strict rules for doing business. The companies are required:
- to maintain records and keep accounting - there are many checks and they are serious;
- every year to submit reports (statistics and finances) certified by an auditor;
- at the company's establishment, to register it to at least two founders are required - one of them can perform the director's functions.
Contact Prifinance lawyers for getting more precise consultations on the types of activities you intend to conduct and regulatory regimes applicable to such.
Tax System of Mexico
Company registration in Mexico may turn out to be a beneficial business arrangement taking into account these advantages of the jurisdiction:
- Corporate income tax rate – 30%
- Personal income tax rates (i) for residents – a progressive scale of rates up to 35% is applied, and (ii) for non-residents – a progressive scale of rates up to 30% is applied
- Value-added tax rate – 16%
- Withholding tax rates (for non-residents) – (i) dividends – 10% (ii) interests – from 4.9% to 35% (iii) royalties – from 5% to 35%
- Capital gains tax rates – (i) corporate – 25% / 30% / 35% depending on the type of a payer and income (ii) personal – basic 10% but this rate may vary depending on the transaction and income obtained.
Advantages of the Jurisdiction
Company incorporation in Mexico may be a promising venture taking into account these advantages this jurisdiction offers:
- Ease of access to US and Canadian markets
- Simplicity and low costs of company incorporation
- Availability of benefits from 50 free trade agreements
- Rich in natural resources
- Encourages foreign investment
How Prifinance Specialists May Help You
We offer prompt company registration and bank account opening services in Mexico and worldwide. New registration and ready-made options. Provide extensive details for more precise consultations and suggestions that can be effective for your future project.