Published by Hector Lopez
Starting a business in Mexico is complex and anything but straight-forward. There can be as many as 13 to 16 different steps involved. The number of steps depends on whether the shareholders are Mexican or foreigners, in what industry the company will operate, and whether the company plans to import or export.
The Government of Mexico exercises very diligent oversight of corporations, involving several different agencies such as the Ministry of Foreign Affairs, the Mexican Tax Authorities, and the Commercial Property Registry.
Each agency has its own separate requirements at the time of formation that require either authorizations and/or licenses. Additionally, the incorporation process in Mexico requires the use of a notary.
A notary is an attorney who is authorized by the government to undertake certain legal actions such as formalizing wills, certifying official documents, and forming corporations.
CORPORATION VS LIMITED LIABILITY COMPANY
The two most common business types in Mexico are the Sociedad Anonima de Capital Variable (S.A. de C.V.) and the Sociedad de Responsabilidad Limitada (S. de R.L.).
These are both corporate entities in Mexico for purposes of the law. However, the S. de R.L. is very similar to a partnership and in most cases will be treated like a partnership for tax purposes in countries like the United States.
In addition to the former, there is the Asociación Civil (Civil Association), Sociedad Civil (Civil Company), Joint-Venture, and Sociedad en Comandita (Limited Partnership). Most companies are overwhelming established as either an S.A. de C.V. or an S. de R.L.
Maintenance costs can be an impediment to forming a business in Mexico. The Mexican IRS (SAT or Hacienda as it is called in Spanish) requires monthly filings for tax purposes.
This does not mean monthly payments, but filings based on income and business for the month… even if zero… must be filed electronically – otherwise stiff penalties are incurred.
These filings may be taken care of by an officer of t