Incorporating a company in Mexico as a foreigner is a lengthy process that can take up to 5 months.
The first step is to choose the suitable legal entity for your business goals. The main business entities that a foreigner can choose for conducting business in Mexico are the below 5:
- LLC: suitable for carrying out all kinds of activities and services as they require low initial capital and can be fully foreign-owned;
- Export Processing LLC: local companies under the Maquiladora program that are meant to conduct export-oriented businesses;
- Joint Stock Corporation: suitable for investors seeking to raise funds and list their company on the Mexico Stock Exchange (BMV or the BIVA);
- Representative Office: for companies that solely wish to engage in non-commercial activities such as marketing and research;
- Branch Office: for businesses that want a direct subsidiary of the mother company and to be able to prepare joint financial statements.
Once you confirm the preferred legal entity and the corporate structure including the resident legal representative, the main steps to set up a company in Mexico as a foreigner are as follows:
- Secure an approval for the formation of your business in Mexico from the Foreign Investment Commission of Mexico. This procedure can take up to two months to complete;
- Register the investment of your foreign company with the Mexican National Registrar of Foreign Investments;
- Decide a unique name for your Mexican entity and file a request with the Secretariat of the Ministry of Foreign Affairs to register the same;
- Prepare the i) company’s constitution and capital structure, confirm ii) the share and value of shares, iii) the registered business address and iv) the company secretary;
- Prepare the following company documents i) notarised passport copy of nominee resident legal representative, ii) copy of commercial office space registration certificate and iii) copy of lease agreement;
- Submit the above company incorporation documents along with the notarised documents and submit it with the Business Registrar of the city of incorporation;
- Within 1 month of submitting the above documents, if no issues with the filling of forms, the company would be legally incorporated. However, in certain cases it can take up to 3 months.
During the registration process you will have to also prepare a business plan and understand whether your business activity requires a specific operational license in Mexico or whether it requires to be registered with the Mexican Social Security if you need to hire staff.