Introduction
Starting a new business in a foreign country is never easy, and when we came to Mexico in 1996, we were clueless about how to start our own business. The internet wasn’t as advanced as it is today, and our Spanish skills weren’t good enough to handle all the legal stuff involved. So, we ended up hiring a lawyer to give us a hand and make our dreams a reality.
It’s really important to get a specialized lawyer involved in this matter. They’re the best people to give you advice and help you navigate the legal complexities. But it’s also good for you to have some basic knowledge of the legal framework so you can make informed decisions.
Below we compiled a comprehensive list of the most important points for you.
Research and Planning:
Identify the type of business you want to establish and ensure it complies with Mexican laws and regulations.
Conduct market research to understand the demand, competition, and feasibility of your business in Mexico.
Develop a detailed business plan, including financial projections and a marketing strategy.
Choose the Business Structure:
Decide on the legal structure for your business. The most common options in Mexico are:
- Sociedad Anónima (SA): Similar to a corporation.
- Sociedad de Responsabilidad Limitada (SRL): Similar to a limited liability company.
Consult with a lawyer or a legal advisor to determine the most suitable structure for your business.
Company Name and Registration:
Choose a unique name for your business and verify its availability with the Public Registry of Commerce (Registro Público de Comercio) or the Federal Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial).
Reserve the chosen name by filing an application with the corresponding authority.
Incorporation and Legal Documentation:
Prepare the necessary legal documents, including articles of incorporation and bylaws, which define the company’s structure, purpose, and operational guidelines.
Obtain a taxpayer identification number (Registro Federal de Contribuyentes or RFC) for your business from the Tax Administration Service (Servicio de Administración Tributaria or SAT).
Capital Requirements and Bank Account:
Deposit the minimum required capital in a Mexican bank account under the company’s name.
Obtain a certificate of deposit (constancia de depósito) from the bank.
Public Notary and Deed Registration:
Engage a Mexican public notary (notario público) to certify the company’s legal documents and oversee the incorporation process.
Execute the public deed of incorporation (escritura pública) before the public notary.
Register the deed with the Public Registry of Commerce.
Obtain Permits and Licenses:
Identify the specific permits and licenses required for your business activity, which may vary depending on the industry and location.
Apply for the necessary licenses from the corresponding authorities, such as the Ministry of Economy (Secretaría de Economía) or the local municipality.
Tax Registration:
Register your business for tax purposes with the Tax Administration Service (SAT) and obtain a tax identification card (Cédula de Identificación Fiscal).
Comply with Mexico’s tax obligations, including corporate income tax, value-added tax (VAT), and employer obligations.
Hiring Employees:
Familiarize yourself with Mexico’s labor laws and regulations, including employment contracts, minimum wages, social security contributions, and other obligations.
If you plan to hire employees, register with the Mexican Social Security Institute (Instituto Mexicano del Seguro Social or IMSS) to provide health insurance and other benefits.
Ongoing Compliance:
Comply with all legal, tax, and regulatory requirements applicable to your business activity in Mexico.
Keep accurate accounting records and submit periodic tax returns and financial statements to the relevant authorities.
Conclusion
It’s important to note that the process and requirements may vary depending on the type of business, location within Mexico, and specific circumstances. Consulting with a lawyer, accountant, or business advisor who specializes in Mexican business law is highly recommended to ensure compliance with all legal and regulatory obligations.
About the Author: Peter Demetz
