Step One: You Must First Reserve the Name of Your Company
Your name must be authorized by the Secretaria de Economía in Mexico. You should provide 5 options in order of preference. The Secretaria de Economia will eliminate those that have already been taken and you will receive the name of your company based on your preferences. In some cases, this process can be done online. Your Mexican lawyer or Notario can do this step for you. It should be noted that this step is completely free, can be done online.
Step Two: The Deed of Incorporation
For this process, we will use a Notario. A Notario is much different than it is in the United States. Anybody can be a Notary in the United States (I know because I was one), but there are only a few Notarios in Mexico and they are chosen by the Governor of the state. Before this process, you must already know what type of business structure you want to operate from. There are a number of types of business entities in Mexico and I suggest you review them or listen to your lawyer before you can make a decision. I suggest Sociedad de Responsabilidad Limitada as it gives control to the person that provides the most capital. Each Notario is different and they charge approximately $10,000 to $15,000 pesos to do this.
Step Three: The Signing of the Deed of Incorporation
A Notario must be present when you sign the deed of incorporation. You will need the following:
- Every owner mentioned in the deed present
- Identification documents of each member
- Every owner that is foreign to Mexico must present his passport and proof of legal presence in the country
- CURP (Mexican equivalent to a Social Security Number)
- RFC Number (Tax ID)
- Proof of address (Must be from Mexico)
Included in the deed of incorporation must be the person whom you give power of attorney to. This person will represent you in litigation and will act under your name. The cost of giving power of attorney to someone ranges from $5,000 to $9,000 pesos.
Step Four: Registering the Business Address
You must register the address of your business. This can either be in the place where you are doing business or where you desire to receive notifications at.
Step Five: Registering the Business with the Mexican Tax Authorities
You must register the business for Tax Purposes with SAT, the Mexican equivalent to the IRS. I highly recommend that you make an appointment online before visiting SAT as lines can be extreme at times. They are going to ask for the same documents that you presented to the Notario when he drafted the deed of incorporation including the deed itself. If the deed is not yet finished you need a letter from the Notario stating that the deed is in process.
Step Six: Only Applicable to Businesses that are Open to the Public
This step only applies to businesses that are going to be open to the public like a restaurant or a retail store, if you are opening an office, a call center, or a manufacturing business then you don’t have to worry about this step. Before you open your business to the public you are going to have to notify the government in order to obtain a municipal business license. At this step, you must also secure any other type of license that you might need in order to start operating. For example, if you are opening a business that is going to be making hazardous materials like chemicals you are going to have to apply for a number of distinct licenses. The same goes if you are opening a restaurant.
Step Seven: Registering Employees
You will register all of your employees with the IMSS (Mexican Social Security Institute) and with INFONAVIT (Mexican Housing Fund). You must show in their paycheck the amount of money that is going to these two funds along with the local state taxes. This process can be either fast or slow depending on the amount of employees and the complexity of their contract
Step Eight: Foreign Investment Registry if Applicable
This step only applies if one of the owners is a foreigner who does not have a permanent resident status. If this is the case then you must also register the business with the Registro Nacional de Inversión Extranjera. The government office that keeps track of all foreign investment coming into Mexico. This can be done by the Mexican national who you gave power of attorney to.
I hope this article on setting up a business in Mexico has been helpful. Once you have your entity, you will be able to open a bank account and will need a local accountant to handle payroll and related filings. We can help you to set up a business in Mexico. We are focused on Baja California (Tijuana, etc.), Mexico City, and Monterrey. For more information, and a detailed quote, you can reach me directly at firstname.lastname@example.org.