Mexico

Company Formation in Mexico

United Mexican States — Secretariat of Economy (SE)

Formation Time

2–4 weeks

Min. Capital

MXN 50,000 (SA de CV — minimum variable portion)

Corporate Tax

30%

Foreign Ownership

100%

Overview

Mexico is Latin America's second-largest economy and the world's 12th largest by GDP, with a massive domestic market of 130 million consumers and the most significant nearshoring opportunity of the current decade. As companies globally diversify their supply chains away from China, Mexico has become the primary beneficiary due to its shared 3,145-kilometre border with the United States, USMCA trade agreement providing preferential access to the US and Canadian markets, competitive labour costs, established manufacturing infrastructure, and 14 free trade agreements covering 50+ countries. Mexico's corporate income tax rate is 30%, which is on the higher side internationally, but the country offers several incentives through Special Economic Zones (ZEEs), the IMMEX (maquiladora) programme for manufacturing and re-export, and various sector-specific tax incentives. The most common entity types are the SA de CV (Sociedad Anonima de Capital Variable — equivalent to a variable capital corporation) and the S de RL de CV (Sociedad de Responsabilidad Limitada de Capital Variable — equivalent to a variable capital limited liability company). Formation requires a notary public (notario publico) and registration before the Public Registry of Commerce. Mexico permits 100% foreign ownership in most sectors, though strategic sectors (oil and gas, nuclear energy, telecommunications, postal services) have restrictions. The country has an extensive treaty network of 60+ DTAs and charges 16% IVA (Impuesto al Valor Agregado — VAT) with a 0% rate available in certain border region transactions.

130M consumer market

Nearshoring boom — record FDI

USMCA trade access

IMMEX duty-free manufacturing

14 FTAs covering 50+ countries

60+ double tax treaties

Why Choose Mexico

130 million consumer market — Latin America's 2nd largest economy

Nearshoring boom — primary beneficiary of China-plus-one supply chain diversification

USMCA trade agreement — preferential access to the US (330M) and Canada (40M) markets

3,145 km US border — unmatched logistics connectivity via road, rail, and sea

IMMEX (maquiladora) programme — duty-free import of raw materials for re-export manufacturing

14 free trade agreements covering 50+ countries

60+ double taxation agreements

Competitive labour costs — skilled manufacturing workforce at a fraction of US/European rates

Business Entity Types

Entity	Ownership	Directors	Capital	Tax	Best For
SA de CV	100%	1 (sole administrator) or 3+ (board of directors)	MXN 50,000 minimum variable portion (no minimum fixed capital requirement)	30% corporate income tax	Most businesses — manufacturing, trading, services, large enterprises
S de RL de CV	100%	1 (manager/gerente)	MXN 3,000 minimum	30% CIT; can elect pass-through treatment for US tax purposes (useful for US parent companies)	SMEs, joint ventures, US-parent subsidiaries (for check-the-box tax planning)
Branch Office	100%	1 (legal representative — must have Mexican residence)	No separate minimum	30% on Mexico-sourced profits	Foreign companies with specific project-based work in Mexico
SAPI de CV	100%	1 (sole administrator) or 3+ (board)	MXN 50,000 minimum variable portion	30% CIT	Startups and VC-backed companies — allows flexible shareholder agreements, tag-along/drag-along rights, vesting

Step-by-Step Formation Process

Name Authorisation

1–3 business days

Obtain company name authorisation from the Secretariat of Economy (SE) through the online portal. You must submit three name options in order of preference. The authorisation is valid for 180 days.

Notarisation of Constitution

3–5 business days

Appear before a Mexican notary public (notario publico) to execute the constitutive act (acta constitutiva). This includes the articles of incorporation, bylaws, appointment of directors/administrator, and designation of legal representative. Shareholders can appear via POA.

Public Registry of Commerce Registration

5–10 business days

Register the company with the Public Registry of Commerce (Registro Público de Comercio) in the state where the company will be domiciled. This gives the company legal personality.

RFC Registration & e.firma

1–3 business days

Register with the Tax Administration Service (SAT) to obtain the RFC (Federal Taxpayer Registry) and the e.firma (electronic signature/digital certificate) for electronic tax filings and invoicing.

RNIE Registration

3–5 business days

Register with the National Foreign Investment Registry (RNIE) at the Secretariat of Economy. This is mandatory for all companies with any foreign shareholding.

Bank Account & IMSS Registration

1–3 weeks

Open a corporate bank account and register with IMSS (Mexican Social Security Institute) and INFONAVIT (housing fund) if employing staff.

Costs & Fees

Government / License Fee	MXN 2,000 – 8,000
Our Service Fee	USD 3,000 – 8,000
Annual Renewal	USD 2,000 – 5,000

Fees are indicative and may vary based on business activity, entity type, and additional approvals required. Contact us for a precise custom quote.

Get Custom Quote

Banking

Mexico has a well-developed banking sector with both large domestic banks and international institutions. BBVA Mexico (formerly Bancomer) is the country's largest bank. Account opening for foreign-owned companies is straightforward but requires the RFC and e.firma. All transactions above MXN 15,000 are reported to the financial intelligence unit (UIF).

Account Opening Time

1–3 weeks

Multi-Currency

Yes — multiple currencies supported

Recommended Banks

BBVA MexicoBanorteCitibanamex (Citigroup)Santander MexicoHSBC MexicoScotiabank MexicoBanco AztecaWise Business

Tax Overview

Corporate Tax

30% flat rate on worldwide income for Mexican tax residents

Personal Income Tax

1.92–35% progressive rate (employees and self-employed)

VAT / Sales Tax

16% IVA (Impuesto al Valor Agregado) standard rate; 0% on border region for certain transactions; 0% on food, medicine, and certain exports

Capital Gains Tax

30% (included in CIT base for companies); 10% on stock market gains for individuals

Withholding Tax

10% on dividends (from after-tax profits); 25% on royalties; 25% on technical assistance fees (reduced by treaties)

Double Tax Treaties

60 countries

Mexico's IMMEX programme allows duty-free temporary import of raw materials and components for manufacturing and re-export — critical for the maquiladora/nearshoring sector. The employee profit-sharing (PTU) requirement mandates distribution of 10% of taxable income to employees, which is an additional cost beyond the 30% CIT. Digital services provided by non-residents to Mexican consumers are subject to 16% VAT (collected by the platform or service provider).

Visa & Residency

Temporary Residency

1–4 years

For business owners, investors, and employees of Mexican companies. Renewable.

Permanent Residency

Indefinite

Available after 4 years of temporary residency, or through family ties, or with sufficient investment/pension income.

Business Visitor Visa (FMM)

Up to 180 days

For business meetings, contract signing, and market research. No work permit included.

Family visa: AvailableProcessing: 2–8 weeks depending on programme

Frequently Asked Questions

What is the nearshoring opportunity in Mexico?

Nearshoring refers to companies relocating manufacturing from Asia (primarily China) to Mexico to reduce supply chain risk, lower logistics costs, and benefit from USMCA preferential trade access. Mexico received record FDI in 2023–2024 driven by this trend. Key sectors include automotive, electronics, medical devices, aerospace, and consumer goods. Northern border cities (Monterrey, Ciudad Juárez, Tijuana) and the Bajío region (Querétaro, Guanajuato, San Luis Potosí) are the primary beneficiaries.

What is the difference between SA de CV and S de RL de CV?

An SA de CV (Sociedad Anónima de Capital Variable) is a variable capital corporation — the most common structure in Mexico, analogous to a public limited company. An S de RL de CV (Sociedad de Responsabilidad Limitada de Capital Variable) is a variable capital limited liability company. The key difference is that an S de RL can elect 'check-the-box' classification for US tax purposes, making it the preferred structure for US-owned subsidiaries seeking tax-efficient repatriation.

Can I own 100% of a Mexican company as a foreigner?

Yes, in most sectors. Mexico permits 100% foreign ownership across the vast majority of commercial, industrial, and service activities. Restricted sectors include oil and gas (exclusively reserved to the state or authorised by the energy regulator), nuclear energy, postal service, and certain telecommunications activities. All companies with foreign shareholders must register with the RNIE.

What is the IMMEX programme?

IMMEX (previously known as the maquiladora programme) allows companies engaged in manufacturing or services for export to temporarily import raw materials, components, and equipment duty-free. The programme is critical for Mexico's export manufacturing sector and is one of the main drivers of the nearshoring trend. Companies must export at least 10% of their output to qualify.

Is electronic invoicing mandatory in Mexico?

Yes. Mexico requires all businesses to issue electronic invoices (CFDI — Comprobante Fiscal Digital por Internet) for every transaction. The invoices must be digitally signed with the e.firma certificate and validated by an authorised certification provider (PAC). Mexico has one of the most advanced electronic invoicing systems in the world — it is not optional.

What are the employee profit-sharing (PTU) obligations?

Mexican labour law requires companies to distribute 10% of their pre-tax profits to employees annually (Participación de los Trabajadores en las Utilidades — PTU). This was reformed in 2022 to cap individual PTU payments at 3 months of salary or the average of the previous 3 years' PTU, whichever is higher. This is a significant cost that must be factored into financial planning.