Businesses in Mexico

• Mexican Law does not require a minimum share capital, it only requires two shareholders/partners, and each must subscribe/own at least one share/participation in the share capital.
• (For “Limited Company [S.A.]” the minimum share capital of the company must be, at least, $0.02 peso cents, derived from the fact that a minimum of two shareholders is required [minimum one cent for each shareholder].
• For “Limited Liability [S. de R.L.]” The minimum share capital of the company must be at least $2.00 pesos, derived from the fact that a minimum of two partners is required [one peso for each partner]).
• There is a type of single-member corporation (Sociedad Unipersonal) known as “Simplified Stock Companies [S.A.S.]” but the characteristics of this type of entity are not usually compatible with corporate groups.

Types of recommended Mexican companies:

•  "Limited Liability Company" (Sociedad de Responsabilidad Limitada) recommended for corporate groups:
  • Requires fewer operational procedures than a S.A. (corporation), but demands more procedures for the transfer of shares in the social capital and admission of new partners.
  • It is represented by indivisible and non-negotiable social shares (not shares).
  • Each company has a stake in the social capital, and its value will depend on its contributions. The stake in the social capital can only be divided if it grants different corporate rights (for example, economic or voting rights only).
  • The liability of the partners is limited to the amount of their respective contributions.
  • Maximum of 50 partners.
  • Annual approval of financial statements is required.
  • The Commissioner is optional, not mandatory.
  • Certificates of participation in shares are optional, not mandatory.
  • Managed by "Managers" (Single Manager or Board of Managers).
• "Corporation" (Sociedad Anónima) recommended for independent (unrelated) investors: 
  • It has more operational formalities than an S. de R.L., but it is easier to sell and transfer shares.
  • Its social capital is represented by shares.
  • Prioritizes social capital over individuals and can issue different series or classes of shares for purely capitalist shareholders.
  • It is a more regulated type of company, which can generate greater stability and trust.
  • It is required to approve financial statements annually.
  • The Commissioner is mandatory, not optional.
  • Share certificates are mandatory, not optional.
  • Managed by "Administrators" (Single Administrator or Board of Administration).
  • Branch (a branch of your business abroad).
  • It is not a separate legal entity but an extension of the parent company abroad.
  • Permits/Authorizations are required from the National Registry of Foreign Investments.

• Personal income taxes: Taxpayers considered residents of Mexico are responsible for Mexican tax on income generated anywhere in the world.
  The current rates of Personal Income Tax in Spain are between 0% and 35%
• Social Security: Employers and workers also must pay the fees related to the insurance of the mandatory scheme in accordance with the Social Security Law. In general terms, the current percentage of the payment made by the employer can reach up to 38.73% and for the worker up to 2.775%.
  Employers must consider that by establishing an employment relationship with foreign subordinates, they acquire the quality of insured subjects before the Mandatory Social Security Regime of the IMSS since there is no provision that excludes them from such right.
• Income Tax for Commercial Companies: The current rate of the Tax for Commercial Companies in Mexico is: 30%.
• VAT: VAT is a "tax on goods and services", whose standard rate is 16%. If a business carries out taxable activities, it must pay VAT.
  Entrepreneurs subject to VAT are required to file a monthly VAT return. The deadline for filing returns is the 17th of each month.
• Compliance requirements: The filing of all tax returns by companies will be mandatory by electronic means, for which a digital certificate is required.

• Obtain permission/authorization to use the company name/denomination for the new Mexican company from the Ministry of Economy (3-7 days).
• Power of attorney (PoA) of foreign shareholders and company bylaws (1-1.5 weeks).
• Execute and obtain the constitution deed (public deed) before a Mexican Notary Public (2-3 weeks).
• Register the public deed in the Public Registry of Commerce "RPC" (1-4 weeks, this time will depend entirely on the availability of the RPC)
• Register the new company in the National Registry of Foreign Investments (10 business days after completing the registration in the RPC).
• Register the new company with the Tax and Social Security Authorities (1 week).

1. Shareholders / partners must contribute the entire share capital.
   
2. They may contribute money or assets/property.
   
3. Contributions can be granted/invested at the time of incorporation or later, but in S.A. at least 20% must be granted in the constitution and in entities type S. de R.L. 50%.

• Verify the viability of the corporate purpose/activity/main business of the intended company in accordance with the Foreign Investment Law.
  
• Obtain the permits to use the denomination or business name of the new Mexican company before the Ministry of Economy.
  
• Process the power of attorney (PoAs) of the foreign shareholders for the constitution, as well as their articles of incorporation (or other document that proves their legal existence [for legal entities]), duly notarized and apostilled in the country of residence.
  
• Obtain official translations of foreign documents, as well as seals / apostille certificates.
  
• Determine the structure of the capital stock, the administrative body and powers, as well as the corporate bylaws for the signing of the articles of incorporation before the Mexican notary public.
  
• Begin the registration process with the Public Registry of Commerce (RPC).
  
• Obtain the Mexican tax identification number (“RFC”) as well as the electronic signatures and passwords.
  
• Open bank accounts.
  
• If applicable, obtain the authorizations, permits, licenses and other equivalents applicable to the industry of the new Mexican company to be able to operate and for the use of real estate.
  
• If applicable, register the company with the labor / social security authorities.
  
• Prepare and maintain corporate records:
  
  • Record Book of Minutes of Shareholders' Meetings.
    
  • Shareholders Registry Book.
    
  • Registry Book of Changes in Social Capital.
    
  • Record of Minutes of the Meetings of the Board of Directors.
    
  • If applicable, Stock Certificates.
    
• Report to the Ministry of Economy the structure of the social capital through its electronic platform.
  
• Register in the National Registry of Foreign Investments.

To incorporate a new Mexican company, advisors and notaries must identify the client for anti-money laundering purposes - Know Your Customer (KYC) processes will apply to foreign shareholders.