Incorporation - Types of Business Entities

There are several types of entities that can be incorporated in Mexico are as mentioned below:

• Limited Liability Stock Corporation (Sociedad Annima, S.A.)
• Limited Liability Company (Sociedad de Responsabilidad Limitada, S.R.L.)
• Civil Enterprise (Sociedad Civil, S.C.)
• Branch (Sucursal)
• Subsidiary (Subsidiario)

Time Frame for Incorporation of Company in Mexico varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. YourGlobalPro estimates the time required for the process of Company formation to be completed is 10-15 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Mexico:

• Abundant market opportunities
• Geographic proximity to the United States
• Labor rates are competitive
• A robust logistics network allows rapid transport of goods
• Numerous promising prospects, like in food processing equipment or architectural and engineering services

Tax Registration and Filing

All Business entities resident in Mexico are taxable on their worldwide income from all sources, including profits from business and property.

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. Mexico has double taxation treaties with over 50 countries.

Trademark registration

For trademark registration in Mexico application needs to be made to Mexican Trademark and Patent Office. It takes approximately 12-16 months’ timeframe to complete the trademark registration process. A Trademark Registration in Mexico is valid for 10 years from the application date and can be renewed six months before the trademark right expires by payment of renewal fees for 10 years indefinitely.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration for your business in Mexico. For assistance or advice in the matter of the trade mark registration or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Mexico:

• 100% foreign investment is allowed in the Companies.
• Minimum capital required is agreed by the shareholders at the time of business set up.
• Employers’ contributions to a pension plan that is managed by a bank in the employee’s name equal 2% of an employee’s compensation.
• All registered employers are required to formally notify the INM regarding changes in, among other items, their articles of incorporation, address and revocations of powers of attorney within 30 calendar days.
• Companies are required to annually update their employer registration file at the INM after filing their annual Mexican corporate income tax return.
• Foreign Companies need to obtain authorization from Ministry of Economy to conduct business.
• Registration of Branch of Foreign Company is required to be done with Public Registry of Commerce and the Foreign Investment Registry.
• The Companies must hold an annual shareholders’ or partners’ meeting to examine and approve financial statements.

Accounting Services

In Mexico, the companies to keep accounting books and records which generally includes Daily Book, Ledger, Book of Assembly Minutes of Shareholders, Shareholders Record of the Corporation, Book of Capital Increases and Decreases, (in the case of a Variable Capital).

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Mexico Business Setup as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

The entities, in Mexico, the companies are required to submit with the Public Registry of Commerce, (Registro Publico de) the financial report containing Financial Statement at the End of the Period, Balance Sheet, Statement of Income, Statement of Changes in Financial Position, Statement of Changes in Stockholders’ Equity, Notes of the Financial Statement.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide you with auditing services as required by your business.

Banking

The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening.  The major banks in Mexico are D Banco Regional de Monterrey, Bancomer, Banco Nacional de M×™xico, Grupo Financiero Banorte. All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Mexico.

Legal and Compliance

In Mexico, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Mexico legal and compliance requirement to be followed by incorporated entities:

• The Country has no foreign-exchange controls.
• Certain Mexican taxpayers must file additional transfer-pricing documentation, including a Master File and Country-by-Country Reports.
• The Secretariat of Economy requires import licenses for weapons and ammunition.
• Secretariat of Agriculture (SAGARPA) requires prior import authorization for some products.
• The Private companies engaged in insolvency, merger, liquidation, dissolution and/or spin-off procedures may be required to publish their financial statements.
• Publicly-held companies must submit financial statements with the National Banking and Securities Commission and the stock exchange where their securities are traded for public disclosure

YourGlobalPro professionals can assist you on the Mexico Legal and Compliance requirement.

HR and Employment Law and Immigration / VISA

Below are some of the important points in relation to HR & employment law in Mexico:

• Employees are entitled to at least one fully paid day of rest every six days and Employee can voluntarily agree to work on this mandatory day off
• Right to receive a year-end bonus known as Aguinaldo – distributed in December and equates to at least 15 days’ wage
• Employees are not required to work on public holidays that fall during the normal work week.
• Bonuses given to employees that work for an employer for 15 years or longer
• Employers must contribute 5% of salaries to the Housing Fund which provides funds for the construction of housing for workers.
• Foreign individual can enter Mexico on following types of Visa:
  • Visitor
  • Temporary resident
  • Permanent resident
• The companies that intend to hire or have foreigners under their responsibility must request a mandatory employer registration file from the National Immigration Institute (Instituto Nacional de Migración (INM)
• Employers’ contributions to a pension plan that is managed by a bank in the employee’s name equal 2% of an employee’s compensation.

Country Statistics