Starting a Business in Mexico
Owning a business in Mexico
Starting a business in Mexico, or acquiring an existing business presents an excellent investment opportunity for those with an entrepreneurial spirit. In order to protect yourself and your assets it is recommended that you form a Mexico corporation which may be done with the assistance of an attorney through any Mexican Notary.
There are two basic types of corporations in Mexico. The S.A. de C.V (Sociedad Anónima Capital Variable) is like a normal Canadian or US corporation while the S. de R.L. de C.V. is similar to a Canadian or US Limited Liability Corporation. The process your attorney will guide you through is as follows…
- First one must file for an Incorporation Permit for the company with the desired name before the Ministry of Foreign Affairs. It generally takes three to five working days to receive this permit.
- The next step is to actually incorporate the company before a notary public. The company’s initial capital contributions must be paid in full if paid in kind, or if making the contribution in cash it can be partially paid at a minimum of 20%. In the case of the SRL (Limited Liability Corporation), the initial amount required is 50%. The company then issues registered stock share certificates, and the shareholders are in turn added to the Company Stock Registry Book. Shares certificates are not necessary in the Mexico Limited Liability Corporations
- Immediately upon incorporation, the shareholders must hold a General Shareholder’s Meeting agreeing on: (i) the type of structure of the capital stock; (ii) acknowledgment that the fiscal year of the Company will run concurrent with the calendar year; (iii) designate a Sole Administrator or a Board of Directors for the Company; (iv) announce and agree to appoint at least one “Examiner” (auditor) to monitor the company’s activities financially on behalf of the shareholders (In the case of the SRL there is no requirement for an examiner); and (v) appoint a Director General.
- The Sole Administrator and/or members of the Board of Directors of the company may be foreigner. The BOD meeting may also be held inside or out of Mexico. If the Sole Administrator or Directors are not Mexican citizens and will be acting in Mexico, they will be required to apply for and receive an annual migratory permit.
- The Examiner (in the Sociedad Anónima) generally is an accountant from an accounting firm with which the Company is affiliated.
Timeframes for Incorporating
Besides obtaining prior approval from the Foreign Investments Authorities the incorporation date of the company is dependent upon:
1) Actual drafting and approval of the by-laws to be used for the company;
2) Approval of the corporate name chosen by the Company owners by the Ministry of Foreign Relations;
3) Execution of documents from the notary public for signing the incorporation deed.
Generally the entire process can be completed within a calendar month, depending on the efficiency of legal counsel.
Q. What is Internet and e-mail access like in Mexico?
A. High speed Internet access and wifi are available in most areas of Mexico and there are also numerous Internet cafes as well.
Q. How is the transportation? Are flights readily available?
A. Mexican highways are usually OK, but smaller Mexican roads are in generally poor condition. Potholes are common, and an endless chain of patching is underway. Air service from Mexico is well developed, with many direct flights daily within Mexico, to Canada, USA, Central and South America, and also direct flights to Europe. Average round trip airfare to a destination in Canada is around $500 USD. Bus service is excellent, frequent and inexpensive. Deluxe buses are operated on many runs with air conditioning and video movies. Taxis are also readily available.
Q. How do I send and receive mail and packages in Mexico?
A. The Mexican Postal System (Oficina de Correos) is in most Mexican villages. International carriers such as FedEx, UPS and DHL also service most major Mexican markets.