Incorporate in Mexico

Why Incorporate in Mexico?

Incorporate in Mexico for USMCA market access, 100% foreign ownership in most sectors, nearshoring cost advantages, and reach into one of Latin America’s largest economies. The USMCA gives goods duty preferences across North America, per the USTR USMCA text. Foreign investors may hold any proportion of a Mexican company’s capital under the Foreign Investment Law, subject to a short reserved list.

The USMCA (T-MEC in Spanish) took effect July 1, 2020, replacing NAFTA, which had run since January 1, 1994, per USTR. Mexico permits up to 100% foreign ownership of Mexican companies under Article 4 of the Ley de Inversión Extranjera (Foreign Investment Law, LIE), per the Cámara de Diputados LIE text. Lower operating costs and a large domestic market round out the case.

What Are the Types of Business Entities in Mexico?

Two entities dominate for foreign investors: the S.A. de C.V. and the S. de R.L. de C.V. The S.A.P.I. de C.V. suits funded startups that need sophisticated shareholder rights. The S.A.S. is a single-shareholder online option that is unsuitable for foreign subsidiaries, because only individuals may hold it and its annual income is capped. Sociedad Civil and Sociedad Cooperativa exist but are rarely relevant to foreign incorporators.

The LGSM (Ley General de Sociedades Mercantiles, General Law of Commercial Companies) no longer fixes a statutory peso minimum for the S.A. or S. de R.L.; capital is set in the bylaws, per the LGSM text. The S. de R.L. is the US favorite because it can be a disregarded entity for US tax via a check-the-box election, covered in the subsidiary section below. The S.A.S. must convert to another form if annual income exceeds MXN 7,678,849.94 for 2026, per the Diario Oficial de la Federación.

Can Foreigners Own 100% of a Mexican Company?

Yes. Foreign investors may own up to 100% of a Mexican company in most sectors under Article 4 of the LIE, and no residency is required. The entity still needs a Mexican legal representative and a Mexican fiscal domicile. A short reserved list limits or bars foreign investment in strategic activities. Confirm your activity against the current LIE before drafting the objeto social (corporate purpose).

Most commercial, technology, and manufacturing activity is fully open to foreign capital. Check the reserved list early, since a restricted objeto social can force a redraft after the notary.

What Are the Requirements to Incorporate in Mexico?

You need at least two shareholders for an S.A. or S. de R.L., a Mexican legal representative, a Mexican fiscal domicile, and capital set in the bylaws. Shareholders can be individuals or legal entities, and neither must be a Mexican resident. An S.A. requires two shareholders minimum under LGSM Article 89, per the LGSM text. The legal representative needs a Mexican tax ID for banking and filings.

A fiscal domicile is a mandatory Mexico-based registered address for the entity. A commercial office, a virtual office, or a service provider’s address all qualify, and the SAT (Servicio de Administración Tributaria, the tax authority) verifies it. Without a valid fiscal domicile, the RFC and bank steps stall. Line up the address before the notary appointment.

What Documents Do You Need to Incorporate in Mexico?

You need the name permit, a draft Acta Constitutiva (charter with the objeto social and a foreigner-admission clause), shareholder IDs, proof of fiscal domicile, and a power of attorney (POA) for anyone signing remotely. Foreign entity shareholders carry extra apostille and translation steps. Foreign individuals usually need only an apostilled passport where required. Prepare these before the notary date to avoid a repeat visit.

A foreign shareholder who cannot travel grants a POA to a Mexican representative. That POA is notarized in the home country, apostilled, and translated into Spanish before the deed is signed. Handle the POA early, since apostille turnaround varies by country.

How Do You Incorporate in Mexico Step by Step?

Incorporation runs ten steps, from the name permit to social security registration, typically 4 to 8 weeks before bank KYC begins. The first four steps create the legal entity. RFC, e.firma, RNIE, and UBO records make it operational and compliant. Several steps run in parallel after the notary deed, which is where good sequencing saves weeks.

Where do you get the company name permit?

The name permit comes from the Secretaría de Economía (SE), not IMPI. The SE resolves an online denominación request within a maximum of 48 hours (2 business days) through its Módulo Único de Autorizaciones, per gob.mx. The permit is free and valid for 180 calendar days, per the SE procedure page. IMPI handles trademarks only, which is a separate process. You can test a name with Commenda’s company name checker before you file.

What does a notario público do?

A notario público is a highly trained lawyer with state authority who formalizes the incorporation deed. Most incorporations use a notario. A corredor público handles mercantile acts and can formalize some company types, so counsel picks the right officer for your entity. After notarization, the RFC, e.firma, and RNIE steps can run in parallel to compress the timeline.

What about the registry, RNIE, and UBO steps?

Registration with the Registro Público de Comercio via SIGER 2.0 gives the company legal standing against third parties; timing runs 3 to 15 business days and varies by state, and some states offer online filing. Foreign-owned entities must register with the RNIE (Registro Nacional de Inversiones Extranjeras, National Foreign Investment Registry), commonly cited as within 40 business days under the LIE. Since 2022, entities must keep UBO (ultimate beneficial owner) records under the CFF (Código Fiscal de la Federación, Federal Tax Code) and produce them to SAT on request.

How Long Does It Take and How Much Does It Cost to Incorporate in Mexico?

Plan for roughly 4 to 8 weeks to legal existence, plus 2 to 6 weeks for banking, at an all-in cost near USD 3,000 to 8,000+ for a foreign-owned entity. The name permit is free, but notary fees scale with the capital amount and are the largest single line. The figures below use approximate MXN-to-USD conversion; confirm rates at signing.

There is no statutory peso minimum capital for the S.A. or S. de R.L. under the LGSM; the bylaws set it, per the LGSM text. Banking is the long pole, so budget time, not just money.

How Do You Open a Corporate Bank Account in Mexico?

Banking is the slowest step for foreign-owned entities, running 2 to 6+ weeks because of KYC and AML (Anti-Money Laundering) review. Banks want the Acta Constitutiva, the RFC, proof of fiscal domicile, the legal representative’s ID and CURP, and UBO information. The RFC and e.firma gate the application, so getting those first is essential. Start bank conversations early, before the entity is even registered.

The document sequence matters more than the bank you pick. A missing RFC or an unverified fiscal domicile is the most common reason applications stall. Have the UBO records ready, since banks now request beneficial-owner detail up front.

How Does a US Company Set Up a Mexican Subsidiary?

Most US parents form an S. de R.L. de C.V. because it can be treated as a pass-through or disregarded entity for US tax via an IRS Form 8832 check-the-box election. The parent plus one affiliate typically satisfies the two-shareholder minimum under LGSM Article 61, per the LGSM text. The parent’s certificate, bylaws, and board resolution must be apostilled and translated into certified Spanish.

Holding-company structure choices affect US tax, so coordinate with your US advisor before drafting. Foreign qualification concepts map onto Mexican practice as RNIE annual reporting and corporate-book upkeep. Intercompany transactions with the parent trigger transfer pricing documentation. If your only goal is hiring a few people, weigh an entity against an EOR first using the entity vs EOR calculator.

What Are the Ongoing Compliance and Tax Obligations After Incorporation?

Incorporation is the start, not the finish. The entity owes RNIE reports, UBO record maintenance, monthly SAT filings with CFDI (electronic invoice) issuance, and IMSS obligations once it hires. Even a dormant entity must file its required returns to avoid penalties. Map these deadlines the day the entity is registered, not after the first notice arrives.

Activity-specific licenses for alcohol, medical devices, financial services, or food are outside this guide’s scope and need sector-specific research. Track every deadline in one place with a compliance calendar.

What Common Mistakes Should You Avoid When Incorporating in Mexico?

The costliest mistakes are sequencing errors that stall bank KYC. The single most common error is checking the name with IMPI instead of the Secretaría de Economía, which handles the denominación, per gob.mx. IMPI only registers trademarks. Fix the sequence first and most delays disappear.

Other frequent mistakes: arriving at the notary without apostilled and translated documents, skipping the POA and forcing travel, missing the RNIE deadline, ignoring UBO records, and drafting an objeto social too narrow for banking. Work with a bilingual advisor and expect bureaucratic lead times, so start early. Getting the RFC and e.firma before the bank application is the practical difference between four weeks and twelve.

How Commenda Helps You Incorporate in Mexico

Commenda handles Mexican entity formation end to end, from the name permit through the RFC, RNIE, and bank account support, then manages the entity’s ongoing filings. Commenda’s incorporation service sequences each step so your bank KYC does not stall, and its entity management platform keeps your RNIE reports, UBO records, and SAT filings on schedule after formation.

Start with the company name checker to test your denominación, compare an entity against an EOR with the entity vs EOR calculator, and confirm partner tax IDs with global tax ID verification. Book a demo to get a Mexico incorporation timeline and cost estimate for your structure.