Are you considering starting your own Mexican corporation or joining an existing Mexican business as a shareholder? It’s essential to understand some of the key regulations and requirements for foreigners investing in Mexico.
Can I be the only shareholder of a Mexican company?
Yes, it’s possible through a "Sociedad por Acciones Simplificada or S.A.S.," which allows a sole shareholder. However, we generally recommend having at least two shareholders, such as through a Sociedad de Responsabilidad Limitada (S.R.L. de C.V.) or a Sociedad Anonima de Capital Variable (S.A. de C.V.).
Is Mexican residency required?
No, Mexican residency is not required to be a shareholder. However, all shareholders must provide details like legal name, address, valid identification (passport), and foreign tax information (such as tax ID). If none of the shareholders have Mexican residency, it’s recommended that the company appoint a legal representative with a valid Mexican RFC (tax ID) and SAT electronic signature to handle tax registration and other formalities.
Is a Mexican investor necessary to open a business?
Depending on the business activity, a Mexican corporation can be formed entirely by foreign investors. However, certain sectors may require a percentage of Mexican ownership, while some activities are restricted solely to Mexican citizens or the government.
What’s the timeline to establish a Mexican company?
The duration depends largely on how quickly the required documents are provided. Once incorporated, the company must be registered as a taxpayer with the Mexican tax authority (SAT), which can vary in time depending on the authority's processing.
What other considerations are important?
The company must have a physical address within Mexico, as required by Mexican tax law.
Foreign companies may act as partners in a Mexican corporation, provided their documentation is properly notarized, apostilled or legalized, and translated if not in Spanish.
A foreign individual and their foreign company can both act as partners in a Mexican business, even if the individual is also a partner or owner of the foreign company.
The RFC (Mexican tax ID) applies only to the company as an entity, not to individual shareholders. Foreign individuals who wish to obtain an individual RFC must first secure Mexican residency (temporary or permanent) and later schedule an appointment with the tax authorities.
To sign documents for a Mexican company, personal presence in Mexico is required. However, this can be managed by granting a power of attorney, allowing representation in Mexico.
Hermes Sanchez
Practitioner of Mexican Law*
T. 778.814.7112
*Practitioner of Foreign Law, Mexico, Bachelor of Laws, Since 2008. Authorized to practice Mexican Law in British Columbia, Canada and Mexico
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