top of page
  • Writer's pictureNovus

How to form a Mexican Company?

Updated: Apr 7, 2022

You just decided it's time to expand your business to Mexico. You know about its enormous potential and of the abundance of qualified tech talent, and you want to know more about the legal stuff.

Well, we've got you! In this post, we are going to discuss how to incorporate a Mexican company. Please, be advised that nothing in here is legal advice. If you want us to guide you through the process, shoot us a line here.

Where to start?

First, choose the type of entity you want to form, there are several options to choose from.

S. de R.L. de C.V.

In our experience, the top choice for a subsidiary is the S de R.L de C.V.

This entity provides the limited liability advantage of a regular corporation, but it is “easier” to manage. For example, there is no requirement to appoint a board of directors (a sole manager is acceptable) or; to appoint a comisario (commissary) or a vigilance committee.

Also, it is a considered a “closed” company. This means that, by default, its membership interests can only be transferred if authorized by the partner's meeting with, at least, a majority vote.

S.A. de C.V.

This is the basic (even vanilla) Mexican corporation. A top pick for people investing in regulated industries (like fintech) because many times, Mexican regulations require this type of corporation to get a license or authorization. Also, this is the most used and better known by local attorneys throughout the country.

This entity does not require the establishment of a board of directors, a sole director is acceptable. However, it does require the appointment of a commissary. A commissary is an officer (with no agency authority) in charge of the vigilance and supervision of the board of directors and the management of the corporation. Commissaries must be independent, for example, they cannot be employees of the corporation or be a blood relative of any shareholder.

S.A.P.I. de C.V.

A corporation fit to raise venture capital. This is a corporation, very similar to the S.A. de C.V. However, with this entity is further regulated by Mexican Stock market Law. With this entity, it is possible to issue preferred shares or set up option pools for ESOPs, among other special features.

The best pick if you plan to use your Mexican entity to raise capital. However, maybe not the most efficient pick to use as fast moving a subsidiary. The law requires the appointment of a board of directors (no sole director option) for this type of entity. Also, the appointment of a commissary is required by law.

Done, now what?

You are ready to start the process, which has the following steps:

  • Get the name authorization.

  • Draft and notarize your bylaws.

  • Do the post-incorporation fillings.

  • Issue your post-incorporation documents.

Name authorization.

Before incorporating a company, you need to get the name of the entity authorized by the Ministry of Economy. This process can be done online, but you will need a valid tax electronic signature, issued by SAT (Mexican Tax Authority), to get this done. Once the Ministry of Economy authorizes your entity's name, you will have 6 months to complete the incorporation process.


Now, here comes the interesting part. You will have to draft your entity's Estatutos Sociales (Bylaws), get them notarized and sign the Escritura Pública (incorporation deed).

ByLaws contain the articles of incorporation (charter) and the actual bylaws. All these rules must be carefully written based on the Law applicable to the chosen entity, and it is highly advisable that they be drafted by a corporate attorney. Bylaws often include, the name of the corporation, its state of residence, rules of the stockholder’s agreement, rules of corporate governance, appointed agents, representatives and officers, among other matters.

Once you have your Bylaws, you need to take them to a notary public. The notary public will draft the incorporation deed, which will contain the bylaws alongside with additional representations required by Law. Once signed by the initial partners or shareholders and authorized signed and sealed by the notary public, your company legally exists.

However, you won't take home the actual deed you'll sign. The notary public will issue a document called testimonio, inscribe it in the public registry of your company's residence. Once it's registered, this document will serve as proof of incorporation. While the registration is pending, it is advisable to ask the notary public for one (or more) certified copies of the deed for record-keeping and to comply with some post-incorporation obligations.

Post-inc Fillings

There are 3 major fillings you will need to get done.

  • Public Registry.

  • Foreign Investment Registry (RNIE).

  • Tax registration (SAT).

Filling with the public registry will, generally, be handled directly by the notary public. Failure to register, could expose officers, agents, or representatives of the company to personal liability.

Companies with foreign individuals or entities as shareholders or partners must be registered within the National Foreign Investing Registry. This process can be done online by an agent of the company with duly appointed authority. The agent will need to have a valid tax electronic signature issued by SAT. Failure to register in RNIE will result in fines against the company.

Finally, the company will need to register with SAT to obtain its RFC (tax ID) and its Tax e-Signature. These two registrations must be done at SAT's offices by a duly appointed tax representative with sufficient authority. The tax agent must have a valid tax electronic signature issued by SAT.

Once all these registrations are completed, the company will be ready to open its bank accounts.

Additionally, you might want two consider some additional registrations: At the Social Security Institute (IMSS), if you plan to hire employees, and; at the National Immigration Institute (INM), if you plan to ask for work visas for foreign employees. These are not usually offered as post-inc registration services, Corporate Attorneys usually charge separately for these registrations.

Post-inc Docs

There are two basic post-incorporation documents your company must issue: the corporate books and the shares (for S.A. de C.V. and S.A.P.I. de C.V.) or membership interest (for S. de R.L. de C.V.) certificates.

Generally, the corporate books consist of a private ledger of stockholders' information and a book with all the minutes of any stockholder or directors meetings. The share or membership certificates consist of a document with certain information that certifies that the person listed in the certificate hold shares or a membership interest in the company. The nuts and bolts of these books and certificates vary depending on the type of entity you chose, so, it is highly advisable to have a competent corporate attorney drafting them for you.

Bank Accounts.

Once you have done all registrations, you will be able to set up a bank account. Banks in Mexico have different rules and procedures to open bank accounts, thus we recommend that our clients do their due diligence to pick the best option for them.

Now, here is a quick chart that summarized the process:

Awesome, any other thing I need to know?

Well, here are some of the FAQ we get from clients.

Is it true I need a Mexican Partner?

Not exactly. Foreign Investment Law allows foreign individuals to own 100% of the cap table. There are some exceptions, though:

  • Companies with assets with a value greater than the amount established each year by the National Foreign Investment Commission;

  • Companies that engage in an industry with a specific limitation set forth by the Foreign Investment Law itself (e.g Radio Broadcasting);

  • Companies that engage in an industry reversed exclusively to the Mexican government (e.g Nuclear energy development) or Mexican corporations with 100% of Mexican capital (e.g development banking for low income individuals).

In some cases, foreign investors will be able to hold more % of equity if they get approved by the National Foreign Investment Commission. We recommend hiring local legal counsel to help determine if your company might be subject to an exception from a foreign investment limitation.

Can I start a company with just one shareholder or member?

No. You will need at least 2 people,

Any special info about taxes?

During the past few years, Mexican tax system has been evolving to become 100%  paperless. This includes the obligation of every taxpayer to issue electronic invoices and use electronic accounting tools. Thus, after you register in SAT and get your RFC, you'll need your company’s official electronic signature and electronic certificates.

Now, you are all set.

As you can see, forming a business entity in Mexico is fairly easy, but it is a process you might want to navigate with a professional. If you’d like more information on the subject, please text us a line here.

589 views0 comments

Recent Posts

See All


bottom of page