Notes when setting up a company in Mexico

Mexico, a market that is rising strongly, has attracted the interest of many international investors. Setting up a company in Mexico will become simpler if investors have some precautions in advance when setting up a company in Mexico. Viet An Law would like to note some information for customers through the article below.

Note on Legal Examiners when setting up a company in Mexico

Legal Examiner – “Comisario” is an important title in the governance structure of the joint stock company (Sociedad Anónima – S.A.) in Mexico, which acts as an independent supervisor, ensuring transparency and compliance with the law.

The main role of Comisario

• Monitoring the activities of the Board of Directors: Comisario is not involved in the day-to-day management of the company, but focuses on monitoring the decisions and actions of the Board of Directors. The goal is to ensure that the Board of Directors operates in the interests of all shareholders, and in compliance with the laws and the company’s charter.
• Financial and accounting audits: Comisario is responsible for reviewing and evaluating the company’s financial statements, ensuring that they honestly reflect the financial situation. They check compliance with accounting standards and tax regulations.
• Protection of shareholder rights: Comisario is the representative of the interests of shareholders, especially minority shareholders. They ensure that the company’s decisions do not harm shareholders.

Comisario Benefits

• Monitoring the activities of the Board of Directors:
  • Attend Board meetings and follow discussions and decisions.
  • Request information and documents from the Board of Directors for the purpose of supervision.
  • Report to the General Meeting of Shareholders on important issues.
• Check the financial statements:
  • Review annual and periodic financial statements.
  • Assess the accuracy and completeness of financial information.
  • Have the right to request an independent audit if necessary.
• Report to shareholders:
  • Presenting a report at the General Meeting of Shareholders on the results of supervision and inspection.
  • Give opinions and recommendations on issues related to finance and governance.

Subjective factors to become a Comisario

• Independence:
  • This is the core element, ensuring that Comisario can carry out its duties objectively and honestly.
  • Independence requires Comisario not to have any financial, personal, or professional relationships that could affect their ability to make decisions. and have no close family or business ties to Board members or major shareholders.
  • Independence helps Comisario to make unbiased assessments and reports, protecting the interests of all shareholders, especially minority shareholders.
• Liability:
  • Comisario is legally responsible for its actions and decisions in the performance of its duties. This means that they can be held liable if they violate the law or cause damage to the company due to negligent or intentional behavior. This legal responsibility motivates Comisario to carry out its duties carefully and professionally.
  • It is important for Comisario to understand the legal provisions related to its role, and to act responsibly to avoid legal risks.

Notes on charter capital when setting up a company in Mexico

Sociedad Anónima (S.A.)

S.A. is similar to a holding company in many countries, allowing capital to be raised from the public through the issuance of shares. This is a popular type of company for large-scale businesses that want to expand their operations and grow rapidly. A minimum charter capital of MXN 50,000 is a mandatory requirement for the establishment of an S.A. in Mexico.

The process of implementing capital contribution

• Opening a bank account: Before registering for S.A., investors need to open a bank account in the company’s name and pay the charter capital
• Bank issuing confirmation: The bank will provide a certificate or receipt confirming the payment.

Limited Liability Company (S. de R.L.)

This is a form of limited liability company, which is popular for small and medium-sized businesses. The minimum charter capital of this type is 3,000 MXN and the maximum is 50,000 MXN.

The process of implementing capital contribution

• Opening a bank account: Before registering for the establishment of S. de R.L., investors need to open a bank account in the name of the company and proceed to pay the charter capital
• Bank issuing confirmation: The bank will provide a certificate or receipt confirming the payment.

Notes on tax rates when setting up a company in Mexico

Corporate Income Tax (ISR)

• Characteristics: This is a direct tax, levied on the net profit of the business. The general tax rate is 30%. In addition, there are other regulations for industries and special economic sectors.
• Note:
  • Businesses need to file annual tax returns and may be required to pay provisional tax on a monthly basis.
  • Tax-deductible expenses need to comply with the regulations of the tax authority.

Value Added Tax (IVA)

• Characteristics: This is an indirect tax, which taxes on the added value of goods and services. The general tax rate is 16%.
• Note:
  • Businesses need to file an IVA tax return every month.
  • Electronic invoice management (CFDI) is mandatory.

Other taxes

• Local Tax (Impuesto Predial): This tax levies on property ownership. Tax rates and regulations may vary by state and city.
• Special Tax (IEPS): This is a special consumption tax, which applies to certain items such as alcohol, tobacco, and gasoline.