Procedures to set up a company in Mexico

If you are looking for a “gateway” to enter the potential Latin American market. Mexico is that golden key. Not only is Mexico a strong economy, but it also owns a prime geographical location, a trade bridge with the United States and the entire region. Therefore, setting up a company in Mexico is not only a business decision, but also a strategic step to conquer the vast Latin American market. Viet An Law would like to guide the procedures for establishing a company in Mexico through the article below.

Choosing the type of company to set up a company in Mexico

No matter how big or small your business is, Mexico offers special benefits for foreign investors:

• Absolute ownership: You can own 100% of investment capital for some industries, affirming a proactive position in business activities.
• Financial freedom: The remittance of profits to the country takes place easily, without capital control, creating peace of mind for investors.
• Protection of rights: Property ownership is strictly protected by Mexican law, ensuring the safety of your property.

To be able to choose the type of company, you need to carefully consider some of the following issues:

• Number of shareholders: Minimum 2 shareholders is a mandatory condition.
• Flexibility: Determine the level of freedom you want to have in managing and operating your business.

In Mexico, two popular types of companies chosen by investors are:

• Sociedad Anónima (S.A.) – Joint Stock Company: Suitable for large-scale enterprises, with many shareholders, or complex investment projects.
• Sociedad de Responsabilidad Limitada (S. de R.L.) – Limited Liability Company: Suitable for small and medium-sized businesses.

Registration of name to incorporate a company in Mexico

This procedure is carried out through the Mexican Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores, SRE).

• Prepare a list of company names: You need to prepare a list of 5 company names that you want to place and arrange in order of priority. These names need to comply with the regulations on company naming in Mexico, avoiding misleading or illegal names.
• Submit an application to SRE
• Inspection and approval: SRE will conduct an audit, if one of the names you propose is approved, you will receive an approval notification.

Drafting of the company’s charter to set up a company in Mexico

After the Mexican Ministry of Foreign Affairs (SRE) approves the company name, the next step is to draft the charter. The company’s charter should include the following important information:

• Founder Information: A list and details of the founders of the company.
• Company type: Clearly define the type of business you choose (e.g., S.A. or S. de R.L.).
• Company Name: The name has been approved by the SRE.
• Purpose of operation: A detailed description of the company’s business and operational goals.
• Charter capital: The authorized capital amount and capital contribution structure.
• Internal Charter: Regulations on management, operation and division of rights and responsibilities in the company.

After completing the drafting, the Company’s Charter needs to be notarized by a Notary Public or a Public broker.

Important notes for Joint Stock Company (S.A.):

• A single manager (legal representative) or Board of Directors is required.
• Appointment of Statutory Legal Examiners (Comisario).
• Having a registered physical office address to serve the receipt of official dispatches and papers.

Register for a corporate tax identification number to set up a company in Mexico

After completing the procedures for registering the company name and drafting the Articles of Incorporation, the next step is to proceed with the registration of a tax identification number for a business in Mexico. This tax identification number is called “Registro Federal de Contribuyentes” (RFC), which is equivalent to the corporate tax identification number in Vietnam. To carry out this procedure, you need to go directly to the offices of the Mexican Tax Administration (Servicio de Administración Tributaria – SAT).

List of documents to be prepared

• The company’s charter has been notarized.
• Documents proving the legal status of the company representative.
• Identity documents of the company’s representative (passport, identity card, etc.).
• The company’s business registration address.
• Other documents as required by the SAT.

Filing and Receiving an RFC Tax Identification Number

Submit the prepared application to the SAT staff. You will be issued an appointment letter to receive your RFC tax number. Come to the SAT office by appointment to receive an RFC tax number.

Registration of incorporation at the Register of Real Estate and Commerce to set up a company in Mexico

List of documents to prepare

• The Company’s charter has been notarized;
• RFC Tax ID;
• Identification documents of the company representative;

Apply at RPPC and receive a certificate of registration

The RPPC will conduct a check on the validity of the application. If the dossier is complete and valid, RPPC will proceed to register the company. After completing the registration, you will receive a certificate of company registration.

Registration at the Register of Offshore Investment of Mexico to set up a company in Mexico

For foreign-invested companies in Mexico, registration at the Register of Foreign Investment (RNIE) is a mandatory step by law.

• Eligible for registration: All foreign-invested companies operating in Mexico. Companies with large investments must also file annual financial statements to the RNIE.
• Registration Process: Registration is usually done online through RNIE’s system.