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Overview

Mexico has signed various free trade agreements with more than 47 countries and is one of the hotspot for free flow of goods and services. It provides promising investment and business opportunities to foreign companies wishing to extend their reach.

Benefits of setting up in Mexico

Most free trade policies and connect North as well as South American consumers;
Easy trade of goods and services without any customs;
Low cost of operations due to low labour cost;
Tax exemptions on employment costs;
Low rents and cheap electricity;
Reduction or waiver of taxes on dividends;
Conversion of currency without any restrictions;
Manufacturing and trading entities are exempted from payment of taxes.

Types of entities in Mexico

Limited Liability Corporation (LLC)

Limited Liability Company can be setup with 2 shareholders and 1 director, who can be of any nationality. But one local legal representative is required to be appointed for liasoning purposes.
Such company allows for 100% foreign shareholding and does not require any minimum share capital. Further, these companies can also setup export processing zone company after fulfilling the criteria of exports more than US$ 500,000 or 10% of the annual sales and obtaining necessary approvals.

S-Corporation

In order to raise funds in Mexico, a stock corporation may be setup with atleast MXP50,000 and 20% out of which shall be paid-up.
Further, such corporation shall have 2 shareholders and 1 director, who need not necessarily be resident.

Branch Office

A branch office can be setup in Mexico by a foreign entity as its extension and an approval of General Foreign Department of the Ministry of Economy is required to be obtained;
Such office can enter into contracts with local suppliers and invoice and receive income from local customers.

Representative Office

A representative office can be setup by a foreign company to assess and research business opportunities and promotion of parent company in Mexico but cannot engage in any revenue generating activity.
It requires having only one local agent/ distributor and a registered office but no minimum share capital.

Comparison of entities in Mexico

	Limited Liability Corporation (LLC)	S-Corporation	Branch Office	Representative Office
Legal Status	Separate Legal Entity	Separate Legal Entity	No separate identity	No separate identity
Limited Liability	Yes	Yes	no	No
Minimum Capital	US $200	US $3,500	None	None
Limit of shareholders/ partners	Minimum 2	Minimum 2	Parent Company	Parent Company
Requirement of Director/ Manager	Minimum 1	Minimum 1	N.A	N.A
Requirement of Company Secretary	N.A	N.A	N.A	N.A
Registered Office Address	Mandatory	Mandatory	Mandatory	Mandatory
Opening of Bank Account	Mandatory	Mandatory	Mandatory	Mandatory

Services offered by CorpAcumen Global

We at CorpAcumen Global assist you in identifying best suitable entity considering the goals of your businessand thereafter initiate the setting up process

Submit incorporation documents with the authorities in the preferred state
Provide registered office and local company secretary
Post incorporation, assist in opening of bank account with suitable banker
Obtain necessary licenses for the type of business
Provide services pertaining to accounting and taxation
Ensure continual compliances post incorporation, both event as well as annual based

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