Mexico has the 15th largest economy on the planet, powered by a population ranked by the OECD as the hardest working in the world in terms of annual hours worked. It’s no surprise that many overseas entrepreneurs choose to set up a new business in Mexico.
If you’re thinking of moving to Mexico to start a new enterprise, then you’ll need to know a few basics to get started. Read this guide to help you on your way.
What types of corporate entities are there in Mexico?
There are several different options when it comes to establishing your business in Mexico. With very few exceptions, all of these corporate structures can be used by foreigners as well as Mexican citizens:
- Sole trader
- Limited liability stock corporation (S.A, or S.A. de C.V)
- Limited liability corporation (S. De R.L.)
- Partnership (general SNC or limited SCS)
- Branch of an already established business
As a sole trader you take on all the liability of your business personally. You must register your activities for tax purposes, as a ‘persona física con actividad empresarial’.
The S.A. structure is like a public limited company, with fixed capital. If you want this structure but with variable capital, then the S.A de C.V offers this option. This is a common choice for entrepreneurs coming to Mexico to start a business. There’s a minimum capital requirement but this doesn’t have to all be paid initially, and shareholder liability is capped at the amount they invest.