Overview of Mexico's investment environment
Mexico is Latin America's second-largest economy and a member of the North American Free Trade Agreement (USMCA), boasting a massive market of 130 million people. With its advantageous geographical location, well-developed manufacturing infrastructure, and open investment policies, Mexico has become a key gateway for Chinese companies to enter the North American market.
主要优势
- Strategic location: adjacent to the US market, an ideal platform for entering North America
- Trade Agreement Network: 14 free trade agreements signed with over 50 countries, covering 60% of global GDP
- Strong manufacturing base: well-developed industrial clusters such as automobiles, electronics, and aviation
- Labor cost advantage: compared with the United States and Canada, labor cost competitiveness is strong
- Improved investment protection: signed investment protection agreements with multiple countries to safeguard the rights and interests of foreign investors
China-Mexico economic and trade relations
China is Mexico's second-largest trading partner, and Mexico is China's second-largest trading partner in Latin America. In recent years, an increasing number of Chinese companies have chosen to establish production bases in Mexico, leveraging the USMCA to enter the North American market. These companies are engaged in a variety of industries, including automotive parts, home appliances, and textiles.
Comparison of Company Types
Mexico offers a variety of corporate forms for foreign investors. Depending on your business needs and the size of your investment, we recommend choosing the most suitable type of company:
| Compare Projects | Simplified Stock Corporation (SAS) | Joint Stock Company (SA) | Limited Liability Company (S. de RL) |
|---|---|---|---|
| Minimum number of shareholders | 1 person | 2 people | 2-50 people |
| Registered capital | No minimum requirement | 50,000 pesos | 3,000 pesos |
| Establishment time | 1-3 days (online) | 5-10 days | 5-10 days |
| Establishment costs | Minimum (no notarization required) | Medium | Medium |
| Annual income limit | 5 million pesos | No restrictions | No restrictions |
| Recommendations | Small and medium-sized enterprises and start-ups | Large enterprises and listed companies | Medium-sized enterprises and family businesses |
Recommendations
For Chinese investors entering the Mexican market for the first time, the SAS (Simplified Stock Corporation) is an ideal option. It can be quickly registered online at a low cost. As the business grows, it can be converted to a SA. For large-scale investment projects or companies planning to go public, the SA form is recommended.
Registration requirements
Basic Requirements
- Shareholder identity: natural persons or legal persons are both acceptable. There are no special restrictions for foreign investors (except in certain industries).
- Legal representative: must be a Mexican resident or a foreigner with a work permit
- Registered address: must have a physical office address in Mexico
- Company name: a name query is required to ensure uniqueness
- Business scope: most industries are open to foreign investment, with restrictions on a few strategic industries
Required documents
Foreign investors need to prepare the following documents to establish a Mexican company:
- Shareholder identification (passport or company registration certificate)
- Shareholder address proof (within the last 3 months)
- Power of attorney (if entrusting an agent to handle the matter)
- Draft Articles of Association
- Description of investment plan (required for specific industries)
Note:All foreign documents must be notarized by a notary public in the country of origin and legalized or apostille by the Mexican Consulate. Chinese documents typically require notarization, legalization by the Ministry of Foreign Affairs, and authentication by the Mexican Consulate.
Registration Process
Company name search (1 day)
Check and reserve your company name on the Ministry of Economic Affairs website
Prepare registration documents (2-3 days)
Preparation of all required documents, including certification and translation
Drafting of company articles (1 day)
Lawyers drafting company articles of incorporation in accordance with Mexican law
Notarization or online registration (1-2 days)
SAS can be registered online, other types need to be handled by a notary office
Business registration (1 day)
Complete registration with the Public Commercial Register
Tax ID application (1-2 days)
Apply for an RFC tax number from the Tax Administration (SAT)
Time and cost
Registration Time
- SAS Simplified Joint Stock Company: 1-3 working days (online registration)
- SA Joint Stock Company: 5-10 working days
- S. de RL Limited Liability Company: 5-10 working days
Cost Structure
The registration fees for a Mexican company mainly include:
- Government fees: SAS free, other types about $500-1,500
- Notarization fee: approximately US$1,000-2,500 (not required for SAS)
- Certified translation fee: approximately US$200-500 per document
- Attorney fees: are determined based on the scope of services and company type
Cost optimization recommendations
Choosing the SAS format significantly reduces initial incorporation costs, eliminating notarization fees and allowing free registration through the Ministry of Economic Affairs' online system. Lawshi Lawyers offers one-stop services, including document preparation, translation and certification, and registration support throughout the entire process.
Post-registration matters
After the company is successfully registered, the following important matters need to be completed:
1. Open a bank account
- Choosing the right Mexican commercial bank
- 提供公司注册文件Provide company registration documents, RFC tax number
- The legal representative must be present in person
- Initial deposit requirements vary by bank
2. Obtain necessary permits
- Foreign Investment Registration (Registro Nacional de Inversiones Extranjeras)
- Import and export license (if trade is involved)
- Industry-specific licenses (manufacturing, pharmaceuticals, etc.)
- Municipal business permit
3. Labor and social security registration
- Register with the IMSS (Social Security Agency)
- Register with INFONAVIT (housing fund)
- Developing employment contracts that comply with Mexican labor laws
- Employee Profit Sharing Plan (PTU) Preparation
Taxation Points
Main taxes
- Corporate Income Tax (ISR): 30%
- Value Added Tax (IVA): 16% (8% in border regions)
- Payroll tax: 2-3% (varies by state)
- Employee Profit Sharing (PTU): 10% of pre-tax profit
Tax incentives
Mexico offers tax incentives to specific industries and regions:
- IMMEX program: manufacturing and export companies can temporarily import raw materials duty-free
- Northern border region: corporate income tax 20%, VAT 8%
- R&D investment: 30% tax credit available
- Energy industry: certain clean energy projects enjoy preferential policies
Compliance points
Mexico's tax system is complex, with strict monthly reporting requirements. It's recommended to hire a local accountant to handle your daily tax affairs and ensure compliance. Lawshi Lawyers can help you establish a comprehensive tax compliance system and optimize your tax structure.