Now, we know that due to the COVID-19 pandemic there has been far reduced international trade and business in general, meaning the attraction of operating a business across numerous continents was also lessened. However, with the introduction of vaccination programs and the lifting of long lockdowns on the horizons in many countries, there is also a dawn of opportunity. As we so often say, Latin America is presenting itself to the world as an innovating powerhouse in various sectors, and Mexico is no exception, in fact, in many respects it is one of the leaders for the rest of the region, and with more businesses beginning operations overseas, could it be the ideal location to open a branch of your corporation?
With a GDP of US$1242 billion and a trade volume value of US$760 billion, Mexico is clearly an economic hub in the region, and it is no coincidence that 84% of this trade is with the United States. This is not to say that if your business operates outside of the US you will find no success in Mexico, in fact it is quite the contrary. Having a geographical advantage in terms of proximity with North and South American countries, as well as strong links with Europe, Mexico is perfect for a branch of your company as projects undertaken there have greater potential to gain traction and publicity across borders and maximise your potential to establish further branches in the future!
Now we have the possible advantages out of the way, you may find yourself wondering how you can actually set up the branch. These are the steps:
1. Obtain a Federal Taxpayer Registration Number and get electronic signature for the Tax Administration Service.
o The time between application and legalisation is around 45 days.
2. Register with the National Registry of Foreign Investment and Economy Secretariat
o The Secretariat decides the success of the application (this takes up to 90 days).
3. Similar to the article we made on a fiscal address in Argentina, establishing a branch in Mexico requires a Mexican address, so you will need one of these.
4. If you are approved, you then get a foreign legal entity where you can work at the address given above.
5. Lastly you must nominate a power of attorney.
If your application is successful and you can operate in Mexico with a new branch of your business, the opportunities seem to be endless, however, if the process seems daunting and you want any further advice, do not hesitate to contact us. At Creimerman, we are here to support you on every step of your journey in expanding your business overseas, providing knowledge and advice in order to make the process as stress-free as possible for you.