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The most successful Formation of a Foreign Company in Mexico

Mexico is today one of the countries par excellence with enormous growth potential given the solid economic environment in which it finds itself, characterized by the stability of inflation, high international reserves and the growing exporter of manufactured goods.

A clear example of this is the projection of the Accenture firm, which indicates that by 2025 Mexico will be the economy number 6 worldwide. Furthermore, Goldman Sachs projects, by 2050, that Mexico will be the world's largest economy by the value of its Gross Domestic Product (GDP), only behind China, the United States, India and Brazil; for its part, HSBC estimates that it will also be the eighth world economy in 2050.

We should not overlook that this country has one of the most open economies in the world, having privileged access to 45 nations as a result of its large number of international treaties.

It is integrated into North America and, therefore, is part of the NAFTA Region, which is the largest free trade area in the world, where approximately a quarter of world GDP is generated.

Added to this advantage, on the one hand, is the contribution of highly trained human capital and, on the other hand, the productive and competitive sectors, such as the automotive and auto parts, aerospace, the agri-food sector, electronics-electrical appliances, medical devices, energy, creative industries, mining, medical tourism, tourism and financial services.

The above indicates that Mexico is a country on the way to becoming a world-class power and, therefore, is a very attractive destination for investment.

To start investing, we recommend the creation of a company, having as advantages the possibility of qualifying as a credit subject, issuing tax receipts, and interacting without restrictions with other companies and clients.

There are currently 7 (seven) legal forms of mercantile companies in Mexico and, to create a company, you must decide which of them is the one that best suits your interests, preferring to obtain advice that suits your needs.

1. Simple limited partnership

2. Limited Company by Shares

3. Limited liability company

4. Limited Company

5. Cooperative society

6. Society in the collective name

7. Simplified joint-stock company

Then, as a first step before starting the activity, you must have defined whether you will act as a natural person or as a legal person, taking into account whether you will work on your own or in association with other people.

If you are starting your business alone, it is recommended that you do so as a natural person. This way you will avoid, among others, the bureaucratic procedures and costs of setting up a company, in addition to being the only legal representative and owner of the company.

If you decide to undertake with several partners, you will only have the possibility of doing so as a legal entity, having to submit accounts to the SAT monthly, and adjusting to two possible tax regimes, that is, the general regime and for non-profit purposes.

With this last option, you need:

1. Permit for company incorporation, a procedure that must be carried out before the Ministry of Foreign Affairs. There the name of at least 5 (five) people will be proposed to opt for the approval of the company. It can be a letter provided by the SRE, indicating the information corresponding to the company and the legal regime requested.

2. The Constitutive Act before a notary once the Company's Incorporation Permit has been obtained and its approved by the SRE. This act will include the fundamental aspects of the company: Type, company name, positions, shareholders, among others.

In the second point, legal assistance is essential for the drafting of the minutes according to your interests and needs, and also to coordinate the signature with the notary.

3. The Federal Register of Taxpayers of the SAT, for the registration of the commercial company.

For this purpose, legal persons must present:

I. The R-1 registration form in duplicate and its respective annexes (Annex 1: legal persons of the general and non-profit regime; Annex 2: people simplified moral regime and its member’s legal persons and persons physical; Annex 8: IEPS, ISAN, ISIUV).

II. Original articles of incorporation or certified copy.

III. Original and copy of proof of tax address.

IV. Original and copy of Identification of the Legal Representative (credential of voter, passport or identity card).

V. Unique Population Registration Code (CURP)

But, for the registration of natural persons, this step is also included and must be submitted:

I. The registration form in duplicate;

II. The birth certificate or certified copy, and

III. Certified copy of the card or passport.

It is important to mention that to collect the R.F.C. necessary also present proof of address.

Once this procedure is completed, you will have the tax identification card or RFC of your company. And with this you can open a bank account, issue and receive invoices as a company and, ultimately, the activities of any company.

4. The Notary Notice, a procedure carried out by the Notary or Public Broker and consists of notifying the SRE that the previously processed permit has already been used.

5. Registration of the company and its assets in the Public Registry of Property and Commerce.

6. The application for land use before the municipality, where you will receive a unique zoning certificate, that is, a public document that indicates the intended use or destination of a property or premises, as well as the type of land use that you have, allowed, conditioned or prohibited to use.

7. Registration with the IMSS and INFONATI, a mandatory requirement, regardless of whether or not your company has employees in charge.

In this process you register as a Boss, and later you must register the workers of the company.

Once the process is completed, 15 days after registration, workers will be able to enjoy the medical services of the IMSS.

Other requirements:

Depending on the type of company you decide to choose, you should consider managing the following procedures:

a. Registration with the Ministry of Health.

b. Registration of manifests and industrial designs before the Mexican Institute of Industrial Property (IMPI).

This is where you will register your trademark to prevent someone else from appropriating it.

The brand is the name or symbol with which you are going to market your products or services in the market. Your company can legally operate without a trade name or brand, that is, the trade name and brand are part of the Marketing of your company or business.

There are 7 (seven) types of trademarks, but the 3 (three) most common are nominative, figurative and mixed brands.

c. Trademark Use Licenses.

d. Advanced electronic signature.

e. In the case of imports, Registration in the Importer’s Registry.

f. Registration with the Mexican Institute of Intellectual Property.

g. Registration in the Joint Commission for Safety and Hygiene before the Ministry of Labor, where the different accidents to which workers may be exposed and the measures to prevent them are proposed.

h. Registration of the Joint Training and Training Commission with the Secretariat, to supervise the training of employees according to their needs.

It seems that the process is extensive and requires too much documentation, but with the proper advice, it is undoubted that, once all the steps have been completed, you will be able to proceed to take advantage of all the benefits that the establishment of a company in this country entails from the beginning.



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