Mexico Company Formations - SA / Srl Company

In Mexico there are different types of commercial entities that can be incorporated. The Sociedad de Responsabilidad Limitada has fixed capital stock and the Sociedad de Responsabilidad Limitada de Capital Variable has a combination of both fixed and variable capital stock. The Sociedad de Responsabilidad Limitada de Capital Variable is more common since the variable part of the capital stock is allowed to be withdrawn with notice from the shareholders.

Mexico Company Incorporation

In order to incorporate a company in Mexico the incorporation documents are signed in a deed before a notary public it is a requirement that the partners and/or its legal representatives attend the notary public office in Mexico. If the partners are unable to attend it is possible to grant a power of attorney and instruct this person to sign in representation of the partner.

  • Reserving your Company Name
  • Incorporation fees including notarial work
  • Obtain the authorisation of company name from the Ministry of Economy
  • Register the Deed in the Public Register of Commerce
  • Register with the Mexican Social Security Institute
  • Register with the local Tax administration for payroll tax
  • Notice of opening a mercantile establishment before local government
  • Register with the Registro Público de Comercio
  • File a notice with the national institute of statistics, geography and information (Instituto National de Estadistica, Geografia e Informática)
  • Certificate of Incorporation
  • Issue of shares and production of Share Certificates
  • All documents and certificates supplied in a professional folder
  • Delivery of documents by FedEx / DHL courier

There may be additional fees for work the notary has to do in drafting the public deed and other procedures.

Mexico Company Registration

The most common forms of Corporation chosen by foreign investors in Mexico are:

  • Variable Capital Corporations - Sociedad Anonima de Capital Variable S.A. de C.V.

Main characteristics of each corporation:

Limited Liability Stock Corporation - Sociedad Anónima - S.A

A Sociedad Anónima must have at least two shareholders. The minimum fixed capital needed to establish a Sociedad Anónima is $50,000 pesos.

For the option of variable capital, an S.A. de C.V. can be established with both fixed and variable portions of capital as long as the total never falls below $50,000 pesos.

Sociedad Anonima de Capital Variable - S.A. de C.V. - Variable Capital Corporation

The maximum capital amount for a S.A. is fixed and specified in the articles of incorporation. Any subsequent increase or capital decrease requires modification of the public document or bylaws.

The public document and bylaws of a S.A. de C.V. show minimal capital and variable capital amounts that exceed the minimal capital. The variable capital can be unlimited, and with increases and decreases in capital it is not necessary to modify the public document or bylaws of the organisation. For this reason foreign investors, particularly those who possess their own subsidiaries, use the S.A. de C.V. figure instead of the S.A..

Limited Liability Company - Sociedad de Responsabilidad Limitada, S.R.L.

A sociedad de responsabilidad limitada is similar to a limited company in the United Kingdom.

  • The minimum capital is only $3,000.00 pesos - 50% must be paid at the time of incorporation
  • Minimum of 2 shareholders required, maximum of 50
  • The shares in the company must not be freely transferable and cannot be traded publicly

Sociedad Anónima - S.A. - Corporation

  • The capital stock is divided into shares and the shareholders are liable only to the extent of their contributions
  • This corporation may exist under any kind of name, followed by the words, Sociedad Anónima, or the abbreviation S.A.
  • It must be incorporated by at least 2 shareholders, a minimum capital investment of $50,000 pesos, and at least one share of stock should be purchased by each shareholder
  • The Corporations constitution will be a public document
  • The Corporations' capital is represented by stocks
  • The stocks will have equal value and will confer equal rights - Each stock gives the right to one vote in the decisions made by the assembly
  • The distribution of profits and capital will be made in proportion to the value of each stock

Company Name

You will need to select a company name which we will reserve for you at the Registration Office, they will check that no identical name or one that might lend to confusion is already registered.

Proforma Agreement

Under Mexican Law, your company will have to enter a proforma agreement, whereby any non-Mexican shareholder shall be deemed to agree to be bound by Mexican laws and not invoke the diplomatic protection of his government.

Company Statutes

We prepare these documents that spell out corporate governance, corporate purpose, duration of existence, domicile, capital stock provisions, management powers and special provisions for liquidation.

In addition, you will need to decide how capital will be subscribed, how the Board of Directors and officers will be appointed and what powers will be specifically granted to individuals.

The statutes must be taken along with the permit from the Registration Office to a notary (notario publico) to formalise the incorporation and takes around 3 weeks.

Commercial Register

After the notary issues a notarial transcript, he usually handles registration with the Public Registry of Commerce (Registro Público de Comercio).

Tax Registration

Immediately after incorporation, you must register the company with the Federal Taxpayer’s Registry (Registro Federal de Contribuyentes, RFC) at the Secretariat of Finance and Public Credit (Secretaría de Hacienda y Crédito Público, Hacienda).

Foreign Investment Register

Registration with the Foreign Investment Registry (Registro Nacional de Inversiones Extranjeras), who will need information about the shareholders, domicile and company directors.

Additional Required Registrations

The corresponding Chamber of Commerce or Industry for your business. Under Mexican law, every company must belong to one of these chambers.

  • Mexican Institute of Social Security (Instituto Mexicano del Seguro Social, IMSS)
  • Employee Housing Institute (Instituto Nacional del Fondo de la Vivienda para los Trabajadores INFONAVIT)
  • Retirement Insurance Fund (Sistema de Ahorro para el Retiro, SAR)
  • National Institute of Statistics, Geography and Information (Instituto Nacional de Estadística, Geografía e Infomática, INEGI)

Corporate Administration

The highest authority of this Corporation is the General Shareholders Assembly. The administration will be managed by one or several temporary and revocable executives, who may or may not be partners. If only one administrator is chosen, he will be designated as the General Manager, if two or more administrators are appointed an Administrative Board will exist, which may include a President and Counselors if necessary.

Shareholder Assemblies

The general shareholders assembly is the supreme authority of the organisation. The assembly is responsible for the debate and ratification of all acts, operations, and resolutions. The chairperson, administrator, or administration board will fulfil the wishes of the assembly.

The assemblies will meet at least once a year, within four months following the end of the reporting period, and will address the following matters:

  • Approve/modify the annual report of administrators and delegates
  • Elect an administrator or administration board and delegates

Extraordinary assemblies are those which deal with the following:

  • Increase or reduce the organisations capital
  • Extension of the continuance of the organisation
  • Anticipated dissolution of the organisation
  • Merger with other companies
  • Any other modification of the organisations contract

The assemblies will be able to meet at any time, summoned by the administrators, administration board, or delegates. However, the associates that represent at least thirty-three percent of the organisations capital may request, in writing to the managers, to call a general shareholders assembly.

In order to consider an ordinary assembly legally gathered, there must be at least half of the organisations capital represented by shareholders, and their resolutions will be valid when the majority of the participants approve them.

Sociedad Anónima

Mexico's General Corporations Act (Ley General de Sociedades Mercantiles) requests for a minimum of at least two shareholders to form any type of legal entity. Each initial shareholder or incorporator has to subscribe at least one stock certificate, and must appear before a Mexican Notary Public to sign the incorporation deed in the Notary's Protocol Book.

The incorporation deed (acta constitutive) will comprise both the articles of incorporation as well as the corporate bylaws, and will therefore provide specific regulation for governance of the company, management, profit distribution, shareholder voting and preference rights, etc.

The incorporation deed will necessarily have to provide for an immediate form of management: either a Sole Administrator (administrador nico) or a Board of Directors (Consejo de Administración) with a minimum of three people to act as President, Secretary and Treasurer. The incorporator may be able to fill these roles temporarily, or be appointed as a sole administrator instead.

The sociedad anónima requires for duly appointed Comptroller (comisario) which will permanently oversee and guarantee that all corporate duties are met during the course of life of the company.

A decision must also be made addressing which members of the Board of Directors will be the legal representatives of the corporation (normally at least the President is appointed as such). The legal representatives will then be granted a full power of attorney to act on behalf of the company, with the possibility of limiting such power of attorney for operations not to exceed a certain amount, or in regard to certain specific tasks (i.e. one may require the joint action of two of the representatives for some actions or for transactions of more than a certain amount).

A name must also be chosen and this must not be similar to any existing corporate name registered with the Ministry of Economy (Secretaría de Relaciones Exteriores). A corporate name search must be performed previously in order to verify that there is no similar name already registered and that the incorporation process will be granted.

Finally, the company capital must be determined at the time of incorporation, we suggest fifty thousand pesos as well as the number of shares of stock. Since individual shares cannot be divided, the number must be big enough to allow for any transfer or distribution of shares you may encounter in the future.

To begin the incorporation process you will need the following information:

  • Specify a broad general purpose for the company
  • Place of business
  • Capital stock
  • Initial contributions or capital stock for each shareholder
  • Form of management, sole administrator or board of directors
  • Appointing a comptroller (comisario) who will be in charge of overseeing that all corporate obligations are met.
  • General information including: 1) name; 2) place of birth; 3) date of birth; 4) marital status; 5) place of residence; 6) TIN number (tax identification number); and 7) a copy of each member's ID.

Obtaining a corporation incorporated in Mexico does not necessarily mean that the shareholders have to travel there - Shareholders have two options:

  • Each shareholder appearing directly and personally before the Notary to form the sociedad anónima, the shareholders would have to get a business entry form or permit (FM3) to be able to conduct a legal transaction while in Mexico (by signing the corporate deed). This could slow down the incorporation process somehow and will add costs for the incorporation. Until all permits for the shareholders have been secured that the Notary will allow execution (signing) of the corporate deed (acta constitutiva);
  • Incorporating the company under your names but through us. You could appoint us as your agent for each shareholder. Each shareholder would grant a formal power of attorney to specifically incorporate a company and contribute a fixed percentage of the capital stock.

The Incorporation Process

The incorporation process in general carries the following necessary steps:

  • Drafting and execution of the articles of incorporation and corporate bylaws in Spanish language (acta constitutiva).
  • Filing for corporate name search and name and company registration before the Ministry of Economy
  • Preparation and execution of articles of incorporation and corporate bylaws before a Notary Public.
  • Filing of company activities before the Federal Revenue Office (Hacienda).
  • Filing of the acta constitutiva before the City's Public Registry of Property and Commerce.
  • Obtain the authorisation of using the company name from the Ministry of Economy
  • Sign the deed of incorporation before a notary public and obtain tax registration number
  • Register the deed in the Public Register of Commerce.
  • Register with the Mexican Social Security Institute (IMSS).
  • Register with the local tax administration - Secretaría de Finanzas del Gobierno del Distrito Federal for payroll tax
  • Notice of opening a mercantile establishment before local government
  • Register with the National Business Information Registry (Sistema de Information Empresarial - SIEM).
  • File a notice with the National Institute of Statistics, Geography and Information - INEGI

Mexico Ready Made Company

Unfortunately, ready made companies are not available in Mexico.

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Mexico Advantages
  • Time - only 2-3 weeks to incorporate your company
  • Cost - a Mexican company will cost £3800
  • Directors - only one director, of any nationality, is necessary for your company
  • Shareholders -  two shareholders, of any nationality, are required
  • Share Capital - the share capital requirement is only €3,080
  • Support - using our 20 years experience we guide you throughout every step of the company formation process