The ins and outs of setting up a business in Mexico
- Written by: News Company
While registering a business in Mexico can be tricky, it is relatively simple compared to some other Latin American countries. “Foreign investment in Mexico reached around 30 billion dollars in 2017. As the Mexican government realizes the benefits of foreigners setting up businesses in the country, they are continually working to minimize the bureaucracy and paperwork involved in incorporating a company,” says Santaigo Fernandez from Reviewbox. Nevertheless, foreigners wishing to register a company in Mexico still have to comply with the country’s regulations. Here are a few things to consider before getting started.
Location
Mexico is a vast country, and different regions may have different regulations and costs associated with the process of incorporating a company. As such, it is best to consult a business or a legal advisor before getting started. If you are an American citizen, the US Commercial Service can help you find a qualified professional who will be able to navigate the cultural differences inherent in setting up a business in a foreign country.
Entity type
Foreign investors in Mexico can opt for one of four types of companies: limited liability company, partnership enterprise, joint venture and representative office. All have their pros and cons. A limited liability company is controlled entirely by the investor. However, a government approval might be required for setting up a limited liability company in some industries. A joint venture requires the investor to partner with a Mexican citizen to start a business. A partnership enterprise is a contract between one or more individuals stating that they will conduct a business. Finally, foreigners can set up a representative office in Mexico. While this is the easiest and most inexpensive way of setting up a business in the country, it prevents many operations such as signing of contracts.
Documentation
Foreign investors may need to file different documents depending on their industry type and where in Mexico they are registering their business. Some of the most common documents required include: passport copy, bank reference letters, resume and photo, business description, lease contracts in Mexico, business license and certificate of incorporation.
Corruption
Over the years, Mexico has implemented a number of initiatives, such as one-stop-shops, to simplify the process of starting a business in the country. Mexico’s close economic ties with the United States and Canada have also increased the level of investment between these countries. Nevertheless, Mexico’s high level of corruption is something that has to be taken into account before registering a company.
