January 14, 2025
REGISTRATION OF LIMITED LIABILITY COMPANY (“LLC”) IN MEXICO
UNDERSTANDING THE LLC STRUCTURE IN MEXICO
Small to medium-sized firms in Mexico can benefit from a Limited Liability Company (“LLC”). A maximum of fifty partners are permitted, and each partner’s liability is limited to the amount of money they have contributed. The benefits of operational freedom and minimal liability are combined in this structure.
BENEFIT OF HAVING A COMPANY IN MEXICO
There are several benefits that foreigners stand to gain with Mexico company formation. They include but are not limited to the things mentioned below:
- Efficient registration process – Though the incorporation process is detailed, it is straightforward. Thus, it is possible to complete everything and have a fully functional company in less than three weeks.
- No minimum capital requirement – There is no actual capital requirement for incorporation in Mexico. However, companies normally declare $3,000 as the capital value at the time of incorporation.
- Free market – There are no limitations to what markets foreigners can do business in Mexico. They are free to join and operate in any industry.
- No withholding tax on dividends – Foreign dividends don’t attract any withholding tax in Mexico. Well, it is the government’s way of encouraging more foreign investment in the country.
- No controls on imports and exports – In Mexico, the government doesn’t impose any controls on exports and imports by foreigners on goods or services.
REQUIREMENT FOR LLC REGISTRATION
The following is required in order to register an LLC in Mexico:
Minimum Number of Partners – Two partners are needed at the very least.
Capital Contribution – The partners must make at least a little contribution, although there is no minimum capital needed.
Name Reservation – The Ministry of Economy (Secretaría de Economía) must authorize the company’s name and it must be unique. The company’s goals, organizational structure, and operating procedures are outlined in the articles of incorporation.
Attorney – It is required to have an attorney who has a Mexican taxpayer identity number.
Registered Location – A physical location in Mexico is required of the business.
Taxpayer Identification Numbers – A Taxpayer Identification Number is required for each partner.
STEP-BY-STEP PROCESS FOR REGISTERING AN LLC
- Choose and Reserve a Company Name – Conduct a name search with the Ministry of Economy to ensure the name is available. Reserve the name online or through the relevant local office.
- Draft the Articles of Incorporation- Work with a licensed Mexican notary public to prepare the Articles of Incorporation.
Specify details such as:
Name and purpose of the company
Names and contributions of the partners
Management structure
Distribution of profits and losses
- Register with the Public Registry of Commerce (“Registro Público de Comercio”)
The Articles of Incorporation must be signed before a notary public.
Submit the notarized document to the Public Registry of Commerce.
- Obtain the Taxpayer Identification Number
Register the company with the Mexican Tax Authority to obtain an Tax Identification Number.
This step requires providing proof of the company’s legal formation and registered address.
- Open a Corporate Bank Account
Choose a Mexican bank to open a corporate account.
Provide the Articles of Incorporation, RFC, and proof of address.
BUSINESS LANDSCAPE IN MEXICO
- The government’s decisive reforms, Mexican Gross Domestic Product (“GDP”) achieved a historic milestone of $1.41 trillion in 2022, securing its place as the second-largest economy in Latin America and 15th largest globally.
- Embracing digitalization and innovation, especially regarding Mexico’s AI industry, has propelled Mexico to third place in Latin America.
- In fact, it’s named the second-largest technology market in Latin America, with a whopping valuation of $28 billion. Focusing on Mexico’s fintech, AI, 5G, blockchain, and cybersecurity, it is forecasted to grow at a Compound General Growth Rate (“CAGR”) of 10.6% over the next year.
CONCLUSION
Establishing a LLC in Mexico presents numerous advantages for small to medium-sized firms and foreign investors, including operational freedom, minimal liability, no minimum capital requirement, and a streamlined registration process. Mexico’s open market policies, absence of withholding tax on foreign dividends, and lack of import/export controls make it an attractive destination for business. The efficient incorporation process, coupled with the country’s strong economic performance, digital innovation, and thriving technology sector, positions Mexico as a promising hub for business growth and investment.
HOW WE CAN HELP?
- We provide comprehensive support throughout the LLC registration process in Maxico ensuring compliance with all regulations.
- We assist in preparing essential documents and the company seal, ensuring they meet all requirements for incorporation submission for the respective obligations.
- We offer services to help you open a corporate bank account, obtain necessary business licenses, and register for taxes, ensuring your LLC is fully operational.
For more information or queries, please email us at
[email protected]
Key Contact
Surendra Singh Chandrawat
Managing Partner
