The common forms of business entities in Mexico are:

• The Mexico Limited Liability Company (Sociedad de responsabilidad limitada)
• The Mexico Export Processing Zone Company (Maquiladora company)
• The Mexican Stock Corporation (Sociedad Anonyma)
• Branch Office
• Representative Office

General Formation: (quoted from here)

• These are the general steps for forming a company in Mexico:
  • Name permit: A permit from the Ministry of Economy must be secured to incorporate a Mexican entity (can be filed electronically)
  • Articles of incorporation: The partners or shareholders must execute a public instrument formalising the company’s articles of incorporation before a Mexican notary public or public broker. The founding partners or shareholders can grant powers of attorney to a Mexicon resident for that purpose. The company exists from the date of execution of the public instrument
  • By-laws: The articles of incorporation and bye-laws can be included in the same set of documents or be drafted separately. The main difference between them is that articles of incorporation contain the essential clauses for the creation of the company (that is, name, duration, domicile and share capital) and the bye-laws contain additional specific provisions relating to the structure and organisation of the entity
  • Initial resolutions: On incorporation, the shareholders or partners must adopt resolutions approving the initial issuance of shares, appointing the managers, officers and examiner (if applicable) and granting powers of attorney. These resolutions are normally included in the public instrument containing the articles of incorporation.
  • Registration with the Public Registry of Commerce: Once executed and issued, the public instrument must be filed with the Public Registry of Commerce.
  • Other registrations: The newly formed company must be registered as a federal taxpayer and with any relevant state tax offices. Additionally, a company that hires employees must register as an employer before the Mexican Social Security Institute. If foreign investors participate in the capital of the new company, the company must file for registration with the Foreign Investment Registry. Other registrations and authorisations may be required on a case-by-case basis (for example, registration for the IMMEX (maquila) programme, and importers or exporters registration).

The Mexico Limited Liability Company (Sociedad de responsabilidad limitada) (source)

• Only two shareholders and one director are needed for this company (all can be foreigners)
• While the shareholders and directors can reside outside of mexico, one individual, known as the legal representative, ordinarily residing in the country must be appointed to liaise with the authorities
• There is no legal minimum capital requirement but it is recommended that at least an amount of MXN 3,000 be contributed. 50% of the capital must be paid-up at incorporation of the Mexico company
• After the business is set up all financial statements must be submitted

The Mexico Export Processing Zone Company (Maquiladora company) (source)

• Mexican export processing zones are not geographically located, although most EPZ are clsoe to the US frontier
• To qualify as a Maquiladora company, a company must export US$500,000 or 10% of their annual sales
• To become a Maquiladora, a company must apply to the IMMEX program regulated by the Mexican Ministry of Economy
• Benefits include exemption from custom duties and VAT
• In most cases the company has to pay a corporate income tax
• In order to upkeep this status, the company must submit an annual report on their export operations

The Mexican Stock Corporation (Sociedad Anonyma) (source)

• Typically incorporated with a minimum share capital of MXN50,000 of which 20% must be paid-up when the corporation is incorporated

Branch Office (source)

• The General Mercantile Corporations Law allows foreign companies to register a branch in mexico
• In order for the the General Foreign Department of the Ministry of Economy to grant approval, a legal representative that ordinarily resides in the country must be appointed -The branch is allowed to sign contracts with local suppliers as well as invoice and receive income from local customers

Representative Office (source)

• A Mexico representative office is only permitted to engage in non-commercial activities including promotion of the parent company and market research

Non-profit Making Organizations Overview (source)

• Overview
  • Charitable organisations in Mexico are typically incorporated as a civil association (Asociación Civil) in accordance with local and federal civil codes
  • An AC is generally understood to be an association of individuals with common objectives not forbidden by law, who do not have a preponderant economic interest
  • The AC was included in the Federal Civil Code of 1928
• Incorporation
  • In AC is incorporated before a notary public and must be registered with the Public Real Estate Property Office (Registro Público de la Propiedad y del Comercio). In order to do so, the following must be in place:
  • At least two legal or moral persons for incorporation
  • Authorisation for the use of the association’s name by the Ministry of Economy
  • A draft of the articles of incorporation, including details of powers of attorney and the board of directors
  • Once incorporated, the AC must obtain the Taxpayer Id Number before the Tax Service Administration (Servicio de Administración Tributaria) (SAT), along with the tax electronic signature and the electronic password for entering the tax authority’s digital services

Further Details

• More information on the different types of companies in Mexico found here

Sources

• Healy Consultants
• UK Practical Law