Starting Business In Mexico. Many Mexican-based professionals have received all kinds of questions regarding exactly how to start a business in the country. According to a study conducted several years ago in the United States, approximately a third of hopeful expats stated that their main motivation for moving to another country was starting a new business.
Starting your own business in Mexico is a process that not easy, but it also isn’t difficult. In fact, according to the most recent ranking of a total of 190 nations on starting a new business by The World Bank Group. Mexico ranked 93; however, the country did a much better job in terms of the Ease of Doing Business, ranking 47.
Here is the process involved with starting a new business in Mexico.
- Selecting a Company Name
First, you need to gain authorization from the Department for Trade in order for your company name to be used. This is something that can be done either online or through a notary public who will be able to fill out all of the necessary forms and obtain the company name. Generally, a total of five names are submitted in your order of preference.
- Drawing a Deed of Incorporation
This step involves selecting a notary public to draw up the business entity deed. Specific business entities can go through a Corredor Publico to assist with formation. You can choose between a regular corporation or a regular general corporation or company. Additionally, there are other entity forms that are much more sophisticated for both investors and investments. The deed must then be signed with a notary present and also requires the presence of all entity owners mentioned in the deed, proper identification documents, and proof of address. Additionally, you will also need to know the names of whomever has power of attorney and determine how many shares each partner will have.
- Registering Your Business Address
This step involves obtaining a registered address for the business. This is where you will be able to receive notifications if a government agency requires something from you.
- Registering for Tax Purposes
This is something that must be done via the Mexican Tax Authorities, or SAT. This can be done at any local SAT office once you have completed online preregistration. You will be required to bring a majority of the same original documents that you provided to your notary, as well as a certified copy of the deed pending registration and a letter from the notary that states that the deed registration itself is in process.
- Businesses That Are Open to the Public
If your business happens to fall under this category, your local government will need to be notified regarding the opening of the business, and you also will need to obtain a municipal business license, as well as any federal and state licenses that may apply depending on the specific types of business activities.
- Register Employees
If you will have employees at your business, the business will first need to be registered with the Mexican Social Security Institute, or IMMS, and the National Worker’s Housing Fund, or INFONAVIT. You also will need to register with your local state tax office as well.
- Registering with the SIEM
The next step is to register with the SIEM, or the National Business Information Registry. This is an entity that is operated by the Department of Trade.
- Foreign Investment Registry
Finally, if one or more business owners is a foreign national who doesn’t possess permanent resident status, you will also need to register the business with the Foreign Investment Registry. This is a process that must be completed in person within 40 working days of business incorporation by an individual who has been designated in the deed as having power of attorney. You will be required to fill out and submit a form, as well as include a copy of the deed and all proper identification documents of the individual who is completing the registration.