What are the Legal Structures for a Company in Mexico ?
Establishing a subsidiary in Mexico is one way to enter the Mexican market. The process requires time, money, interaction and communication as well as travel to Mexico.
In Mexico, various legal forms can be chosen for incorporation. The following are often chosen:
- Sociedad Anonima (S.A.): This is a legal form often used that is like a corporation. At least two partners are required to set up the company; these can be natural persons or legal entities. They are liable for the amount of their contribution. There is no legally prescribed minimum capital.
- Sociedad de Responsabilidad Limitada (S. de R.L.): This corresponds to the Limited Liability Company. In Mexico, at least two partners are required to form an S. de R.L. and it is limited to a maximum of 50. A minimum share capital is not required. However, the consent of all or the majority of the shareholders is required here if new shareholders are admitted or shares are transferred.
- Sociedad por Acciones Simplificada, S.A.S.: The Simplified Public Limited Company has been in existence since 2016; it was founded using articles of association and entry in the commercial register. The formation can take place entirely via an online system; notarization is not necessary. In addition, the S.A.S. can also be founded as a one-man company (otherwise at least two shareholders are always required in Mexico), there is no minimum capital. The maximum turnover is five million Mexican pesos per year, otherwise the Simplified Joint Stock Company must be converted into a regular joint stock company. This form of company is therefore mainly intended for companies with only a few local activities.
How is a Company Incorporated and How Long does the Process Take?
Incorporation is usually prepared by lawyers and carried out by a notary. After successful incorporation, various notifications must be made.
For a company formation in Mexico, first the company name and an alternative for it and possibly trademarks must be registered. In addition, it is necessary to draw up articles of association and fill out incorporation powers. The process and incorporation can be done by local lawyers, and the shareholder does not have to be present in person.
After that, a tax number can be applied for and, among other things, the registration for social security can be carried out.
The entire process usually takes 1-3 months, depending on the processing of the Mexican authorities.
