Mexico Key Points
- Time – 2-3 weeks to incorporate your company
- Directors – only one director of any nationality, is necessary for your company
- Shareholders – two shareholder of any nationality, are required
- Share Capital – the share capital requirement is only €3,080
- Support – using our 20 years experience we guide you throughout every step of the company formation process
Company types are sociedad anónima (business corporation), sociedad de responsabilidad limitada (limited liability company).
Mexico’s General Corporations Act (Ley General de Sociedades Mercantiles) requests for a minimum of at least two shareholders to form any type of legal entity. Each initial shareholder or incorporator has to subscribe at least one stock certificate, and must appear before a Mexican Notary Public to sign the incorporation deed in the Notary’s Protocol Book.
The incorporation deed (called acta constitutive) will comprise both the articles of incorporation as well as the corporate bylaws, and will therefore provide specific regulation for governance of the company, management, profit distribution, shareholder voting and preference rights, etc.
The incorporation deed will necessarily have to provide for an immediate form of management: either a Sole Administrator (administrador nico) or a Board of Directors (Consejo de Administración) with a minimum of three people to act as President, Secretary and Treasurer. The incorporator may be able to fill these roles temporarily, or be appointed as a sole administrator instead.
The sociedad anónima requires for duly appointed Comptroller (comisario) which will permanently oversee and guarantee that all corporate duties are met during the course of life of the company.
A decision must also be made addressing which members of the Board of Directors will be the legal representatives of the corporation (normally at least the President is appointed as such). The legal representatives will then be granted a full power of attorney to act on behalf of the company, with the possibility of limiting such power of attorney for operations not to exceed a certain amount, or in regard to certain specific tasks (i.e. one may require the joint action of two of the representatives for some actions or for transactions of more than a certain amount).
A name must also be chosen and this must not be similar to any existing corporate name registered with the Foreign Affairs Ministry (Secretaría de Relaciones Exteriores). A corporate name search must be performed previously in order to verify that there is no similar name already registered and that the incorporation process will be granted. The name may be any word with no meaning in any language, and will always be followed by the abbreviations “S.A. de C.V.”
Finally, the company capital must be determined at the time of incorporation, we suggest fifty thousand pesos as well as the number of shares of stock. Since individual shares cannot be divided, the number must be big enough to allow for any transfer or distribution of shares you may encounter in the near future. We normally use 100 shares, but it could also be 1000 or more.
All these characteristics and governance principals may be changed at any time by a shareholders’ meeting in the event there is a need to modify the company’s bylaws according to new needs or requirements.
The Process of Incorporation:
To begin the incorporation process you will need the following information:
- Specify a broad general purpose for the company.
- Place of business (city).
- Capital stock (usually).
- Initial contributions or capital stock for each shareholder the minimum).
- Form of management (sole administrator or board of directors).
- Appointing a comptroller (comisario) who will be in charge of overseeing that all corporate obligations are met.
- Shareholders’ general information including: 1) name; 2) place of birth; 3) date of birth; 4) marital status; 5) place of residence; 6) TIN number (tax identification number); and 7) a copy of each member’s ID.
Obtaining a corporation incorporated in Mexico does not necessarily mean that the shareholders have to travel there – Shareholders have two options:
- Each shareholder appearing directly and personally before the Notary to form the sociedad anónima this scenario, the shareholders would have to get a business entry form or permit (FM3) to be able to conduct a legal transaction while in Mexico (by signing the corporate deed). This could slow down the incorporation process somehow and will add costs for the incorporation. It is until all permits for the shareholders have been secured that the Notary will allow execution (signing) of the corporate deed (acta constitutiva);
- Incorporating the company under your names but through us. You could appoint us as your agent for each shareholder. Each shareholder would grants a formal power of attorney to specifically incorporate a company and contribute a fixed percentage of the capital stock.
The Incorporation Process
The incorporation process in general carries the following necessary steps:
- Drafting and execution of the articles of incorporation and corporate bylaws in Spanish language (acta constitutiva).
- Filing for corporate name search and name and company registration before the Foreign Affairs Ministry (Secretaría de Relaciones Exteriores)
- Preparation and execution of articles of incorporation and corporate bylaws before a Notary Public.
- Filing of company activities before the Federal Revenue Office (Hacienda).
- Filing of the acta constitutiva before the City’s Public Registry of Property and Commerce.
|Obtain the authorization of using the company name from the Ministry of Foreign Affairs – Secretaría de Relaciones Exteriores|
|Sign the deed of incorporation before a notary public and obtain tax registration number|
|Register the deed in the Public Register of Commerce.|
|Register with the Mexican Social Security Institute (IMSS).|
|Register with the local tax administration – Secretaría de Finanzas del Gobierno del Distrito Federal for payroll tax|
|Notice of opening a mercantile establishment before local government|
|Register with the National Business Information Registry (Sistema de Information Empresarial – SIEM).|
|File a notice with the National Institute of Statistics, Geography and Information – INEGI|