Mexico is often considered the entrance to Latin America. Its proximity to the United States makes it one of the best countries for investors and entrepreneurs looking into the region for the first time.
In the past few years, Mexico has had considerable growth and is now the second-largest economy in all of Latin America, only after Brazil. The Covid-19 pandemic had a very strong effect in most Latin American countries, but 2022 is the perfect year to start a business in Mexico.
In this article, we have compiled a list of the 4 most common types of companies in Mexico, as well as some benefits and general requirements for the formation.
How to register a company in Mexico? What are the most common types of companies in Mexico? What are their differences? Which one is the best for my business?
Limited Liability Company
The Limited Liability Company or “Sociedad de Responsabilidad Limitada” (S. de R.L) is one of the most popular foreign companies. It works as a partnership for companies in the US that want to reduce their tax liabilities.
The incorporation of a Limited Liability Company in Mexico requires at least two partners with a minimum capital of 3,000 Mexican pesos and a maximum of 50,000 Mexican pesos.
The company’s shares must not be freely transferable or traded publicly. There is no requirement to appoint a statutory examiner.
Corporation or Stock Company
Corporations and Stock Companies in Mexico are also very common. This is because the shareholder’s liability is limited to their capital contributions and, in contrast with the LLC, the stock is freely transferable. This type of company can have an unlimited number of shareholders and needs a minimum of 50,000 Mexican pesos or 2,700 US Dollars. It is the legal structure that has the biggest potential for growth and profit.
Benefits of a Corporation in Mexico:
Continuity of life
Stock ownership is freely transferable
Lower tax rate
Sociedad en Comandita Simple
The “Sociedad en Comandita Simple” (SCS) is a type of partnership that has the advantages of an LLC.
There are two types of partners in a Sociedad en Comandita Simple:
Active partners that have unlimited liability
Silent partners are only liable for their capital contribution
With a Mexican Branch, any foreign company can start working in Mexico through branch offices. These types of companies will keep all their original liabilities and characteristics. To start operating in Mexico, they need to be approved by the National Commission of Foreign Investments and the Ministry of Foreign Relations. They also need to be registered at the Public Registry of Commerce.
If you are looking to start a business in Mexico, our company experts can help you register your company in Mexico and assist with the formalities and compliance along the process.
At Easyco, we make company formation in Mexico easy; our team of corporate experts has vast experience helping companies and individuals register their business in Mexico, with a proven track record of success across all of our services. Easyco aims to tackle the complex company formation processes across LATAM. We make business registration easy by providing a hassle-free online company registration experience.
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