Set up a company in Mexico.
The nearshoring capital of the Americas. USMCA member — tariff-free access to the United States and Canada. 30% CIT, 16% VAT standard; 20% CIT / 8% VAT in the northern border zone. IMMEX programme shelters duty-free import of materials for export manufacturing — anchored by every major automotive, aerospace, electronics and medical device group operating in North America. ~130 million domestic consumers. Coordinated through our San Diego office.
How do you set up a company in Mexico?
The dominant Mexican structure is the Sociedad Anónima de Capital Variable (S.A. de C.V.) — Mexico’s standard corporate form, equivalent to a limited company. The Sociedad de Responsabilidad Limitada de Capital Variable (S. de R.L. de C.V.) is the LLC equivalent, frequently used by US-headed groups because it can be elected as a partnership under US check-the-box rules. The SAS de C.V. is a simplified single-shareholder vehicle for SMEs (online formation, revenue capped at ~MXN 5m). The S.A.P.I. de C.V. is the investment-promotion variant used for VC/PE-backed scaleups and pre-listing structures.
You execute the bylaws (acta constitutiva) before a Mexican Notario Público, file the deed with the Public Registry of Commerce (RPC) in the state of domicile, register with SAT (Servicio de Administración Tributaria) to obtain the company’s RFC (tax ID) and e.firma (digital signature), register with IMSS and INFONAVIT for social security and housing fund if you will employ staff, and complete state-payroll-tax (ISN) and municipal registrations. Standard S.A. de C.V. formation runs 4 to 8 weeks end-to-end. SAS structures can be live in 2 to 3 weeks. IMMEX manufacturing-programme qualification adds 6 to 12 weeks.
Grant & Graham coordinates Mexican formations through our San Diego office (our North American hub, on the Mexican border) working with senior Mexico City counsel — structure selection, notarial deed, RPC filing, SAT/RFC, IMSS/INFONAVIT, banking, IMMEX qualification where applicable, sector and municipal licensing, and ongoing monthly tax and statutory work. Mexico is one of the few jurisdictions where the structure conversation and the operational conversation are inseparable: the choice of S.A. vs S. de R.L., the border-zone question, IMMEX eligibility, and the parent-country tax treatment all interact.
Worldwide system. 30% CIT. 16% VAT — or 8% in the border zone. IMMEX shelters export manufacturing.
Mexico operates a worldwide tax system — resident companies are taxed on global income, with foreign tax credits available under treaty. The standard corporate income tax rate is 30%; the northern border zone reduced rate is 20% for qualifying operations. VAT (IVA) is 16% standard, 8% in the northern border zone, and 0% on exports (with full input VAT recovery). Dividend withholding tax: 10% on profits earned post-2014 to non-residents (treaty rates apply). 60+ double taxation treaties including UK, US, Canada, Netherlands, Germany, Spain, Japan, Singapore. Electronic invoicing (CFDI 4.0) is mandatory for every transaction. Mexico is fully compliant with international transparency standards and is not on any EU non-cooperative-jurisdictions list.
CIT (Standard)
Corporate income tax on worldwide income for Mexican-resident companies. Foreign tax credit available under DTT. Quarterly provisional payments based on prior-year coefficient. Annual return due 31 March.
Border Zone CIT
Reduced CIT rate for qualifying operations in the northern border zone (designated municipalities along the US border). Combined with the 8% IVA rate, this is one of the most competitive tax positions in the Americas for export-oriented manufacturing.
IVA (VAT)
Standard rate. 8% in the northern border zone. 0% on exports — with full input VAT recovery. Exemptions for basic foodstuffs, medicines, books, education. Mandatory monthly returns (D-15).
Dividend WHT
Withholding on dividends from post-2014 profits to non-residents. Treaty rates typically reduce to 5–10%. Royalties/interest WHT 4.9% to 35% depending on type and treaty. Pre-2014 retained earnings exempt.
Other notable items: IMMEX programme shelters duty-free, VAT-free import of materials and equipment for export manufacturing (combined with VAT certification for cash-flow efficiency). Special Tax on Production and Services (IEPS) applies to alcohol, tobacco, fuel, sugary drinks, gambling. State payroll tax (ISN) 2–3% depending on state. Employer social security (IMSS, INFONAVIT, SAR) contributions ~25–30% of payroll. Transfer pricing rules USMCA-aligned with OECD standards; documentation mandatory above thresholds. UBO registry operated by SAT since 2022 — significant penalties for non-compliance. Mandatory profit-sharing (PTU) at 10% of taxable profit distributed annually to employees, capped at 3 months’ wages or average of prior three years (whichever higher). Pillar 2 15% global minimum tax in scope for MNE groups above €750m consolidated revenue.
Nine reasons businesses choose Mexico.
Mexico is the only economy with tariff-free access to the United States and Canada under USMCA, while offering Latin American labour costs and time-zone overlap with all major US business hubs. The nearshoring story has been the headline of 2024–26; the structural advantages underneath — the trade agreements, the engineering workforce, the IMMEX regime, and the logistics network — have been quietly building for two decades.
USMCA — tariff-free trade with the US & Canada
The United States-Mexico-Canada Agreement (in force since 2020, replacing NAFTA) provides preferential market access to a combined ~510 million consumers and over USD 30 trillion in GDP. Manufacturing in Mexico can ship into the US tariff-free when origin content thresholds are met. No other Latin American jurisdiction comes close on this dimension.
The nearshoring capital of the Americas
Manufacturing relocations from China and Asia to Mexico have accelerated sharply since 2022. FDI into Mexico reached record levels in 2024 and 2025. Industrial parks in Monterrey, Saltillo, Querétaro, and the Bajío region are at full or near-full occupancy. The reshoring story is the defining structural shift in North American supply chains for the decade.
~130 million domestic consumers
Mexico is the 12th largest economy globally and the 2nd largest in Latin America. A growing middle class, rapidly increasing digital adoption, and a young, working-age population make Mexico a substantial domestic market in its own right — not just an export platform. Major opportunity for B2B services, fintech, and consumer brands.
IMMEX & the manufacturing regime
The IMMEX programme (successor to the maquiladora regime) allows duty-free, VAT-free import of raw materials, components, machinery and equipment provided the finished goods are exported. Combined with VAT certification, this is one of the most tax-efficient structures globally for export manufacturing serving the US market. Worth investigating wherever export share exceeds ~30%.
Northern border zone — special tax regime
Designated municipalities along the US border enjoy a reduced 20% CIT rate (vs 30%) and 8% IVA (vs 16%). Designed to retain businesses on the Mexican side of the border and attract cross-border manufacturing. Tijuana, Mexicali, Ciudad Juárez, Reynosa and Matamoros are all within the zone. Materially valuable for the right operational footprint.
Engineering & manufacturing talent
Mexico graduates over 130,000 engineers annually — among the highest per-capita rates globally. Northern and central Mexico have deep talent pools in automotive, aerospace, electronics, medical devices and software. Bilingual professionals in Monterrey, CDMX and Guadalajara serve US clients in fluent English. Labour costs materially below the US, productivity competitive with Asia.
Time zone & logistics alignment with the US
Mexico spans CST through PST — fully aligned with US working hours. Land-border crossings, well-developed Pacific (Manzanillo, Lázaro Cárdenas) and Gulf (Veracruz, Altamira) ports, and a dense rail and road network make Mexico the only Latin American jurisdiction with this level of US connectivity. Same-day, same-time-zone operations with US headquarters are entirely practical.
Mature banking & financial infrastructure
Mexico has a deep, well-regulated banking sector dominated by BBVA, Santander, Banorte and Citibanamex. USD-denominated accounts are widely available alongside MXN. Modern payment infrastructure (SPEI real-time payments, CoDi QR). Sophisticated capital markets via BMV. Strong fintech sector under the 2018 Ley Fintech regulatory framework.
Transparency & compliance — clean standing
Mexico is fully compliant with international tax transparency standards. Not on any EU non-cooperative-jurisdictions list. Active member of OECD, FATF, and the Global Forum. UBO registry operational since 2022. FATCA and CRS information exchange in force. For groups concerned about the EU defensive measures applied to other LatAm jurisdictions, Mexico carries none of that regulatory baggage.
Seven legal vehicles — one usually fits.
For most foreign investors, the practical default is an S.A. de C.V. or S. de R.L. de C.V. — the choice between the two is typically driven by US parent-level tax considerations. Manufacturing groups serving the US market layer on the IMMEX programme. SME founders use the streamlined SAS de C.V.. Investment-backed scaleups use S.A.P.I. de C.V. for its flexible governance.
S.A. de C.V.
Sociedad Anónima de Capital Variable
The dominant Mexican corporate vehicle for foreign-owned operating companies — equivalent to a limited company or corporation. Full limited liability, strong governance framework, scales to any size. Minimum 2 shareholders (corporate or individual), minimum capital MXN 50,000. Sole administrator or board structure. Used for operating subsidiaries, manufacturing, services with employees, holding structures.
S. de R.L. de C.V.
Sociedad de Responsabilidad Limitada de Capital Variable
Mexico’s LLC equivalent. Frequently chosen by US-owned subsidiaries because it can be elected as a partnership (pass-through) for US federal tax under check-the-box rules — useful for tax-efficient cross-border consolidation. Partners 2 to 50 maximum, minimum capital MXN 3,000. Simpler governance than the S.A. — manager structure, no statutory examiner.
SAS de C.V.
Sociedad por Acciones Simplificada de Capital Variable
Streamlined entity for small businesses and individual entrepreneurs. Formed entirely online via the Ministry of Economy’s portal using e.firma. Single-shareholder permitted (individuals only). No statutory minimum capital. Annual revenue capped at ~MXN 5m; above this threshold the entity must convert to S.A. de C.V. or S. de R.L. de C.V. Live in 2–3 weeks.
S.A.P.I. de C.V.
Sociedad Anónima Promotora de Inversión
Designed for venture capital, private equity, and growth-stage companies preparing for institutional investment or eventual public listing. Flexible governance — multiple share classes, drag/tag rights, vetoes, anti-dilution provisions. More accommodating of complex shareholder agreements than a standard S.A. Minimum capital MXN 50,000. The right vehicle for VC-backed scaleups, M&A targets, and pre-IPO structures.
IMMEX / Maquiladora
Decree on the Manufacturing, Maquila & Export Services Industry
A special programme (not a separate entity type) layered on top of an S.A. or S. de R.L. for export-oriented manufacturing. Allows duty-free and VAT-free import of raw materials, components, machinery and equipment, provided finished goods are exported. VAT certification adds further cash-flow efficiency. Mandatory export ratio thresholds. Qualification 6–12 weeks via the Secretaría de Economía. Highly tax-efficient.
Northern Border Zone
Decreto de Estímulos Fiscales Región Fronteriza Norte
A special tax regime (not a separate entity) for qualifying companies operating in designated US-border municipalities. 20% CIT (vs 30%) and 8% IVA (vs 16%). Annual permit renewal required. Operationally compatible with IMMEX. Particularly attractive for Tijuana, Mexicali, Ciudad Juárez, Reynosa, and Matamoros. Substance required — not a paper structure.
Sucursal (Branch)
Branch of a Foreign Company
Foreign company conducting business in Mexico through a registered branch. RPC and SAT registration required; local legal representative mandatory. Taxed at 30% CIT on Mexico-source income. Used where parent-level booking is structurally necessary — for most foreign investors, an S.A. or S. de R.L. subsidiary is preferable due to simplified governance and cleaner separation.
Talk to us first
15-minute call · No commitment
S.A. de C.V. for most operating businesses; S. de R.L. de C.V. where US check-the-box treatment matters; SAS for sole founders; S.A.P.I. where institutional investment is in scope. Layer on IMMEX for export manufacturing, the border-zone regime for US-adjacent operations. Branch only where parent-level booking is necessary.
Book a call →From decision to live entity.
The end-to-end registration sequence for an S.A. de C.V. or S. de R.L. de C.V. in Mexico City, coordinated through our San Diego office and senior Mexico City counsel. Standard timeline 4 to 8 weeks end-to-end. SAS structures live in 2 to 3 weeks. IMMEX qualification adds 6 to 12 weeks. Border-zone permits add 4 to 8 weeks.
Structure decision & substance scoping
S.A. de C.V. (standard), S. de R.L. de C.V. (LLC / US check-the-box), SAS (SME), S.A.P.I. (investment), or Branch. Regime layer: IMMEX for export manufacturing, northern border zone for US-adjacent operations. Substance scoping: physical office, local staff, decision-making functions, accounting locus, treasury arrangements.
Foreign shareholder documents & legal representative
Foreign corporate shareholder documents (certificate of incorporation, articles, board resolutions, signatory powers of attorney) must be apostilled in country of origin and officially translated into Spanish by a Mexican-certified translator (perito traductor). A Mexican legal representative is appointed via notarised power of attorney — handles SAT filings, signs banking documentation, and is the point of contact for tax authorities.
Company name reservation & bylaws drafting
Reserve the company name with the Ministry of Economy (Secretaría de Economía) — 1 to 2 business days. Draft the acta constitutiva (bylaws) in Spanish defining corporate purpose (objeto social), authorised capital, share structure, governance (sole administrator or board), registered office, fiscal year. For IMMEX-bound entities, the corporate purpose is drafted with the export-manufacturing scope in mind from day one.
Notarial deed before a Mexican Notario Público
Execute the acta constitutiva as an escritura pública before a Mexican Notario Público — the moment the company legally exists. Mexican notaries are heavily regulated officials with quasi-judicial standing (not lawyers). The notary handles the foreign-investment registry filing (RNIE) automatically as part of the deed.
SAT registration, RFC & e.firma
Register with the Servicio de Administración Tributaria (SAT) to obtain the company’s RFC (Registro Federal de Contribuyentes — federal tax ID) and e.firma (digital electronic signature). The e.firma is mandatory for all tax filings, electronic invoicing (CFDI), and many banking interactions. Activity codes and tax regime are declared at registration.
SAT →Public Registry of Commerce (RPC) filing
The notarised acta constitutiva is filed with the Registro Público de Comercio (RPC) in the company’s state of domicile. Provides the public legal record and full protection of the corporate form. Typical timing: 2 to 4 weeks depending on the state. CDMX, Nuevo León and Jalisco are the more efficient jurisdictions.
IMMEX qualification (if applicable)
For export-manufacturing operations: file the IMMEX application with the Secretaría de Economía. Demonstrate the export-ratio threshold commitment, facility plan, machinery list, and substance footprint. Combined with VAT certification (separate but parallel SAT process) for full cash-flow efficiency on imported materials. Qualification 6 to 12 weeks.
Bank account opening
Open the corporate bank account with BBVA, Santander, Banorte, Citibanamex or HSBC México. KYC includes the notarised acta constitutiva, RFC, legal representative ID, proof of address, UBO declaration, and substance documentation. USD-denominated accounts available alongside MXN. Typically 3 to 5 weeks — commonly the longest single step.
IMSS, INFONAVIT & state-payroll registrations
If you will employ staff, register as an employer with the Instituto Mexicano del Seguro Social (IMSS) and the housing fund INFONAVIT before the first hire. Register for state payroll tax (ISN) in the state of operation. Workplace risk insurance classification (Prima de Riesgo) assigned by IMSS. Mandatory before any payroll runs.
IMSS →Ongoing tax, statutory & compliance
Monthly: provisional CIT payments, IVA returns, IEPS where applicable, mandatory CFDI electronic invoicing reconciliation, IMSS/INFONAVIT payroll filings. Annually: corporate income tax return (due 31 March), informative returns, financial statements, profit-sharing (PTU) distribution to employees, UBO refresh, transfer pricing documentation where thresholds met. Pillar 2 monitoring for in-scope MNE groups.
What it costs to incorporate & run.
All figures indicative for a standard S.A. de C.V. or S. de R.L. de C.V. in Mexico City with one foreign corporate shareholder. SAS de C.V. is materially cheaper (online formation). IMMEX qualification, border-zone permitting, and S.A.P.I. structures add substantial advisory work; the estimator below gives you a tailored quote in 30 seconds.
One-time setup
Ongoing monthly / annual
Get an estimate in 30 seconds.
Three quick questions. We will give you a realistic cost range and timeline for your situation, and route the answers straight into a fixed-price quote request from our San Diego office.
Which company structure are you considering?
How is the shareholding structured?
What do you need from us?
The legal framework to know.
A summary of the core legislation governing companies in Mexico. Substantive work delivered through Grant & Graham’s San Diego office and senior Mexico City legal, tax and accounting counsel.
Corporate Law
- General Law of Commercial Companies (LGSM, 1934)
- Foreign Investment Law — 100% foreign ownership permitted in most sectors
- Securities Market Law (LMV) — public companies & capital markets
- Civil Code — contracts & obligations
- Commercial Code — commercial transactions
Tax Law
- Income Tax Law (LISR) — 30% standard, 20% border zone
- VAT Law (LIVA) — 16% / 8% border / 0% exports
- Federal Fiscal Code (CFF) — administration, audit
- IEPS Law — special tax on production & services
- USMCA-aligned transfer pricing rules
Trade & Customs
- USMCA — preferential US & Canada access (since 2020)
- IMMEX Decree — manufacturing & export programme
- Northern Border Zone Decree — 20% CIT / 8% IVA
- 50+ trade agreements (EU, Japan, UK, Pacific Alliance)
- Customs Law & Padrón de Importadores
Employment Law
- Federal Labour Law (LFT) — strongly employee-protective
- Social Security Law — IMSS framework
- Subcontracting reform 2021 — outsourcing of core activities prohibited
- Mandatory PTU profit-sharing (10% of taxable profit)
- Aguinaldo (Christmas bonus) — 15-day mandatory payment
Data & IP
- Federal Data Protection Law (LFPDPPP) — INAI oversight
- Federal Industrial Property Law — IMPI (trademarks, patents)
- Federal Copyright Law — INDAUTOR
- Madrid Protocol member (international trademarks)
- WIPO & Berne Convention member
AML & Transparency
- Federal AML Law — vulnerable activities reporting
- SAT UBO Registry (since 2022) — significant penalties
- FATCA & CRS information exchange in force
- Fintech Law (2018) — ITF & IFPE entities
- Active FATF, OECD & Global Forum member
Mexico, answered.
Why has Mexico become “the nearshoring story”?
How long does it take to set up a company in Mexico?
Do I need to travel to Mexico to set up the company?
Can a foreign citizen or foreign company own 100% of a Mexican company?
What is the corporate tax rate in Mexico in 2026?
What is IMMEX and should we use it?
What’s the difference between S.A. de C.V. and S. de R.L. de C.V.?
What is the northern border zone special regime?
Is the Mexican banking system reliable? Can I open a corporate account?
What ongoing compliance is required for a Mexican company?
Is Mexico on any tax-haven or non-cooperative-jurisdictions list?
Can Grant & Graham manage the whole process?
Four steps from enquiry to live entity.
Discovery call
30-minute conversation to understand your business, sector, substance plan, IMMEX or border-zone eligibility, US/Canada parent tax interaction, and Pillar 2 impact if in-scope. Honest assessment of fit — entity type, location, and regime are all decisions, not defaults.
Recommendation
Senior advisory on structure (S.A., S. de R.L., SAS, S.A.P.I., Branch), IMMEX vs border-zone vs standard regime, banking partner, sector licensing, substance design, transfer pricing positioning, Pillar 2 modelling. Fixed quote in EUR or USD.
End-to-end formation
Bylaws, notarial deed, RPC, SAT/RFC/e.firma, UBO filing, IMSS/INFONAVIT, banking, IMMEX qualification where relevant, border-zone permitting, sector licensing. San Diego-coordinated, executed through senior Mexico City counsel.
Ongoing support
Retained accounting, monthly IVA & provisional CIT, payroll & IMSS, annual income tax return, PTU distribution, UBO refresh, transfer pricing documentation, Pillar 2 monitoring, IMMEX compliance reporting, sector reporting.
Ready to incorporate in Mexico?
Tell us in 25 minutes what you need. We will tell you honestly which structure makes sense (S.A., S. de R.L., SAS, S.A.P.I., Branch), whether IMMEX or the border-zone regime is the right layer, what substance the operation needs, and how the parent-country tax interaction works — then handle the setup end-to-end through our San Diego office and senior Mexico City counsel.