Setting up a legal entity in Mexico is manageable if you understand the sequence. Most foreign investors underestimate the number of registrations required after the notarial deed; incorporation is only the first step in a process that spans several government agencies. This guide walks through each stage, including realistic timelines and costs.
Choosing the right entity type
Two entity types cover the vast majority of foreign investment structures in Mexico.
The S.A. de C.V. (Sociedad Anónima de Capital Variable) is Mexico’s equivalent of a corporation. It generally requires at least two shareholders. Capital terms should be established in the bylaws and confirmed for the selected corporate form, state practice, and any regulated activity; Schöndube recommends avoiding fixed capital assumptions without a current, transaction-specific review. Shares are freely transferable unless the corporate bylaws restrict transfers. The S.A. de C.V. is the standard choice for operating companies, subsidiaries of multinationals, and entities that may eventually seek investment or go public.
The S. de R.L. de C.V. (Sociedad de Responsabilidad Limitada de Capital Variable) is Mexico’s limited liability company. It has a maximum of 50 partners, no statutory minimum capital requirement, and ownership interests rather than shares. Transfer restrictions apply by default under the LGSM—partners cannot freely sell to outsiders without partner consent. This makes the S. de R.L. better suited for joint ventures, professional services firms, and structures where ownership stability matters. It also avoids the statutory-auditor requirement and offers slightly simpler governance.
The right choice depends on your investor profile, the intended use of the entity, whether you anticipate bringing in additional investors, and sector-specific requirements.
The eight-step incorporation process
Step 1: company name authorization (Ministry of Economy)
Submit the proposed company name and up to five alternatives to the Secretaría de Economía (SE) for authorization. The SE checks that no identical or confusingly similar name is already registered. Processing time and the period for using an authorized name depend on the current Secretaría de Economía platform and rules. Schöndube recommends confirming the live authorization and validity period before scheduling execution of the incorporation deed.
Step 2: draft the corporate bylaws
Your attorney drafts the corporate bylaws. These must contain the company name and domicile, corporate purpose, capital structure, governance provisions (board or sole administrator, powers, and meeting procedures), transfer restrictions, if any, and dissolution and liquidation rules. For foreign-owned entities, the bylaws must include the Cláusula de Exclusión de Extranjeros or the Cláusula de Admisión de Extranjeros, depending on the sector and ownership structure.
Step 3: notarial deed execution
The corporate bylaws are formalized before a Mexican notary public. The notary is a licensed professional who serves a public function—unlike notaries in common law countries, Mexican notaries are lawyers with specialized certifications who review the legal validity of the documents they formalize. Both founders (or their duly authorized representatives holding notarized powers of attorney) must appear before the notary or sign before a notary in their home jurisdiction with an apostille. The notary incorporates the company and registers the deed in the Registro Público de la Propiedad y del Comercio (RPP). Timeline: 5-10 business days from appointment.
Step 4: RFC registration with SAT
Every Mexican legal entity must register with the Servicio de Administración Tributaria (SAT) to obtain a Federal Taxpayer Registry (Registro Federal de Contribuyentes, RFC). Registration must occur within 30 days of the notarial deed. The RFC is required to open bank accounts, enter contracts, issue invoices (CFDI), and file tax returns. The RFC is also required for IMSS employer registration. Registration is done online through the SAT portal, with a follow-up appointment at the local SAT office.
Step 5: RNIE registration with Ministry of Economy
If any shareholders are foreign (individuals or legal entities), the company must register with the Registro Nacional de Inversiones Extranjeras (RNIE) administered by the SE. The deadline is 40 business days from incorporation. RNIE registration is updated whenever there are changes in foreign ownership, capital increases, or changes in corporate information. Failure to register on time carries administrative fines.
Step 6: IMSS employer registration
Before hiring any employees, the company must register as an employer with the Instituto Mexicano del Seguro Social (IMSS). This establishes the employer’s social security account and determines the applicable risk classification (which affects contribution rates). Registration must occur before the first payroll. IMSS contributions are a significant cost—employer contributions typically run 20-25% of base salary depending on risk classification and seniority of the workforce.
Step 7: open a Mexican bank account
Most commercial banks require the original notarial deed, RFC certificate, proof of address for the company and its representatives, government-issued ID for all legal representatives and beneficial owners, and KYC documentation for the parent company. Account opening can take 2-6 weeks depending on the bank and the complexity of the ownership structure. For foreign-owned entities, banks apply enhanced due diligence under their own AML programs aligned with LFPIORPI.
Step 8: STPS workplace registration
The Secretaría del Trabajo y Previsión Social (STPS) requires employers to register the workplace and comply with workplace safety regulations under the LFT. For certain sectors and company sizes, an internal work rules (Reglamento Interior de Trabajo) must also be filed with the STPS within 60 days of commencing operations.
Timeline and costs
A straightforward incorporation with no complications takes 4-8 weeks from start to finish. Complex structures (multiple foreign shareholders, regulated sector, multiple simultaneous registrations) can take 10-14 weeks.
Professional, notarial, registry, and banking costs vary by entity, state, capital structure, foreign-investment requirements, and urgency. Schöndube recommends obtaining an itemized written estimate for the complete incorporation and post-closing registration process.
Ongoing obligations after incorporation
Once incorporated, the company must file monthly and annual tax returns with SAT; maintain corporate books, including the minutes book and shareholder or ownership-interest ledgers; hold annual shareholders’ assemblies; update RNIE registration annually and after material changes; file IMSS contribution reports monthly; comply with LFPDPPP data privacy obligations; and maintain accounting records for at least 5 years per the CFF.
Frequently asked questions
The S.A. de C.V. requires a minimum of two shareholders under the LGSM. A foreign parent company and one related entity (another group company or a nominee holding one share) are a common structure. The S. de R.L. de C.V. can also have as few as two partners. A single-member LLC equivalent does not exist under current Mexican corporate law.
Not necessarily. The founders can grant a power of attorney to a Mexican attorney who appears before the notary on their behalf. The power of attorney must be notarized in the founders’ country and apostilled. This is the standard approach for US and Canadian investors who want to complete incorporation without traveling to Mexico.
Capital requirements should be confirmed for the chosen entity, bylaws, and regulated activity rather than relying on a generic fixed amount. The capital must also be commercially adequate for banking, tax, and operating purposes. However, banks may require evidence of adequate capitalization before opening accounts, and some regulated sectors impose sector-specific minimum capital requirements.
The RNIE filing itself, once the application is complete, typically receives acknowledgment within a few business days. Missing the 40-business-day deadline triggers administrative fines under the LIE. The fines are not automatic—they depend on whether the SE conducts a review—but the registration obligation does not disappear. File as soon as possible if the deadline has passed and disclose the delay.
RFC registration automatically creates the IVA taxpayer status. Companies that charge for goods or services in Mexico must issue CFDI digital invoices and charge 16% IVA (0% for certain export transactions and agricultural products). IVA returns are filed monthly. If the company will export goods or services, there are IVA certification programs that can accelerate IVA refunds on inputs.