Luis Fuentes, a finance specialist and international business expert, serves as Corporate Affairs Director at Alligare International LLC and leads Estudio Fuentes. With over 10 years of experience, he excels in financial advisory, business internationalization, and strategic corporate solutions, helping companies in Latin America, Europe, and Asia expand globally.
Discover how to register a subsidiary in Mexico with key steps, legal requirements, and compliance tips for foreign businesses.
Table of Contents
How Do You Register a Subsidiary in Mexico?
To register a subsidiary in Mexico, you need to complete several steps, including reserving a corporate name, drafting company bylaws, registering with the Public Registry of Commerce, obtaining a Federal Tax Identification Number (RFC), and potentially registering with the National Registry of Foreign Investments if there are foreign shareholders. Key documents required include the company bylaws, notarized articles of incorporation, and proof of company name reservation.
What Are the Detailed Steps to Register a Subsidiary in Mexico?
To successfully complete the registration process for a subsidiary in Mexico, businesses must navigate a structured legal and administrative journey. This involves choosing and reserving a corporate name, drafting and notarizing bylaws and incorporation documents, registering the company publicly, obtaining a tax ID, opening a bank account, and complying with social security and foreign investment requirements when applicable. Each step ensures proper establishment, regulatory compliance, and operational readiness.
Below each of the core steps in detail:
How Do You Reserve a Corporate Name with the Ministry of Economy?
You must apply through the Mexican Ministry of Economy to reserve a unique company name. This ensures that no other registered entity in Mexico operates under the same name, and is a prerequisite for incorporation.
How Do You Draft the Company Bylaws?
Company bylaws must outline the purpose of the business, the structure of its capital, and the internal governance. They serve as the foundational rules that govern the company’s operations and must comply with Mexican corporate law.
Why Do the Articles of Incorporation Need to Be Notarized?
The notarized articles of incorporation formalize the creation of the company. They must be notarized by a Mexican notary public, making the company legally recognized and allowing further registrations.
How Do You Register with the Public Registry of Commerce?
Once notarized, the company must be officially registered at the Public Registry of Commerce. This gives the entity public legal status and ensures recognition by government authorities.
How Do You Obtain a Tax Identification Number (RFC) from SAT?
Registration with Mexico’s Tax Administration System (SAT) provides the business with its Federal Tax Identification Number. This number is essential for invoicing, tax reporting, and other financial activities, and the process requires a completed RFC application form.
When Is Registration with the National Registry of Foreign Investments (RNIE) Required?
If foreign individuals or entities hold equity in the company, registration with the National Registry of Foreign Investments may be necessary to comply with investment regulations.
What Is Required to Open a Corporate Bank Account in Mexico?
You’ll need documentation such as the RFC, proof of company registration, company bylaws, and identification of the legal representative. This account is essential for handling local transactions.
How Do You Submit Documents to the Registrar of Companies and Pay Fees?
The required documents must be submitted to the Registrar, along with applicable registration fees. This step finalizes the formal recognition of the subsidiary.
Who Can Be Appointed as the Legal Representative?
A legal representative is a person authorized to act on behalf of the company in Mexico. They must have valid identification and may be required to sign official documents or represent the company before authorities. Foreigners may need to register their appointment through the Ministry of External Affairs (SRE).
Why Is It Necessary to Register with IMSS and State Tax Authorities?
Employers must register with the Mexican Social Security Institute (IMSS) to meet labor obligations. In some cases, additional registration with local tax offices is also required for state-level compliance.
What Important Considerations Should Be Taken Into Account?
In addition to the setting up a subsidiary process, there are several strategic and legal factors that can influence your success in Mexico. These considerations address representation, compliance, and regulatory obligations that may not be obvious at first glance:
Why Might You Need a Power of Attorney?
If a third-party representative is used, a power of attorney must be established.
What Documents Does the Legal Representative Need?
The legal representative must provide their identification (passport, visa, or Mexican ID).
Why Is Proof of Address Necessary?
Proof of the Mexican business location is required.
When Is a Foreign Investment Notice Required?
If there are non-Mexican shareholders, a foreign investment notice may be required.
hould You Hire a Local Attorney?
Hiring a local attorney can be helpful in navigating the registration process and ensuring compliance with local laws.
Why Is It Important to Understand Mexican Tax Law?
Mexican tax law is complex, so it’s important to consult with a Mexican accountant to ensure compliance with tax obligations.
What Must Foreign Companies Provide to Set Up a Branch in Mexico?
Foreign companies setting up a branch in Mexico need approval from the Mexican Ministry of Economy and need to provide translated documents of the parent company, according to Company Formation in Mexico.
What Additional Questions Might Arise When Registering a Subsidiary in Mexico?
Even after reviewing the formal steps and key considerations for registering a subsidiary in Mexico, some practical and strategic questions may remain. The following FAQ section addresses common concerns that go beyond the basics, helping investors anticipate real-world scenarios and ensure operational readiness:
How long does it typically take to register a subsidiary in Mexico?
On average, the full registration process can take between 4 to 8 weeks, depending on the complexity of the structure, documentation completeness, and responsiveness of government agencies.
Can a foreigner be the sole owner of a subsidiary in Mexico?
Yes, a foreign individual or legal entity can own 100% of a subsidiary in most industries. However, some restricted sectors may require local partnership or special permissions under Mexican foreign investment law.
Do I need to travel to Mexico to complete the process?
Not necessarily. With a properly executed and apostilled power of attorney, the process can be handled remotely by a legal representative in Mexico.
What are the ongoing compliance obligations after registration?
Subsidiaries must submit monthly and annual tax declarations, maintain accounting records, issue electronic invoices (CFDI), comply with labor and social security obligations, and potentially report to the RNIE annually if foreign investment is involved.
Is there a minimum capital requirement to open a subsidiary in Mexico?
There is no fixed minimum capital for most types of legal entities, but a symbolic amount (e.g., MXN $1) is typically used for registration. However, practical capital may be required by banks or investors.
Can the subsidiary hire foreign employees?
Yes, but it must register with the National Immigration Institute (INM) to sponsor foreign workers. It’s important to demonstrate that the roles cannot be filled locally or that specialized skills are involved.
Are there special economic zones or tax incentives for subsidiaries?
Mexico offers various incentives depending on the state or municipality, including reduced corporate taxes, customs benefits, or simplified regulations—especially in border regions or industrial parks. A local advisor can guide you on available programs.
What Can We Conclude from the Process of Registering a Subsidiary in Mexico?
Establishing a subsidiary in Mexico involves more than just completing paperwork—it requires a solid understanding of the legal framework, tax system, and regulatory expectations. As someone who has assisted numerous foreign investors and businesses through this process, I can affirm that preparation, local expertise, and clear strategic goals make all the difference. By addressing both the procedural steps and the underlying considerations, companies can position themselves for long-term success and compliance in the Mexican market. Whether you’re entering the country for the first time or expanding your operations, a thoughtful approach ensures your subsidiary is built on a strong foundation.
Finally, you might not only be interested in starting a business in Mexico, but also in expanding across Latin America.
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