LLCs vs Corporations in Mexico

Corporation vs Limited Liability Company

The two most common business types in Mexico are the Sociedad Anonima de Capital Variable (S.A. de C.V.) and the Sociedad de Responsabilidad Limitada (S. de R.L.). These are both corporate entities in Mexico for purposes of the law. However, the S. de R.L. is very similar to a partnership and in most cases will be treated like a partnership for tax purposes in countries like the United States and other jurisdictions. However, at the end of the day, from an operational standpoint within Mexico, and day-to-day operations, the difference among the two types of entities is minimal.

• The S.A. de C.V. has a greater number of corporate formalities when compared to the S. de R.L. Most of these formalities are based on providing shareholder protections.
• Both are the same for tax purposes within Mexico, and are treated identically.
• The S. de R.L. have a more simplified operational structure and are best suited for subsidiary entities.
• The S. de C.V. is best suited for cases where profits will remain in-country for reinvestment or where the company will act as a local holding company.
• The S. de C.V. is best suited in the case of a large number of investors or where protection of minority shareholder rights is a significant objective.

In addition to the former, there is the Asociación Civil (Civil Association), Sociedad Civil (Civil Company), Joint-Venture, and Sociedad en Comandita (Limited Partnership). Most companies are overwhelming established as either an S.A. de C.V. or an S. de R.L.

LLC/Corporate Formation 

Overview of Service and Pricing

MexInc will complete the formation of a legal entity in Mexico. Our team will consult with the client to define the appropriate ownership and shareholder structure, based on several considerations including local and foreign taxation, control, initial investment capital, administrative and corporate governance efficiencies, operational objectives.

The process does not require that the client travel to Mexico for any reason related to the process. All documentation is forwarded to the client in PDF form, which should be signed, executed, legalized/apostilled, and returned to our offices in original. Furthermore, should client desire to open a bank account, this process is likewise completed without the need to travel to Mexico.

Client has the choice to register the company using our office address or to provide their own registered address. MexInc staff are appointed where necessary to act as local legal representative or registered agent as required under Mexican law. Following completion of incorporation, monthly tax filing obligation begin immediately. Clients are obliged to either contract the services of their own accountant or to contract our services to maintain the company in good standing and current on all tax filings.

Once completed, process may move to undertake the following actions: obtaining importers permit, employment registration, immigration certification, product regulatory compliance, or bank account.

Procedures:

A. Client provides MexInc with corporate structure and copies of initial documentation uploaded via MexInc server.
B. MexInc requests authorization for use of corporate name from authorities
C. MexInc issues detailed instructional memorandum and powers of attorney
D. Client obtains certified copies of requested documents and executes powers of attorney
E. Client follows process for obtaining apostilles or document legalizations
F. Client forwards all original documents with apostilles or legalizations
G. MexInc translates all documents
H. MexInc notarizes and executes articles of incorporation on client’s behalf
I. MexInc registers company before the companies registry
J. MexInc obtains company tax identification (RFC) number from tax authority
K. MexInc obtains company e.signature (e.firma)
L. MexInc performs foreign investment registration

Documents Obtained:

• Articles of incorporation and by-laws
• RFC inscription certificate
• e.Signature (e.Firma) inscription certificates
• Foreign investment registration certificate

Corporate Forms:

Sociedad de Responsabilidad Limitada (S. de R.L. de C.V.)
Limited Liability Company or Sociedad

Sociedad Anonima (S.A. de C.V.)
Corporation

Pre-requisites:

No specific actions must be taken prior to initiating service.

Basic Documentary Requirements:

w/Parent Company

• Articles of Incorporation or certificate of organization
• By-laws, operating agreement, or equivalent
• Certificate of good-standing or similar
• Notarized powers of attorney
• Board resolution, certificate of incumbency, secretarial certificate
• Apostilles or legalizations

w/o Parent Company

• Notarized powers of attorney
• Apostilles or legalizations

Pricing Starting At:

Standard Limited Liability Company Formation – Starting at $3,490.00 USD [or get quote]