Starting a business in Mexico: your launchpad for Latin America

The Sociedad Anónima (S.A.) is the most formal corporate structure in Mexico, suitable for larger operations or those planning to raise capital. Setting up a Mexican stock corporation requires at least two shareholders and there is no upper limit on ownership. Equity takes the form of negotiable shares. Governance is strictly regulated, requiring either a board of directors or a sole administrator. A statutory auditor is also needed to oversee management.

Forming a limited liability company (LLC) in Mexico is a popular alternative for small-to medium-sized enterprises and foreign subsidiaries. It limits membership to between two and 50 partners, whose liability is limited to their capital contributions. It also offers greater flexibility in management and governance. It is a preferred vehicle for US investors as it can be treated as a pass-through entity for US tax purposes, which may help prevent double taxation.

Suitable for entrepreneurs and start-ups, this newer vehicle allows a single shareholder and offers a streamlined online incorporation process without requiring a notary. However, it is subject to a strict annual revenue cap, beyond which it must convert to an S.A. or S. de R.L.

A branch office serves as a direct extension of the parent company, allowing immediate commercial activity and invoicing without incorporating a separate legal entity. As it lacks independent legal standing, the parent retains unlimited liability for all Mexican operations and must obtain authorisation from the Ministry of Economy to operate locally.

A Maquiladora is a Mexican manufacturing vehicle that falls under the IMMEX (Industria Manufacturera, Maquiladora y de Servicios de Exportación) programme, which allows foreign companies to import raw materials and equipment duty-free, if the finished products are exported. This model is attractive due to lower labour costs and significant tax advantages, while also benefiting from proximity to the US market. Operating a Maquiladora requires establishing a formal Mexican legal entity and managing local regulatory compliance.

The shelter model is a faster, lower-risk option for foreign manufacturers looking to enter Mexican market. Manufacturers can operate under a local provider's Mexican entity, effectively eliminating their direct legal presence and liability in the country. They can then leverage IMMEX incentives without committing to a formal foreign subsidiary.

A representative office serves as a non-commercial presence for market research and brand promotion, without the complexity of full incorporation. It allows foreign parent companies to establish a local presence, hire staff and navigate the market. However, it is not permitted to generate revenue or enter into sales contracts and the parent company retains direct legal liability. It requires registration with the Ministry of Economy and the SAT.

We advise on the most suitable company form in Mexico based on your business objectives and operational needs. Our 'at-a-glance' comparison table outlines key information on different company formation options.

When establishing a business in Mexico, foreign investors must assess ownership restrictions, licensing requirements and sector eligibility under the Foreign Investment Law (Ley de Inversión Extranjera) and the General Law of Commercial Companies (Ley General de Sociedades Mercantiles), administered primarily by the Ministry of Economy and, where required, the National Foreign Investment Commission.

The classification of business activities determines the applicable legal vehicle and regulatory requirements, while an investor's jurisdiction of origin may affect access to treaty benefits, tariff preferences and tax relief mechanisms.

Certain activities, including financial services and insurance, may be subject to additional approvals or ownership restrictions.

Trade agreements and incentive programmes such as IMMEX can influence supply-chain and export structures. Investors intending to relocate personnel should also review visa and work-authorisation requirements.

Misalignment between business activity, ownership structure and licensing obligations may result in delays or operational restrictions.

Trade relations between the UK and Mexico are deeply rooted, dating back to 1825. Today, the UK–Mexico Trade Continuity Agreement (2021) continues to provide the principal framework for bilateral trade.

The CPTPP also entered into force between the UK and Mexico on 22 June 2026 following Mexico's completion of its ratification procedures.

Mexico offers UK firms a dual advantage: a large domestic consumer base and a strategic platform for serving North American markets and broader regional operations.

UK companies entering Mexico are active in automotive, pharmaceuticals, advanced engineering and manufacturing. Opportunities are also emerging in fintech and edtech.

Mexico was the first country in the Americas to issue a sustainability-linked sovereign bond on the London Stock Exchange, signalling demand for UK expertise in low-carbon infrastructure and sustainable finance.

Investors must assess how their business activity is classified under Mexico's Foreign Investment Law while reviewing applicable bilateral trade pacts.

The UK–Mexico Trade Continuity Agreement remains the principal bilateral trade framework, complemented by the CPTPP. Together, these frameworks support tariff preferences, investment certainty and cross-border trade opportunities for qualifying businesses.

Entry approach: British investment is concentrated in three areas - Mexico City, Monterrey and the Bajío region. Mexico City remains the primary destination for financial services, fintech and corporate headquarters. Companies focused on advanced engineering and manufacturing are established in Monterrey because of its proximity to the US border or within the specialised industrial clusters of the Bajío region, including Querétaro and Guanajuato.

The EU–Mexico Global Agreement has been in force since 2000 and remains the primary framework governing bilateral trade and investment.

In 2025, the EU and Mexico concluded negotiations on a modernised agreement, which was signed in 2026. Once ratified, it is expected to expand market access and strengthen regulatory cooperation.

The EU is one of Mexico's largest trading partners and a key source of foreign direct investment. European companies establish operations in Mexico to integrate into North American supply chains under this framework.

Companies should assess how their business activity is classified under Mexico's Foreign Investment Law alongside applicable trade agreements when selecting a suitable market-entry structure.

Entry approach: European investment is concentrated in the Bajío region, where major German automotive manufacturers have established significant production and supply-chain operations. Guadalajara has become an important destination for European technology and IT companies, while northern manufacturing centres such as Tijuana and Monterrey continue to attract investment in electronics and advanced manufacturing.

ASEAN businesses are increasingly exploring Mexico as a manufacturing, distribution and nearshoring destination for access to North American markets. Mexico's participation in CPTPP provides market access links with several ASEAN members, including Singapore, Malaysia, Vietnam and Brunei.

The ASEAN Committee in Mexico supports engagement between ASEAN businesses and Mexican stakeholders, while investment activity is often focused on electronics, medical devices and advanced manufacturing.

Businesses should assess how their activities are classified under Mexico's Foreign Investment Law, alongside applicable trade treaties, to determine ownership limits and tax implications. For investors from CPTPP member states, the agreement may provide tariff advantages and enhanced market access for qualifying goods and services, although domestic ownership and licensing requirements continue to apply independently.

Entry approach: Guadalajara may suit technology, electronics and innovation-focused businesses because of its established engineering ecosystem. Nuevo León is often selected for export-oriented manufacturing due to its industrial base and proximity to US supply chains, while Querétaro attracts companies involved in aerospace and advanced manufacturing activities.

Commercial ties between Mexico, mainland China and Hong Kong have expanded as manufacturers and trading companies seek to diversify supply chains and strengthen access to North American markets.

Mainland Chinese businesses are increasingly establishing manufacturing and supplier operations in Mexico as part of broader nearshoring and North America-focused strategies. Hong Kong businesses often approach Mexico through trade, logistics, investment holding and regional coordination structures, leveraging their position as an international financial and commercial centre.

Analysing how business operations are classified under Mexico's Foreign Investment Law is essential to establish whether foreign ownership caps apply or if specific bilateral frameworks offer relief.

Mexico and Hong Kong maintain a Double Taxation Agreement that may provide tax efficiencies for qualifying structures. Mexico does not currently have a free trade agreement with mainland China, meaning businesses typically rely on Mexico's domestic investment framework, sector-specific incentives and export-oriented programmes when establishing operations.

Entry approach: Nuevo León and Coahuila continue to attract mainland Chinese manufacturers involved in automotive, electronics and industrial production, supported by proximity to US markets. Mexico City is frequently used by Hong Kong businesses requiring regional management, financial coordination and commercial representation across Latin America, while industrial parks such as Hofusan Industrial Park remain relevant for manufacturing-focused investments.

US companies typically establish operations in Mexico as part of highly integrated North American supply chains supported by the USMCA. Mexico's manufacturing ecosystem, logistics networks and skilled, cost-effective workforce continue to support cross-border operations.

Mexico has consistently been among the United States' top two trading partners. The US Commercial Service and the US–Mexico Foundation provide networking and market entry support for American entrepreneurs.

Analysing how business operations are classified under Mexico's Foreign Investment Law is essential when evaluating market-entry structures alongside relevant bilateral frameworks. USMCA provides the principal framework for cross-border trade and investment, supporting tariff-free treatment for qualifying goods, integrated supply chains and investment predictability across North America.

Entry approach: US firms often follow a four-corner strategy. This includes Mexico City for central management and regulatory access, Guadalajara for tech and R&D, Monterrey for industrial logistics and the Baja California border zones for the IMMEX programme. This approach allows them to maintain tight control over supply chains while minimising shipping times to US distribution centres.

Trade and investment links between Mexico and the Gulf region have expanded as GCC investors seek opportunities outside traditional markets and Mexican businesses increase engagement with the Middle East.

UAE-based investors often lead regional activity through Dubai and Abu Dhabi, which serve as headquarters locations for outbound GCC investment. Areas attracting interest include logistics, infrastructure, renewable energy, food security, advanced manufacturing and technology. Organisations such as the UAE–Mexico Business Council and various bilateral chambers of commerce support commercial engagement.

Investors must assess how their business activity is classified under Mexico's Foreign Investment Law, including whether foreign ownership limits apply, while reviewing applicable bilateral trade pacts. While Mexico does not maintain a comprehensive free trade agreement with the GCC, businesses commonly rely on bilateral investment arrangements, double taxation treaties where available, commercial cooperation frameworks and sector-specific incentive programmes when structuring investments into Mexico.

Entry approach: Mexico City may suit investors requiring regional headquarters functions, financial services access and government engagement. Monterrey is often selected for industrial and infrastructure-related investments due to its manufacturing ecosystem, while Bajío locations such as Querétaro are relevant for advanced manufacturing, aerospace and supply-chain-oriented operations.

Opening a business in Mexico involves a range of costs. Many will vary depending on your choice of entity, field of activity and location. Other expenses will be incurred for mandatory steps, such as translating documents into Spanish.

We provide transparent, detailed cost breakdowns tailored to your unique needs, enabling you to plan your finances effectively.

• Registration and notary fees: Granting your business legal standing in the country involves formal costs. They include formalising your company deed through a public notary and registering with the Public Registry of Commerce.

• Licensing and permit fees: Certain operating licences and land-use permits may be required by the authorities. The total cost varies depending on your specific business activity and local safety or environmental requirements.

• Visa and immigration costs: Any business transferring employees or hiring foreigners in the country of incorporation will incur costs including federal application fees, document legalisation and official identification cards.

• Office space rental: This includes the costs of leasing a physical or virtual office, which is mandatory for tax registration.

• Professional fees: You may also engage expert support to help you navigate the local landscape. This can include legal counsel, specialist business set-up consultants including electronic accounting services, as Mexico's tax system is fully digital.

• Other potential costs: Miscellaneous expenses may arise during the set-up phase, such as certified translations of foreign documents, banking fees and commissions and the acquisition of digital tax stamps for mandatory electronic invoicing.

With Hawksford, you benefit from a rigorously defined, phase-by-phase framework. It is designed to support a well-paced and fully compliant market entry in Mexico that aligns with your corporate goals.

We begin with a comprehensive consultation to assess your business objectives, operational needs and long-term goals. Expert guidance at this stage is critical. It helps determine the most cost-effective legal structure and location for your business model.

Following the initial consultation, we create a tailored roadmap setting out the most productive and streamlined path for launching your enterprise. This includes support with Mexican legal incorporation, corporate governance and specific regulatory requirements unique to your field.

Our specialists offer professional support in drafting and managing all essential paperwork, ensuring accuracy and full adherence to Mexican legal standards. This is essential for securing government authorisations and avoiding administrative setbacks.

Our team oversees the registration of your corporate name (via the Ministry of Economy) and the processing of your business permits, coordinating directly with the necessary agencies (such as the Tax Administration Service or municipal authorities) to obtain clearances and finalise all legal protocols.

If needed, we can assist with the application and processing of employment visas for you and your employees, managing the documentation and liaising with the relevant immigration authorities to ensure legal residency and permission to work.

Mexico has strict KYC protocols. Businesses must ensure all notarised deeds and tax registrations meet the specific requirements of leading financial institutions.

This includes support in finding commercial office space or a professional office address, registering the address with the SAT and Public Registry of Commerce and maintaining compliance (including record keeping and notifying authorities).

Mexico may be a world leader in digital tax innovation, but incorporating in the country remains a formal, document-intensive process that still requires wet signatures. We are dedicated to getting you set up as quickly as possible and can provide you with clear and practical timelines for every stage, so you can plan effectively and start operating with minimum delay.

• Selected corporate entity: Your chosen legal framework and jurisdiction can significantly influence the set-up process.

• Nature of operations: Commercial activities that require unique permits from government agencies may extend the authorisation period.

• Administrative turnaround: The speed at which documentation is filed and reviewed by the appropriate regulatory bodies will affect the schedule.

Our extensive expertise and proactive approach can significantly contribute to streamlining your business set-up process. We provide clear and concise guidance on all required steps and potential bottlenecks, enabling you to meet deadlines and prepare effectively. We will also work with you to ensure all documentation is accurate, complete and submitted correctly, minimising delays caused by errors or omissions.

• Initial planning and document preparation: Typically 1 to 2 weeks.

• Company registration and licensing: Usually around 8 to 12 weeks.

• Visa processing: 1 to 2 months for approval by immigration and visa issuance at the consulate.

• Bank account opening: Typically 4 to 12 weeks.

While providing these estimated timelines, we place a strong emphasis on consistent communication and proactive management of the entire set-up process. This ensures that a timely and compliant set-up is achieved within the applicable legal framework and regulatory requirements.

Companies in Mexico must maintain statutory registers and corporate records at their registered office under the General Law of Commercial Companies (Ley General de Sociedades Mercantiles).

Required statutory records include:

• Shareholder and ultimate beneficial ownership registers

• Director and officer registers

• Registered office address documentation

• Constitutional documents, including the Deed of Incorporation (Acta Constitutiva) and Articles of Association

• Board and shareholder meeting minutes and resolutions

Mexico imposes event-driven filing rules requiring notification to the Public Registry of Commerce within statutory deadlines following changes to directors, shareholders, beneficial owners, registered address or share capital.

Companies must maintain accounting records, issue digital tax invoices (CFDI) and prepare periodic financial statements under Mexican Financial Reporting Standards (NIF) or International Financial Reporting Standards (IFRS) for SAT verification.

Tax compliance, administered by the SAT, requires:

• Corporate income tax (ISR): Registration, settling monthly provisional payments by the 17^th day of the following month and filing the annual ISR return by 31 March at the standard 30% rate

• Value-added tax (IVA): Registration and submitting monthly returns and settling tax liabilities by the 17^th day of the following month at the standard 16% rate

• Withholding tax: Deducting tax at source on domestic and cross-border payments (including service fees, royalties and dividends) for monthly submission to the SAT.

• Payroll and social contributions: Processing employee payroll, issuing electronic pay slips (CFDI de nómina) and remitting monthly and bimonthly employer contributions to IMSS and INFONAVIT.

Following incorporation, companies must maintain corporate standing through recurring statutory filings to the Ministry of Economy, SAT and relevant sector authorities.

Recurring corporate and regulatory obligations include:

• Annual general meeting: Holding an ordinary shareholders' meeting within 4 months of the financial year-end to formally approve audited financial statements and officer reports.

• Foreign investment reporting (RNIE): Completing initial registration with the National Registry of Foreign Investments within 40 business days of incorporation, submitting quarterly updates within 10 business days of quarter-end if financial thresholds are met and filing an annual economic report.

• Registry updates: Lodging updated corporate resolutions, powers of attorney and capital modifications with the Public Registry of Commerce.

• Licence and sector reporting: Processing annual renewals, environmental disclosures and operational reports required under IMMEX manufacturing programmes or sector-specific permits.

Electronic filings are processed through official web portals, including the SAT system and the Ministry of Economy's corporate publication platform (PSM).