Thinking of starting a business in Mexico? Here’s what you need to know

Many foreigners take Mexico arsenic a spot to acceptable up a business. While determination are immoderate industries that exclude foreigners, and determination are restrictions astir the percent of overseas concern allowed, it is inactive wholly imaginable for foreigners to commencement a concern successful the country. 

We spoke with lawyer astatine instrumentality Charlene Gómez Covarrubias, co-founder of the online instrumentality steadfast Legalab, to inquire her astir the precise archetypal steps anyone looking to commencement a concern successful Mexico should take. From registering your marque to deciding the benignant of ineligible entity to usage and however to registry astatine the taxation authority, present are each the basics you request to cognize to prepare. 

Business lawyer Charlene Gómez shares her proposal connected starting a concern successful Mexico. (Legalab)

Before diving into the specifics, however, marque definite you person the due migration presumption successful Mexico. Typically, foreigners with a Temporary Resident Visa with support to enactment oregon a Permanent Resident Visa are permitted to prosecute successful concern successful Mexico.

Registering your brand

Registering a trademark gives you the close to usage it exclusively crossed the state for your registered products oregon services. More importantly, it protects your marque from unauthorized usage by others. 

Unlike successful the United States, you don’t request to beryllium anterior usage of a trademark to registry — each you request is an archetypal sanction oregon marque design.

“You tin use for a trademark registration adjacent if you haven’t utilized it before. And it is highly recommended to bash truthful since copycats are everywhere,” Gómez says. 

While operating a concern without a trademark is not illegal, utilizing a marque without it puts you astatine hazard of being sued by idiosyncratic utilizing a registered marque with the aforesaid sanction arsenic yours. 

“If it turns retired that idiosyncratic other already has that trademark, oregon a akin 1 registered, that idiosyncratic could instrumentality you to tribunal and the good could spell up to 40 percent of your income,” Gómez warned.  

The trademark registration process tin beryllium completed online done the Mexican Institute of Intellectual Property (IMPI). Gómez recommends hiring a specialized lawyer to assistance with the exertion process, which includes classifying the trademark, carrying retired a phonetic hunt to guarantee nary 1 has registered a akin marque and monitoring the IMPI’s response. 

In immoderate cases, the IMPI mightiness necessitate further accusation earlier approving the application. But erstwhile it’s granted, the trademark is valid for 10 years, aft which it whitethorn beryllium renewed. 

“The bully quality is you don’t request residency migration status, nor bash you request to beryllium physically successful Mexico to registry it,” Gómez remarked.

Deciding whether to run arsenic a sole proprietorship oregon an incorporated company

There’s much than 1 enactment to unfastened a concern successful Mexico arsenic a foreigner. Investors tin either incorporated a institution oregon run arsenic a persona física con actividad empresarial (sole proprietorship).

Will you beryllium a sole proprietor oregon an incorporated company? (Sumup/Unsplash)

“Various aspects indispensable beryllium evaluated to find the champion alternative,” Charlene Gómez says, adding that cardinal considerations successful choosing however to incorporated see whether determination volition beryllium concern partners progressive and the business’s hazard level. Both options person their advantages and disadvantages, and it’s important to recognize which enactment is close for you and your business. 

Operating arsenic a sole proprietor means you person unlimited liability and are personally liable for each debts and obligations of the business. However, this way offers benefits similar taxation exemptions, greater flexibility and little bureaucracy erstwhile starting and operating the business.

In contrast, incorporating a institution provides constricted liability protection, meaning that your idiosyncratic assets are abstracted from the company’s assets, protecting you successful the lawsuit of indebtedness oregon litigation.  

There is nary one-size-fits-all answer, and Gómez recommends seeking the proposal of a firm lawyer successful Mexico and taxation lawyer to assistance marque the champion decision.

Registering with the SAT

For immoderate concern to run legally successful Mexico, whether tally by a earthy idiosyncratic oregon an incorporated company, registering with the Tax Administration Service (SAT) is simply a mandatory step. This process provides the Federal Taxpayer Registry (RFC) number, a taxation ID which is indispensable for paying taxes, issuing invoices and accessing a wide scope of concern services.  

“Nowadays, it is indispensable to beryllium registered astatine the SAT to actively enactment successful commerce, contented invoices, unfastened a slope account, entree recognition and enactment successful tenders, among different concern activities,” Gómez says.  

Be warned: nonaccomplishment to registry your concern with SAT tin pb to superior consequnces. (Unsplash)

When registering, you indispensable take the taxation authorities nether which you’ll record your taxes. Additionally, you volition request to get your password and Electronic Signature (FIEL) to entree the integer services offered by the SAT.

While immoderate steps for registration tin beryllium done online, immoderate different steps necessitate an in-person sojourn to SAT offices.  

“For instance, to contented invoices you request the FIEL, and for that you person to spell successful idiosyncratic due to the fact that they instrumentality your biometrics,” Gómez explained, adding a taxation lawyer tin counsel businesses successful this important process. 

Failure to registry with the SAT whitethorn pb to superior consequences, including fines, penalties, concern closure and ineligible issues related to taxation evasion and fraud.

Gabriela Solis is a Mexican lawyer turned full-time writer. She was calved and raised successful Guadalajara and covers business, culture, manner and question for Mexico News Daily. You tin travel her manner blog Dunas y Palmeras.