Set Up Business in Mexico

Mexico Expansion Guide

Global Upside helps companies set up, hire, and operate in Mexico. Set up a legal entity quickly and easily with our solutions for branch, subsidiary, and rep office. Looking for an alternative to permanent establishment? Hire and pay employees in Mexico without a legal entity by using our PEO & employer of record services. Once your business is set up, our teams can support with recruitment and staffing, human resources, employee benefits, payroll, accounting, and tax.

Capital City

Mexico City


Mexican Peso ($)




Federal Presidential Republic

Country Overview

Surrounded by the Pacific Ocean on the West and the Gulf of Mexico to its East, Mexico is a developing market economy and has strong links to the US. A major part of the economy is dependent on services such as finance, transportation, trade, and government accounting.

  • Mexico is the world’s biggest exporter of avocado.
  • Mexico’s major import commodities are agricultural machinery, electrical equipment, metalworking machines, steel mill products, and car parts for assembly.
  • The main export items are crude petroleum, gold, refined petroleum, copper ore, silver.

Options for setting up a legal entity in Mexico include:

Sociedad Anónima de Capital Variable (S.A. de C.V.)

A Sociedad Anónima de Capital Variable (S.A. de C.V.) is similar to a US corporation. This form of entity can have an unlimited number of investors. The investors do not bear any personal liability and can procure shares from existing investors.

Sociedad de Responsabilidad Limitada de Capital Variable (S. de R.L. de C.V.)

A Sociedad de Responsabilidad Limitada de Capital Variable (S. de R.L. de C.V.) is similar to an LLC in the US. This form of entity can have up to 50 partners who bear no personal liability for the business. The sole administrator, or the board of directors, are completely responsible for the management of the business.

Sociedad Anónima Promotora de Inversión de Capital Variable (S.A.P.I de C.V.)

A Sociedad Anónima Promotora de Inversión de Capital Variable (S.A.P.I de C.V.) is a subsidiary of a Sociedad Anónima de Capital Variable and is governed by the Stocks Market Law (Ley del Mercado de Valores). This form of entity must be managed by a board of directors and not a sole administrator.

It takes a minimum of 3 to 4 weeks to incorporate a legal establishment in Mexico.

The Federal Labor Law regulates employment in Mexico. This legislation mandates that all employment contracts must be in writing and must include:

  • Name, nationality, gender, marital status, and address of the worker and employer
  • Duration of the employment relationship
  • Type of work to be provided
  • Job location
  • Working hours
  • Remuneration and payment conditions
  • A statement that the worker will be trained according to the plans and programs established by the company or by law
  • Rest days, holidays, and other conditions agreed to by both parties

The payroll cycle options in Mexico are monthly, semi-monthly, weekly, or bi-weekly.

The accounting standards are established by governing bodies including the Mexican Council for Research and Development of Financial Information Standards. It is essential for Mexican companies to maintain compliance with the Mexican Financial Information Standards (NIF), which were earlier known as the Generally Accepted Accounting Principles (PCGA).

Corporate Tax

The corporate tax rate in Mexico is 30%.

Value Added Tax (VAT)

The VAT rate in Mexico is 16%.

The federal data protection laws in Mexico state that collecting, utilizing, storing, transferring, or disclosing an individual’s personal data is prohibited, and that personal data cannot be used for commercial purposes.

Anti-Bribery & Anti-Corruption Law

The Mexican Criminal Code (Decree-Law No. 2,848), Article 333 regulates the bribery of public officials. In addition to this, the Mexican Anti-Bribery Law (No.12,846/2013) authorizes the administrative and judicial consents for all legal establishments.

1. Bribery of Public Officials

For Individuals:

i) Imprisonment for up to 12 years

ii) A monetary fine

For Businesses (Administrative) :

i) A fine that ranges from 0.1% to 20% of the total revenue earned

ii) Publication of the critical verdict

For Businesses (Judicial):

i) Prohibition from receiving government grants for up to 5 years

ii) Confiscation of assets

iii) Ban on the operational activities

iv) Mandatory termination of the business

2. Bribery of Private Officials

Not governed under Mexican legislation.