Register a Business in Mexico: Everything You Need to Know

Mexico in 2025 continues to be a strategic hub for global businesses, offering proximity to the United States, trade benefits under the USMCA, and a skilled workforce at competitive costs. With its growing economy and vibrant sectors like manufacturing, automotive, technology, and e-commerce, Mexico is ideal for startups, SMEs, and multinational corporations looking to expand into Latin America.

Cities such as Mexico City, Monterrey, Guadalajara, and Tijuana are the country’s main commercial hubs, offering strong infrastructure and global connectivity. Companies planning to register a business in Mexico can take advantage of favorable trade policies, tax incentives, and access to both North and South American markets.

This guide covers market entry options, company structures, registration steps, key documents, costs, compliance requirements, and Employer of Record (EOR) alternatives to simplify your expansion into Mexico.

Table of Contents

• Exploring Your Market Entry Options in Mexico
• Business Structures You Can Choose From
• Comparing Business Structure Options
• How to Choose the Right Business Model for Your Operations
• Step-by-Step Guide to Company Registration in Mexico
• Key Documents Required to Register Your Mexican Company
• Post-Incorporation Essentials You Shouldn’t Ignore in Mexico
• Additional Business Licenses and Registrations You Might Need in Mexico
• Timeframe to Set Up a Business in Mexico
• What Does It Cost to Incorporate a Company in Mexico?
• Obstacles Global Founders May Face While Setting Up in Mexico
• Incorporating as a Foreign-Owned Company: A Special Path
• Employer of Record: A Simpler Way to Hire in Mexico Without Incorporation
• Why Asanify is the Ideal Partner for Global Companies Entering Mexico
• Summary & Final Takeaways
• FAQs

Exploring Your Market Entry Options in Mexico

Foreign companies can enter Mexico in two primary ways:

Incorporating a Local Business Entity

Registering a Mexican entity is the traditional approach for companies seeking long-term operations, full control, and the ability to sign contracts locally. This involves filing with the Public Registry of Commerce and obtaining a Federal Taxpayer Registry (RFC).

Hiring Through an Employer of Record (EOR)

For companies that want to explore the market without incorporating, an Employer of Record provides a quick and compliant way to hire employees in Mexico. The EOR handles employment contracts, payroll, social security contributions, and tax compliance, while your company focuses on operations. This is ideal for pilot projects, market testing, or small distributed teams.

Business Structures You Can Choose From

Mexico offers several legal structures for foreign investors:

• Sociedad Anónima (S.A.) – Similar to a corporation; requires at least two shareholders; ideal for medium and large businesses.
  
• Sociedad de Responsabilidad Limitada (S. de R.L.) – Similar to an LLC; requires 2–50 partners; popular for SMEs and subsidiaries.
  
• Sociedad Anónima Promotora de Inversión (S.A.P.I.) – Flexible corporate structure often chosen by startups and companies planning to attract investors.
  
• Branch Office (Sucursal) – Extension of a foreign company; can operate in Mexico but does not create a separate legal entity.
  
• Representative Office – Limited to non-commercial activities such as market research or liaison functions.
  

Comparing Business Structure Options

Structure	Ownership	Liability	Taxation	Best For
S.A.	2+ shareholders	Limited	Corporate tax	Medium to large businesses
S. de R.L.	2–50 partners	Limited	Corporate tax	SMEs and foreign subsidiaries
S.A.P.I.	2+ shareholders	Limited	Corporate tax	Startups and investment-focused entities
Branch Office	Foreign parent	Parent liable	Corporate tax	Extensions of foreign companies
Representative Office	Foreign parent	Parent liable	None	Market research and liaison

How to Choose the Right Business Model for Your Operations

The best structure depends on your goals, liabilities, and market strategy:

• S. de R.L. is ideal for small and medium foreign-owned operations.
  
• S.A. suits larger companies planning long-term operations in Mexico.
  
• S.A.P.I. is recommended for startups seeking outside investors or venture capital.
  
• Branch Office works for companies expanding existing operations without forming a separate legal entity.
  
• EOR is perfect for market testing or hiring a small team without full incorporation.
  

Suggested Read: The Complete 2025 Guide to Labour Laws in Mexico

Step-by-Step Guide to Company Registration in Mexico

1. Choose the appropriate entity type based on your operations and investment plan.
   
2. Reserve your company name with the Ministry of Economy.
   
3. Draft and notarize the company bylaws (Acta Constitutiva) including shareholder information and share structure.
   
4. Register the company with the Public Registry of Commerce to receive legal recognition.
   
5. Obtain the Federal Taxpayer Registry (RFC) from the Mexican Tax Administration Service (SAT).
   
6. Open a corporate bank account in Mexico to deposit initial capital and handle business transactions.
   
7. Register with social security (IMSS) for employees and labor compliance.
   
8. Apply for municipal business licenses or sector-specific permits if required.
   
9. Comply with annual reporting and accounting standards in line with Mexican regulations.
   

The process usually takes 4–6 weeks, depending on document preparation and approvals.

Key Documents Required to Register Your Mexican Company

• Passports or IDs of all shareholders and directors
  
• Proof of residential address for all owners and directors
  
• Draft of company bylaws (Acta Constitutiva)
  
• Notarized powers of attorney (if shareholders are abroad)
  
• Taxpayer registration forms (RFC)
  
• Bank account documentation and capital deposit proof
  
• Any sector-specific permits or licenses
  

Post-Incorporation Essentials You Shouldn’t Ignore in Mexico

After incorporation, businesses must ensure compliance with these steps:

• Open and maintain a corporate bank account for transactions
  
• Register employees with IMSS for social security benefits
  
• File monthly and annual tax returns with SAT
  
• Keep accurate financial records and perform annual audits if required
  
• Renew local business permits and maintain labor law compliance
  

Additional Business Licenses and Registrations You Might Need in Mexico

Certain industries require additional licenses and permits:

• Import/export permits for trading businesses
  
• Environmental permits for manufacturing or industrial operations
  
• Health and safety permits for food, medical, or pharmaceutical sectors
  
• Municipal business operation licenses
  

Timeframe to Set Up a Business in Mexico

Step	Estimated Duration
Company name reservation	2–3 business days
Bylaws drafting and notarization	3–5 business days
Public Registry of Commerce filing	5–10 business days
RFC and tax registration	3–5 business days
Bank account setup and post-registration compliance	5–10 business days
Total Time to Register	4–6 weeks

What Does It Cost to Incorporate a Company in Mexico?

• Name reservation and registration: $100–$300
  
• Notary and legal fees: $500–$2,000
  
• Public Registry filing: $300–$800
  
• Tax registration and compliance setup: $200–$500
  
• Professional support (optional): $1,000–$3,000
  

Overall, incorporation costs range from $2,000 to $6,000, excluding optional licenses and permits.

Obstacles Global Founders May Face While Setting Up in Mexico

• Spanish-language legal and tax filings for all documentation
  
• Delays with notarization and apostille requirements for foreign documents
  
• Complex labor and social security regulations for foreign employers
  
• Banking setup challenges for non-resident shareholders
  
• Industry-specific permits and municipal approvals
  

Incorporating as a Foreign-Owned Company: A Special Path

Foreign companies in Mexico can form:

• Wholly owned S.A. or S. de R.L.
  
• Branch offices of foreign companies
  
• Representative offices for non-commercial activity
  

While Mexico allows 100% foreign ownership in most sectors, strategic industries like energy, telecommunications, and natural resources may have special rules or require government approval.

Employer of Record: A Simpler Way to Hire in Mexico Without Incorporation

Entering the Mexican market does not always require setting up a local legal entity. For many global companies, especially those exploring market potential or launching pilot projects, an Employer of Record (EOR) provides a fast and fully compliant way to hire employees in Mexico without the cost, time, and complexity of full incorporation.

From a legal perspective, the EOR acts as the official employer of your Mexico-based workforce. It manages employment contracts, payroll processing, tax withholdings, and social security contributions, while your company retains full control over daily operations, work assignments, and performance management.

This model is ideal for:

• Testing the Mexican market before committing to a full entity setup
• Running short-term or project-based teams for manufacturing, sales, or support
• Hiring remote employees across different Mexican states without separate registrations
• Quickly expanding into Latin America without the administrative burden of incorporation

Using an EOR also helps foreign companies overcome common challenges such as:

• Drafting Mexico-compliant employment agreements and offer letters
• Registering and contributing to the Mexican Social Security Institute (IMSS)
• Managing federal and state payroll taxes, including income tax (ISR) and social contributions
• Complying with statutory benefits such as vacation, profit sharing (PTU), and Christmas bonuses (Aguinaldo)

By leveraging an EOR, businesses minimize the risk of non-compliance, worker misclassification, and complex tax obligations, while achieving fast, cost-effective market entry into Mexico.

Suggested Read: Employer of Record Mexico: A Comprehensive Guide

Why Asanify is the Ideal Partner for Global Companies Entering Mexico

Asanify offers end-to-end solutions for international businesses expanding into Mexico, providing both full company incorporation and Employer of Record (EOR) services. For companies planning long-term operations, we manage the entire process:

• Registering entities like S.A., S. de R.L., or S.A.P.I.
• Obtaining the Federal Taxpayer Registry (RFC) and setting up tax compliance
• Handling payroll, IMSS registration, and social security obligations
• Managing ongoing HR compliance, accounting, and employee benefits
• Guiding companies through local labor regulations and annual reporting requirements

If you are not ready to incorporate, our EOR solution allows you to hire Mexican employees within just a few days. Asanify takes care of contracts, processing payroll, taxes, and social contributions, ensuring your team operates legally and compliantly without administrative overhead.

We have successfully helped clients across North America, Europe, Asia, and Latin America establish teams in Mexico efficiently and without risk. Whether you are a startup testing market demand or a multinational deploying a regional team, Asanify makes your Mexico expansion seamless and fully compliant.

Summary & Final Takeaways

Mexico in 2025 offers significant opportunities for global companies in manufacturing, automotive, technology, and services. Businesses have two primary options for market entry: incorporate a local entity or hire through an Employer of Record (EOR).

If your goal is to establish a long-term presence, raise capital, or manage local operations directly, forming an S.A., S. de R.L., or S.A.P.I. is the best approach. On the other hand, if you want rapid entry, market testing, or small team hiring without the administrative burden of incorporation, an EOR allows you to start operations immediately while staying fully compliant with Mexican labor regulations.

FAQs

Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant  or Labour Law  expert for specific guidance.