Set-up Your Company in Mexico
Although company formation in Mexico is generally a straight-forward process, expert knowledge in local laws and regulations is necessary to ensure no mistakes are made. To register a company in Mexico, companies must follow several steps and procedures provided by the Ministry of Economy, such as enrolling with the National Worker’s Housing Fund (INFONATIV) and the possibility of a quick set-up of your business through the Expedite Business Start-Up System.
Companies can focus on their business goals and integrating into the market while NNRoad takes care of legal requirements and incorporation. Our experts can ensure that your company is in compliance with local rules.
Business entities you can open in Mexico
1) Simplified Shares Company (SAS)
The newly conceived SAS structure is a product of the reforms carried out in 2016, specifically to the General Law of Commercial Companies. These reforms represent an effort by the Mexican government to encourage investment from foreign companies and even eventual setup in Mexico by foreign companies.
Some of the characteristics of the SAS are:
- A company formation process has been further simplified and made more cost-effective. SMEs will find this process to be an ideal method of entry into the Mexican market.
- A downside to this method of entry is that the SAS structure was formed to appeal to SMEs, which is why there is a maximum yearly permissible profit of MXN$5,000,000 (converting to about USD$265,000). For this reason, multinational corporations may not find this method to be feasible, although it may still be the perfect method of expanding for SMEs.
2) Limited Liability Company
Although not as popular as Stock Corporations, the Limited Liability Company is still the second most popular setup method in Mexico. LLCs follow some of the same basic guidelines for shares as Stock Corporations. Some of the differences will be listed below:
- SMEs find LLCs to be the most feasible method of company formation. The initial deposit is very low.
- Another distinguishing feature of the LLC is that there is no need to pay corporate taxes since taxes will be paid through the tax returns of individual members.
- As suggested by the use of ‘limited liability’ in the name, the assets of each individual member are protected, with members-only being liable for the shares they own in the company.
3) Stock Corporation
Also known as S.A de C.V. – Sociedad Anonima de Capital Variable (Stock Corporation) is the most popular structure for corporations setting-up a presence in Mexico.
- The company’s overall value will be divided into shares that will then be protected by the use of creditors.
- With no limits to the number of shareholders able to invest in Stock Corporations in Mexico, raising the capital necessary for operation (estimated at USD$3,500) should not be a concern.
- Although it is true that Stock Corporations will face more administrative challenges, the current structure allows for these types of entities to grow exponentially in terms of size and profit.
Our Company Formation Service Includes:
- Confirm the selection of a business entity type.
- Advise with the initial capital amount, if applicable.
- Assist with the selection of entity name and request for use of the business name.
- Request appropriate apostilles/legalizations.
- Assist with the identification of key persons in the entity and provide the public deed (including initial shareholder structure) with the Public Registry of Commerce.
- With respect to foreign company investment, assist with the registration with the Mexican National Registry of Foreign Investment.
- Assist with the drafting of local articles of incorporation and by-laws and the execution of articles of incorporation with the notary and formal registration of the company.
- Request Mexican Company’s Government e-signature.
- Request Mexican Tax Identification Number.
- Assist with the Opening of a Corporate Bank Account.
- Assist with Mexican Employee Social Security Registration.
PEO/Employer of Record in Mexico
Hire employees in Mexico while NNRoad handles all employer liabilities. No local entity needed.
Hiring employees in Mexico can be a tedious task but with employee leasing, hiring employees in Mexico is simple and straightforward. NNRoad offers a PEO service in Mexico. PEO is a model of co-employment where we assume administrative responsibility for your employees, allowing you to focus on your core business.
Through NNRoad, companies can rest easy because we will act as the employer of record for your company, therefore hiring employees on your behalf and taking care of all the HR administrative needs. You direct the employees' day-to-day work and can focus solely on growing your business in Mexico.
- Legally hire local and foreign employees without a legal entity established in Mexico.
- NNRoad becomes your in-country employer of record for dispatched employees in Mexico. While you will still be responsible for the management of your employees.
NNRoad's PEO/EOR Service in Mexico Includes:
- The hiring of and termination of employees/local labor contracts (contract administration - engagement, extension termination and conversion to permanent hire, confidentiality agreement).
- On-boarding and off-boarding employees following local law practice.
- Complete payroll solution and statutory benefit administration.
- Employee management – employee handbook, employee record retaining, timekeeping, bonus and allowance management, expense and claims, and leave employee database management accordingly to the local law.
- Mandatory social security insurance compliance according to the local laws.
- Advisory of fringe benefits that are given in their field for employees, for example, major medical insurance, life insurance, and car, etc.
- Working VISA application assistance, if needed.
- Local individual income tax reporting, if needed.
Payroll Outsourcing Solutions in Mexico
NNRoad Handles All Your Payroll & Benefits Administration in Mexico
Payroll and benefits administration in Mexico can be complex. For example, companies with local employees or foreign staff should note several regulations put forth by the Mexican government. Mexico has different tax schemes dependent on whether a foreigner is considered a resident in Mexico or a resident abroad. In order to streamline payroll, NNRoad can act as the HR department for your company and ensure compliance with Mexico’s payroll structure, including required registration and tax paperwork.
NNRoad’s Payroll and Benefits Services in Mexico Includes:
- Registering the necessary company and personnel information for payroll calculation in the payroll software and system.
- Calculation of gross salary, salary deductions (e.g. social insurances, unpaid leaves, etc.), and net salary based on information provided by the Company including irregular payments such as incentive/bonus, commission, allowance, severance, retirement payment, etc.
- Pro-rata calculation for people who join/resign.
- Payroll disbursement - Issuing payment notice to the Company for payroll distribution to employees (E-Paystubs Delivery (CFDI) and employee’s expense claim according to the Mexican IRS laws.
- Calculation and contribution of (1) mandatory social security (2) saving fund (if applicable), and (3) other benefit plans (i.e. Infonavit (Housing) Deductions).
- Year-End Adjustment and Annual Declaration.
Following the correct accounting procedures in Mexico without error can be a difficult task, leading to more and more companies outsourcing their accounting tasks. Companies would benefit from the assistance of our accounting, bookkeeping, and tax services when expanding in the Mexican market. With years of experience in the field of accounting and taxation, our experts will ensure a smooth transition into the Mexican business environment.
- Request bank statements, purchase orders and invoice copies from the client.
- Perform reconciliation of cash flow with provided documentation.
- Preparation of monthly and yearly financial reports.
- Invoice Management.
- Financial Audit, if needed.
- Annual tax return preparation and filing.