Launching Your Business & Building Your Team
Launching a business in Mexico involves navigating a complex landscape, but with the right team and through preparation, success is not only achievable but sustainable. Building a robust team, including a Mexican law firm specializing in corporate law and foreign investors, is the first step. This team will draft the company’s bylaws, ensuring compliance with Mexican law and facilitating proper registration with the National Register of Foreign Investments. Addressing the needs of partners and operations is essential in these bylaws.
The next crucial steps involve registering with the SAT (Mexican tax authority), obtaining a tax ID number, and securing a FIEL (electronic signature) for official digital invoicing. Additionally, opening a corporate bank account, registering for product import or export, and hiring a customs broker (if necessary) are critical components of the process.
Hiring an accounting firm in Mexico is highly recommended. It is worth noting that, unless your company has undergone the appropriate immigration processes to hire foreigners, all salaried employees must be Mexican nationals.
Navigating the Tax System
The entire process of incorporation, SAT registration, and opening a bank account may take up to two months, considering that obtaining the SAT appointment could take more than 6 weeks. However, if managed properly, this initial time investment is critical for the long-term sucess of your business in Mexico.
Mexican tax law requires corporations file monthly declarations with SAT (Servicio de Administración Tributaria), Mexico´s tax authority. It also requires that those declarations begin the same month that the company is incorporated, even if there are no income or expenses. For example, if the official incorporation date of your business is March 13, 2024, your accountant will file your monthly declarations starting with March 2024. If you are not operating and have no income and no expenses, they file your declarations `in zeros´. This will keep your status with SAT current and avoid any late fees or fines for not properly filing.
Consequences of Improper Accounting & Filing
During 2023, SAT imposed a significant number of fines related to the failure to comply with this requirement, as established in Article 28 of the Federal Fiscal Code (CFF). Fines are being imposed for non-compliance to the submission of Electronic Accounting, so taxpayers must remain vigilant. Fines for the fiscal year 2023, under current laws, can amount up to $21,000 pesos for failing to submit Electronic Accounting. There are cases where fines of 5,000 pesos per period have been imposed for non-compliance, with the added risk of facing a review or audit by the SAT.
Considering the tax and legal aspects for day-to-day operations is crucial. Proper legal documentation is vital, serving as a defense in case of audits by the Mexican tax office and ensuring legal corporate compliance.
We Can Help
At Mextax and Mexlaw, our experienced team is well-equipped to assist you in every step of the process, providing the necessary knowledge and expertise to help your business succeed in Mexico. Contact us for more information on how we can support you and your venture in Mexico.
