Creating a company in Mexico that offers digital services may seem like an impossible task, but it is not. If you have the right information and the right advisors, you can start trading and generating returns in no time.
The process of starting your own on-line business involves formalities and red tape, which can be intimidating. But do not worry, we simplify this for you. Before we begin, you should also consider that the online business landscape for trade in Mexico is in the process of substantial tax and legislative modifications. Digital services tax reforms are recent and evolving, so having the right Mexican accounting firm monitoring this for you becomes essential.
Aspects to Consider Before Creating a Company in Mexico
Theoretically, the following topics are not considered as part of the process of creating a company. However, they are aspects that you need to take into consideration before starting the procedures. Having all this clear is of utmost importance before proceeding to creation of your business, whether for digital services or another enterprise:
- Business Model
- Trade Name
- Type of Legal Entity
These elements will impact on the process of incorporating a legal entity in Mexico as they need to be known prior to proceeding and because they may be the fundamental part of the operations of an already existing business.
The Business Model of your venture should be considered from a broad perspective, in this manner it will not limit its potential. If you are thinking about creating a company, you probably already have an idea of what product or service it will offer. Develop that idea not only for the immediate term, but also for the medium or long term. The intention is to ensure potential for growth.
Identify the Partners that will participate in the company. Providing their full names as it appears on official documentation, address and nationality will be required. Remember it is not necessary to include a Mexican National to create a legal entity.
You must also secure a source of Capital for your business as well as explain the origin of these funds. As a foreigner, you will need to justify the legitimacy of the origin of this capital.
Your company must have Trade Name. Preferably, before you commence any transactions, you should also consider creating a logo and registering a trademark.
In Mexico, there are 7 types of legal entities. Before registering, you must have already selected one. Consult a local lawyer for explanations on the differences:
- Public Limited Company
- Cooperative Society
- Society in Collective Names
- Simplified Joint Stock Company
- Limited Liability Company
- Simple Command Society
- Limited Partnership by Shares
Finally, the tasks of Administration are fundamental for the management and operation of an enterprise. Knowing who and how they will carry them out is necessary for an ideal start.
Procedures Necessary to Create a Company in Mexico
When you are ready to create a legal entity in Mexico that offers digital services, it will be time to carry out the necessary procedures in the following manner and order. Consider these steps to launch your venture:
- Authorization of use of trade name
- Incorporation of the company
- Trademark registration
- SAT (Tax) registration
- Notice of use of company name
- Registration at the Public Registry of Commerce
- Registration with required Government Authority
Authorization of Use of Trade Name
The first step is to communicate with the Ministry of Foreign Affairs to process the application with which you can create a company in Mexico. At this time, you can select the corporate name of your business. This is very important, because it is essentially its legal name. It is important to note the difference between the company name and the trade name. The first is the one you use for all legal procedures, while the second is the one you use in your marketing to make yourself known to the general public.
This will be the time to create a Charter for your company (known as the Constitutive Act). This is a notarized document that contains all the basic information to register your company: company name, shareholders, type of company, address and legal representative.
To ensure that the use of your trademark is exclusive to you and no one else, you will need to register your trademark. This procedure is carried out with IMPI, which is the Mexican Institute of Industrial Property. Through this registration, the name, logo and other trademarks used by your company be for your exclusive use.
SAT (Tax) Registration
Registering with the Tax Administration Service (SAT) is consequent to registering the company. With this procedure, you will obtain the Tax Id and your company will be registered in the Federal Taxpayer Registry.
Notice of use of Company Name
With the notarized document creating your company, you then notify the Ministry of Foreign Affairs that the application that you previously processed has been used and that the Constitutive Act of the company has been created.
Registration at the Public Registry of Commerce
The next government agency where you need to register your company is the Public Registry of Commerce. By completing this procedure, you will register both the company and, if applicable, its real estate.
Registration with IMSS
Next, you need to register your company with the Mexican Social Security Institute to register your employees, so that you can make the deductions and contributions required by law. It should be mentioned that this step is necessary although you do not have employees at this time. This is required for your company to operate regularly.
Registration with another Government Agency
You are almost ready to operate. You may be required to register with other government institutions, whether local, state, or national, depending on the nature of the products or services offered. For example, if your operations offer environmental services you may need to register with the Secretariat of Ecology and Environment.
Keep in mind that the help of a professional accounting team will make the task of carrying out this whole process much easier, from start to finish. MEXTAX, is ready to help you create a company in Mexico.