A foreign investor may incorporate a Mexican company and hold 100% of its capital in most economic activities. The process involves obtaining name authorization, executing the incorporation deed before a public notary, registering it with the Public Registry of Commerce, obtaining the tax ID and e-signature, and registering the investment with the National Registry of Foreign Investment.
What determines the right structure
Incorporating a company in Mexico is a defined procedure; what requires judgment is the decision that precedes it. Three questions shape the structure: what activity will be carried out — because that determines whether foreign investment restrictions apply — how the parent intends to govern the subsidiary, and what tax effects the chosen vehicle will have both in Mexico and in the investor’s home country. Answering those three before signing avoids costly restructuring later.
Foreign investment: the rule and the exceptions
The Foreign Investment Law starts from openness: foreign participation may reach 100% in most activities. The exceptions fall into three categories: activities reserved to the State, activities reserved to Mexican nationals or to companies with a foreigner exclusion clause, and activities subject to ownership caps or to a favorable resolution from the National Foreign Investment Commission. Determining which category the specific activity falls into — not the generic description of the business line — is the first step of the analysis.
The obligations that begin after incorporation
A company with foreign investment must register with the National Registry of Foreign Investment and file periodic reports on its corporate and financial situation. This is an ongoing obligation, not a one-time formality, and non-compliance is sanctionable. In practice the problem appears years later: when the group prepares a sale or a funding round, legal due diligence uncovers the missed filings and everything must be remedied under time pressure.
From deed to actual operations
A subsidiary does not operate on its incorporation deed. It needs a tax ID and e-signature, a legal representative with sufficient powers, a bank account — where anti-money-laundering policies require specific documentation on the group and its ultimate beneficial owners — an employment structure and, depending on the activity, sector permits, trademark registration and base contracts with customers and suppliers. Where executives will relocate from abroad, immigration filings run in parallel. Sequencing all of this from the start is the difference between operating in weeks or in months.
This content is informational and does not constitute legal advice. Each matter requires specific analysis.
Are you in this situation?
- Your company wants to operate in Mexico and you are unsure whether you need a subsidiary or a distributor is enough.
- You are being asked to choose an entity type without knowing the governance and tax implications of each.
- You do not know whether your activity is subject to foreign investment restrictions.
- You need to invoice in Mexico but have no tax ID and no legal representative in the country.
- The entity is already incorporated, but the investment was never registered and no filings have been made.
- You are about to sign contracts or open a bank account and are being asked for corporate documents that do not yet exist.
The cost of waiting
Choosing the wrong vehicle
The entity type drives internal governance, how interests are transferred, and tax treatment — including in the investor's home country. Fixing it later means restructuring.
Restricted or regulated activity
The Foreign Investment Law reserves certain activities and subjects others to ownership caps or prior authorization. Finding out mid-project stops the operation.
Missed registration duties
Foreign investment must be registered and periodically reported to the RNIE. Non-compliance is sanctionable and usually surfaces exactly when a sale or funding round is being prepared.
Banking and tax deadlock
Without a tax ID, an e-signature and a legal representative with sufficient powers, the company exists on paper but cannot invoice, bank or contract.
Activity and vehicle analysis
We verify whether the activity carries foreign investment restrictions and select between an S. de R.L. de C.V., an S.A. de C.V. or another vehicle based on governance, tax treatment and exit plans.
Name authorization and incorporation deed
Company name authorization, tailored bylaws — corporate purpose, management body, powers of attorney, foreigner admission clause — and execution before a public notary.
Registrations and tax onboarding
Filing with the Public Registry of Commerce, obtaining the RFC tax ID and e.firma, and any sector registrations the operation requires.
Foreign investment registration
Registration with the RNIE and a calendar for the periodic filings, so compliance does not depend on someone remembering.
Getting operational
Powers of attorney, bank account opening, base contracts, sector permits, employment structure and, where applicable, immigration filings for the executives relocating to Mexico.
We incorporate and operationalize subsidiaries of U.S., European and Asian companies, coordinating with their home-country counsel so the Mexican structure works with the group's. With an office in Houston and teams in Mexico City and Guadalajara, we handle both sides of the operation through a single point of contact.
Your questions, answered
Can a foreigner own 100% of a Mexican company?
Yes. The Foreign Investment Law allows up to 100% foreign ownership in most economic activities. Certain activities are reserved to the State or to Mexican nationals, and others are subject to ownership caps or to prior authorization from the National Foreign Investment Commission. Verifying the specific activity is the first step in the process.
Do I need to be in Mexico to incorporate?
Not necessarily. Incorporation can be carried out through an attorney-in-fact acting under a power of attorney granted abroad, duly apostilled or legalized and translated by an authorized translator. What does need to be decided up front is who the legal representative in Mexico will be and with what powers, since tax and banking steps depend on it.
How long does it take to set up a company in Mexico?
Incorporation and registration usually take days to a few weeks. What drives the real timeline are the steps that follow: tax ID and e-signature, bank account opening, and any sector permits the activity requires. Planning those from the outset is what prevents a company that is incorporated but unable to operate.
S.A. de C.V. or S. de R.L. de C.V.?
Both limit shareholder liability. The S. de R.L. de C.V. has simpler governance and a capped number of partners, and is often preferred by U.S. investors for its treatment under U.S. tax rules. The S.A. de C.V. is more flexible for transferring shares and bringing in new investors. The choice depends on the group structure and the medium-term plan.
Let us talk about your matter
Tell us what is happening and we will tell you whether it is a matter we can take on, what it would involve, and how the scope is defined.
A lawyer will review your matter and confirm the next step within 24 business hours.