Doing Business in Mexico: A Foreigner’s Guide (2026)
Mexico · Step by Step
Key Facts
- Foreigners can own 100%. Most sectors allow fully foreign-owned companies; only a short restricted list doesn’t.
- Two main vehicles. The S.A. de C.V. (corporation) and the simpler S. de R.L. (LLC-style) — most small foreign businesses choose the latter.
- The solo route. Freelancing as a persona física under your RFC, with the simplified RESICO tax regime, skips incorporation entirely.
- The real hurdles. The corporate bank account and payroll obligations — not the incorporation itself.
- Non-negotiable. Residency with work permission, and a good contador from day one.
Plenty of expats arrive as employees or retirees; a growing number arrive to build something. Doing business in Mexico as a foreigner is more open than its reputation — full foreign ownership is normal — but the order of operations matters. Here is the step-by-step, from choosing a vehicle to your first payroll.
Step 1: Fix your immigration status first
Before any company exists, your own papers must permit work: temporary residency with work permission, permanent residency (work rights automatic), or the new sponsored specialized-talent route if a Mexican entity is bringing you in. Owning shares doesn’t strictly require residency — but actively running the business does, and banks won’t open accounts for ghost directors.
Get the immigration step from earlier in this series right, and everything downstream simplifies.
Step 2: Choose the vehicle
For a company, two forms dominate. The S. de R.L. de C.V. is the LLC-equivalent — flexible, fewer formalities, recognised by US tax rules for pass-through elections — and fits most small and service businesses.
The S.A. de C.V. is the classic corporation, suited to bigger plays and outside investors. Both need a minimum of two partners (a spouse or trusted second works), and both are born at the notario: name authorisation, bylaws, incorporation deed, public-registry inscription.
With documents ready, incorporation runs days to a few weeks. The solo alternative: skip the company and operate as a persona física con actividad empresarial under your personal RFC — freelancers and consultants thrive there, often inside the simplified RESICO regime with its famously low rates at modest revenue.
Step 3: Survive the boring trio — RFC, bank, books
The company needs its own RFC from the tax authority (an appointment with the incorporation deed), then the step veterans warn about: the corporate bank account. Banks’ compliance reviews of foreign-owned newcos are slow and document-hungry — expect weeks, bring everything twice, and consider the fintech business accounts many startups use as a bridge.
From the first invoice, electronic invoicing (facturas) is mandatory and your contador files monthly declarations whether you earned or not. The accountant is not optional in Mexico; a good one costs modestly and replaces a department.
Step 4: Hire like you mean it
Employees change everything: registration as an employer with IMSS (social security), payroll taxes, the December aguinaldo bonus (a legal 13th-salary minimum), vacation premiums, and the annual PTU profit-sharing obligation. Mexican labour law protects workers strongly and severance is real money — structure roles, contracts and any terminations with professional advice, not templates.
Many small foreign businesses start with contractors and a payroll provider before hiring directly; with nearshoring booming and the World Cup spotlight on, the talent market is competitive but deep.
Frequently Asked Questions
Can a foreigner own 100% of a Mexican company?
Yes, in the vast majority of sectors. Only a short constitutional list (certain energy, transport and media activities) restricts foreign ownership.
S.A. de C.V. or S. de R.L.?
Most small foreign businesses pick the S. de R.L. — simpler, flexible, and friendly to US pass-through tax elections. The S.A. suits larger structures and outside investors.
Both need two partners minimum.
Can I just freelance instead of incorporating?
Yes — register as a persona física with business activity under your RFC, often in the simplified RESICO regime. It’s the lightest legal way to operate solo.
What’s the hardest part in practice?
The corporate bank account (slow compliance for foreign-owned newcos) and employer obligations (IMSS, aguinaldo, profit-sharing). Incorporation itself is the easy week.
Do I need an accountant?
Effectively yes — monthly declarations and mandatory e-invoicing make a contador the first hire, even for a company of one.
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