The Ultimate Guide to Forming an LLC in Mexico: 7 Important Steps You Need to Follow

The first stage in creating an LLC in Mexico involves making a decision about the legal structure of your business, with the options being a partnership or a sole proprietorship, but forming an LLC is recommended due to its ability to protect the company’s owners by separating their personal assets from the company’s assets; in Mexico, an LLC is known as a Sociedad de Responsabilidad Limitada, or S. de R.L.

The Articles of Organization are the legal document that establishes the objectives, organizational parameters and internal management policies of your LLC. While you have the option to create these documents on your own, it is advisable to consult an attorney to ensure compliance with Mexican laws. The Articles of Organization must contain the following information:

• The name and address of your LLC
• The names and addresses of the LLC’s members or partners
• The purpose of the LLC
• The amount of capital contributed by each member or partner
• The rules governing the distribution of profits and losses
• The powers and responsibilities of the LLC’s managers

You must submit your LLC’s articles of formation, company name, and member names to the Public Registry of Commerce in order to register it. The registration fee, which varies based on the state where you are creating an LLC, is another thing you must pay. Depending on the Registry’s workload, the registration process may take two to four weeks.

You need a tax identity number (RFC) from the Mexican Tax Administration Service (SAT) in order to run your LLC there. Additionally, you have to file federal and state tax returns for your LLC. Your LLC may be obliged to pay various taxes, including income tax, value-added tax (VAT), and payroll taxes.

Social security and other essential insurance must be offered to employees by all Mexican businesses. Moreover, you must get the required insurance coverage and register your LLC with the Mexican Social Security Institute (IMSS). For Mexican employees, the IMSS offers health insurance, retirement benefits, and disability insurance.

Depending on the nature of your business, you may need to apply for permits and licenses from federal, state or local agencies. For example, these permits and licenses may include health department licenses. Futhermore, liquor sales licenses, or environmental permits. Therefore, it is critical that you thoroughly research the required permits and licenses for your business before you begin operations.

You must have a Mexican bank account in order to run your LLC. The articles of incorporation, your tax identification number, and other pertinent paperwork must be sent to the bank. You’ll also need to present identity papers to the bank, like a passport or Mexican driver’s license.

In Latin America, particularly Mexico, Ongresso is a professional employer organization (PEO) that specializes in business creation and legal representation. They can guide you through the administrative and legal procedures involved in establishing an LLC in Mexico. Ongresso can make sure that your business complies with Mexican legal requirements. In addition, a team of legal and accounting professionals at Ongresso can give you the direction and assistance you need at every stage of the procedure. With Ongresso, you can concentrate on expanding your business while they take care of the administrative and legal requirements of forming your company.

Contact us now for a professional consultation.