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Business Permits & Incorporation for Foreigners in Mexico City

Good to know

Good to Know

  • No Mexican co-owner or local sponsor is legally required — 100% foreign ownership is allowed in most sectors, with a short list of exceptions (e.g. certain energy, telecom, and airline/education activities that cap foreign ownership or require special permission).
  • You still need at least two shareholders/partners on paper for both common entity types, but one person can legally hold almost all the equity (e.g. 99%) while a second holds a nominal stake — this is a formality, not a real ownership split.
  • You'll need a legal representative who is either a Mexican national or a foreigner with legal residency in Mexico — this person doesn't need to be an owner, but is required to physically attend SAT to get the company's tax ID (RFC) and digital signature (e.firma).
  • Budget real slack in your timeline around the SAT appointment for RFC/e.firma — multiple sources independently flag this as the step most likely to stall the whole process, sometimes by weeks.
  • If any foreign capital is involved, register with the RNIE within the required window after incorporation — missing this deadline can trigger a fine.
  • Most foreign founders in Mexico City hire a local notary and/or bilingual corporate lawyer rather than doing this alone, since all filings are in Spanish and mistakes in the incorporation deed can create lasting compliance headaches.
  • If you're a foreigner just invoicing a handful of overseas clients as a solo consultant, most people start as a persona física rather than forming a company — it avoids notary costs and minimum capital, but do factor in that you need the correct immigration permission (residency plus independent-activity authorization) before SAT registration is legally clean.
  • RESICO's very low 1-2.5% ISR rate sounds great, but it explicitly excludes certain foreign-resident scenarios and related-party situations, so don't assume you automatically qualify just because your income is under the threshold — confirm your specific residency and business structure with a Mexican accountant (contador) first.
  • Mexico's invoicing system (CFDI) is mandatory and heavily digitized — you cannot legally bill a client, deduct an expense, or even reliably open some business bank accounts without a functioning RFC and e.firma, so set these up early rather than after you start earning.
  • A persona moral (company) gives you liability protection that a persona física structure does not, which matters if you're taking on contracts, hiring staff, or holding significant assets in Mexico.

Corporate Entity Persona Moral

Corporate Income Tax Isr
30 MXN (PERCENTAGE, NOT A FIXED SUM)
VAT Iva
Standard IVA (VAT) is 16% on most goods and services; a reduced 8% IVA stimulus can apply to qualifying transactions in the northern border region, which does not include Mexico City.
Entity Types
Most common vehicles for foreign-owned operations are the Sociedad Anónima de Capital Variable (S.A. de C.V.), the simpler Sociedad por Acciones Simplificada (S.A.S.), and the Sociedad de Responsabilidad Limitada (S. de R.L.). A foreign parent can also register a branch (sucursal) of a foreign corporation instead of incorporating a new local entity.
Dividend Withholding
Profits distributed out to non-resident shareholders face an additional 10% withholding tax on top of the 30% corporate ISR already paid, unless a bilateral tax treaty reduces the rate.
Non Resident Specific
A foreign company without a permanent establishment in Mexico is generally taxed only on its Mexican-source income, typically via withholding on dividends, interest, royalties, service fees, or capital gains paid to it — this withholding-only treatment is what a branch/permanent-establishment structure forfeits, since a branch is taxed like a full resident company on Mexican-attributable profit.
Other Recurring Taxes
State payroll tax (ISN) of roughly 1-3% on salaries paid (Mexico City has its own local payroll tax rate), plus municipal property tax (predial) if the company owns real estate, and a Real Estate Acquisition Tax (ISAI) if it buys property.

Filing Obligations

  • Register with SAT for an RFC (federal taxpayer ID) and obtain an e.firma (advanced electronic signature) before commencing operations.
  • Make monthly provisional ISR payments and file monthly IVA returns, both generally due by the 17th of the following month.
  • File the annual ISR return for the prior fiscal year by 31 March, attaching financial statements and a reconciliation between book and taxable income.
  • Issue CFDI (digital tax receipts) for every transaction — invoicing without CFDI is not legally valid in Mexico.
  • Maintain electronic accounting (contabilidad electrónica) and submit trial balances/chart of accounts to SAT on a periodic basis.
  • Report to the National Foreign Investment Registry (RNIE) if foreign participation in capital, receivables, or payables with foreign related parties exceeds MXN 20 million in a quarter — this is a distinct obligation from tax filing and specifically targets foreign-owned entities.

Individual Persona Fisica Options

Overview
Freelancers and solo operators in Mexico always register as a persona física (individual taxpayer) rather than forming a company, and choose among a few SAT tax regimes depending on income level and activity type.
Registration Steps
Register with SAT for an RFC, activate e.firma and the tax mailbox (buzón tributario), then select the applicable regime online; freelancers can, in some cases, combine regimes (e.g. professional-activity income plus digital-platform income) if their SAT registration and invoicing reflect both accurately.
Legal Prerequisite For Foreigners
A foreigner must hold valid Mexican residency with permission for independent economic activity (temporary residency with a 'lucrative activity' or work permit, or permanent residency) and must separately request permission from the immigration authority (INM) to work independently as a freelancer before registering with SAT under any persona física regime.

Resico Simplified Trust Regime

Isr Rate
Preferential fixed ISR rates from 1% to 2.5% on income actually collected, depending on income tier, with no personal expense deductions allowed.
Eligibility
Available to individuals with total annual income up to MXN 3,500,000 who earn through business activity, professional services, or leasing.
Administrative Burden
Significantly simplified: SAT largely pre-calculates the return, monthly filings are simple, and in most cases there is no separate annual declaration required.
Income Threshold Local
MX$3,500,000
Important Caveat For Foreigners
RESICO explicitly excludes company shareholders/partners, related parties, and non-residents of Mexico who maintain one or more permanent establishments in the country — so a foreigner needs genuine Mexican tax residency and must not fall into these excluded categories to use this regime.

Actividad Empresarial Y Profesional Regime

Isr Rate
Progressive ISR from roughly 1.92% up to 35%, calculated on net income after deducting documented business expenses.
VAT Iva
16% IVA generally applies and must be charged, declared, and paid monthly.
Eligibility
No income cap — required once income exceeds the RESICO threshold, or chosen by higher-earning freelancers/consultants and professionals such as lawyers or doctors.
Administrative Burden
Requires monthly and annual declarations, bookkeeping, and issuance of CFDI for every invoice; a client that is a persona moral (company) must withhold 10% of the payment for professional services and remit it to SAT on the freelancer's behalf.

Incorporation Process And Requirements

Shareholder Minimums
Mexican corporate law requires at least two shareholders/partners for the two entity types foreigners typically use. One shareholder can hold the overwhelming majority of shares (e.g. 99%) while a second holds a token stake, so this does not dilute real control.
Foreign Investment Registration
Companies with any foreign shareholding must register with the Registro Nacional de Inversiones Extranjeras (RNIE), administered by the Secretaría de Economía; missing the filing window can trigger a fine.
Local Partner Or Sponsor Requirement
None required for ownership. Mexican law lets foreigners own 100% of a company in most sectors — a source explicitly citing Mexico's Foreign Investment Law notes that foreigners can own 100% of a business in Mexico and that there is no need for a foreigner to partner with a Mexican citizen. Separately, however, a legal representative (a Mexican national, or a foreign national who is a legal resident of Mexico) must be appointed to handle tax registration and government interactions — this is an administrative/agency role, not a required equity partner.

Typical Cost

Notary Fees
MX$20,000
Public Registry Filing Fee
MX$2,000
Optional Local Lawyer Support
MX$20,000
Typical All In Range Without Lawyer
MX$16,000
Typical All In Range With Lawyer High
MX$58,000
Typical All In Range Without Lawyer High
MX$28,000
Notes
Figures cover notary, Public Registry, and SAT/RFC steps for a standard S.A. de C.V. or S. de R.L. de C.V. Several sources instead quote all-in totals directly in USD in the roughly $2,000–$10,000 range once legal/advisory fees, apostille, and translation of foreign documents are included — the wide spread mainly reflects whether a full-service law firm handles everything versus a founder using a notary directly.

Typical Timeline

Fast Case
2-4 weeks if the founder is efficient, shareholders' documents are already in order, and there are no delays getting a notary or SAT appointment.
Slow Case
Up to 8-12 weeks when foreign shareholder documents require apostille and certified Spanish translation, or when SAT appointment queues ('Fila Virtual') are backed up.
Typical Case
4-6 weeks is commonly cited when factoring in notarization, Public Registry filing, RFC/e.firma registration, and opening a bank account.
Known Bottleneck
Securing an in-person SAT appointment for the RFC and e.firma is repeatedly flagged as the single biggest source of delay in the whole process.

Common Entity Types

  • Sociedad Anónima De Capital Variable (S.A. De C.V.)
    Minimum Capital
    No fixed statutory minimum in practice, though one source cites a commonly used minimum capital figure of MXN 50,000.
    Description
    Mexico's rough equivalent of a US corporation. It is a stock corporation that issues negotiable shares, requires a minimum of two shareholders, and is generally preferred for larger operations or when planning to raise outside investor capital.
  • Sociedad De Responsabilidad Limitada De Capital Variable (S. De R.L. De C.V.)
    Minimum Capital
    No fixed statutory minimum commonly cited.
    Description
    Mexico's rough equivalent of a US LLC, limited to a maximum of 50 partners, with liability limited to each partner's investment. It has fewer formalities than an S.A. (no mandatory statutory auditor) and is often favored by smaller foreign-owned businesses and US owners for its US 'check-the-box' tax treatment.

Core Incorporation Steps

  • Appoint a legal representative in Mexico (Mexican national or legally resident foreigner) — required before or during the process since this person signs for tax and registry procedures.
  • Reserve/obtain approval of the company name from the Secretaría de Economía (Ministry of Economy), in parallel checking trademark availability.
  • Draft the bylaws/articles (corporate purpose, shareholder details, capital structure, management) and have a Notary Public formalize them into a notarial deed (escritura constitutiva).
  • File the notarial deed with the Public Registry of Commerce (Registro Público de Comercio) in the state of the company's domicile — this is what gives the company legal existence.
  • Register the company for a Federal Taxpayer Registry number (RFC) with the Servicio de Administración Tributaria (SAT); the legal representative must attend this in person with the notarized deed and proof of address, and separately obtain the company's e.firma (digital signature).
  • Register the entity — if it has foreign investment — with the Registro Nacional de Inversiones Extranjeras (RNIE / National Registry of Foreign Investments), generally required within a set number of business days of incorporation.
  • Secure a fiscal/registered address in Mexico and open a Mexican corporate bank account (requires the RFC, notarial deed, and shareholder/legal-representative ID).

Official Government Resources

  • Secretaría de Economía (company name approval, RNIE foreign investment registration): https://www.gob.mx/se
  • Servicio de Administración Tributaria / SAT (RFC tax registration, e.firma): https://www.sat.gob.mx
  • Manual of Procedures to Invest in Mexico (foreign investment rules): https://www.gob.mx/se

Freelancer Vs Company Comparison

Liability
Persona física (freelancer/sole proprietor): unlimited personal liability — the individual's own assets answer for business debts. Persona moral (company such as S.A. de C.V. or S.A.S.): liability limited to capital contributed.
Switching Regimes
Moving from persona física to persona moral (or between tax regimes) is possible but must be justified to SAT with a genuine change in economic activity or legal status — it isn't a purely elective same-day switch.
Startup Formalities
Persona física: no notarized incorporation deed or minimum capital needed — you can start simply by registering with SAT. Persona moral: requires a notarized articles of incorporation (acta constitutiva) before a notary public, its own RFC, and share capital; the S.A.S. variant can be formed by a single person with capital starting from as little as MXN 1, making it a lighter-weight company option than a traditional S.A. de C.V.
When A Company Becomes Worth It
Forming a persona moral typically makes sense once annual income exceeds the RESICO cap, once formal shareholders/investors need to be brought in with real equity stakes, or when clients require contracting with a corporate entity rather than an individual; it also isolates personal assets from business risk, which a persona física structure cannot do.
AI-generated estimateData refreshed July 2026

This section has no cited sources.

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Data last updated July 2026 · Verify anything important.