Legal forms of business in Mexico in 2026: the right structure for you

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You want to invoice clients, hire people or hold assets through Mexico. This guide compares the business structures available in 2026, what each costs and how it's taxed, and which ones you can really run from abroad.

Legal forms of business in Mexico in 2026: the key figures

Is this guide for you?

Read on if you…

• freelance or consult and wonder whether to incorporate in Mexico;
• want to set up a Mexican subsidiary or branch of a foreign company;
• plan to hire local staff or sign contracts with Mexican clients.

Probably not your case if you…

• live in Mexico but invoice only through an established foreign company with no Mexican presence;
• only hold passive investments with no business activity.

Which business structures exist in Mexico?

Sole trader (persona física con actividad empresarial)

You trade in your own name with your RFC. No company, no notary. You're personally liable for debts. Tax is either RESICO at 1% to 2.5% of gross, or the professional regime at 1.92% to 35% on net profit. Honestly? For most solo freelancers who are Mexican residents, this is the place to start.

S.A. de C.V.

The sociedad anónima de capital variable is the classic Mexican company. It needs at least two shareholders, a notary deed and a board or sole administrator. Shares can be transferred freely, which suits investors. "C.V." means capital can change without amending the bylaws.

S. de R.L. de C.V.

The sociedad de responsabilidad limitada has two to 50 partners holding quotas, not shares. Transfers need partner consent. US owners often prefer it, because it can be treated as a transparent entity for US tax.

S.A.S.

The sociedad por acciones simplificada is created online through the Ministry of Economy, free, in a day or two. It allows a single shareholder. But all shareholders must be individuals, and annual revenue is capped at about MXN 7 million. Above that, it must convert.

Branch and civil society

A foreign company can register a branch (sucursal) instead of a subsidiary. It's taxed as a permanent establishment at 30%. Professionals such as lawyers and architects often use a sociedad civil (S.C.), a non-commercial partnership.

How do the structures compare?

Small companies with revenue up to MXN 35 million can use RESICO for legal entities. It taxes profit at 30% but on a cash basis, which helps cash flow.

How do you set up a Mexican company?

1. Reserve the name. Apply online with the Ministry of Economy for name authorisation.
2. Sign the deed before a notary. A notario or corredor público drafts the bylaws and checks identities.
3. Register foreign investment. Foreign shareholders must register with the National Foreign Investment Registry (RNIE).
4. Register in the Public Registry of Commerce. The notary usually handles this.
5. Get the company RFC and e.firma. The legal representative attends SAT in person for the e.firma.
6. Open a bank account. Mexican banks usually want the legal representative in person.
7. Register with IMSS and the state payroll tax if you hire staff.

Want an outside view first? See Heavnn business setup and our guide to business expenses in Mexico.

Can you run a Mexican company from abroad?

On paper, yes. Foreigners can own 100% in most sectors. In practice, you need someone in Mexico. Banks, SAT and notaries want a legal representative with an RFC and e.firma who can show up.

Here's the bigger risk. A company is Mexican resident if its main administration or effective management is in Mexico. The reverse applies too. If you run a foreign company from your laptop in Mexico, SAT can say its management is in Mexico. Then the foreign company owes Mexican corporate tax at 30%.

The same goes for a permanent establishment (PE): a fixed place of business or a dependent agent in Mexico. A home office from which you sign contracts can create one. Before you move, read the guide on obtaining tax residency in Mexico.

Comparing jurisdictions? See legal forms in Paraguay and legal forms in Costa Rica.

Common mistakes (and what they cost)

• Incorporating too early → you pay notary, accounting and 30% corporate tax where RESICO would have cost 1% to 2.5%.
• Managing a foreign company from Mexico → SAT can treat it as Mexican resident or as having a PE, with back tax at 30%.
• No local legal representative → you can't get the e.firma, open a bank account or file on time, and fines pile up.
• Skipping the foreign investment registration → fines from the Ministry of Economy and trouble at the next capital increase.
• Forgetting PTU → employees can claim 10% of profit, with labour authority penalties on top.

Frequently asked questions

What is the most common company type in Mexico?

The S.A. de C.V. is the most common, followed by the S. de R.L. de C.V. Both offer limited liability, have no legal minimum capital and need at least two owners. The S.A. suits outside investors; the S. de R.L. is often chosen by US groups for tax transparency at home.

Can a foreigner own 100% of a Mexican company?

Yes, in most sectors. The Foreign Investment Law reserves or limits a few activities, such as some energy, media and transport. Foreign shareholders must register with the National Foreign Investment Registry. Coastal and border land needs a bank trust (fideicomiso) or a Mexican company to hold it.

Is there a minimum capital for a Mexican company?

No. Since 2009, the S.A. and the S. de R.L. have no legal minimum capital. Notaries often suggest a symbolic amount such as MXN 10,000 to 50,000. The S.A.S. has no minimum either but caps annual revenue. Banks may ask for more capital when you open an account.

What is the S.A.S. and who should use it?

The S.A.S. is a simplified company created online through the Ministry of Economy, free and fast. It allows a single shareholder, but all shareholders must be individuals and revenue is capped, around MXN 7 million. It suits small founders who live in Mexico, have an e.firma and want limited liability without a notary.

How are Mexican companies taxed in 2026?

Companies pay 30% corporate income tax on taxable profit. They also distribute 10% of adjusted profit to employees through PTU. Dividends paid to individuals or non-residents bear an extra 10% withholding. VAT is 16%, or 8% in border regions. States add a payroll tax, usually 2% to 4%.

Should a freelancer in Mexico open a company?

Usually not at first. A resident freelancer with low costs pays 1% to 2.5% of gross in RESICO, up to MXN 3.5 million. A company only makes sense with large costs, staff, outside investors or liability risks. Run the numbers each year as revenue grows.

Related guides

• Business expenses in Mexico
• Tax landscape overview of Mexico
• Tax incentives for expats and digital nomads in Mexico
• Specific taxes in Mexico
• Tax fraud regulations of Mexico
• Tax landscape overview of Panama
• All country tax guides

Sources

• Ministry of Economy (Secretaría de Economía)
• Chamber of Deputies – federal laws (LGSM, Foreign Investment Law, Income Tax Law)
• SAT – Servicio de Administración Tributaria
• Diario Oficial de la Federación
• PwC Worldwide Tax Summaries – Mexico: Corporate taxes

This guide is general information, not personalised tax advice. See how we research and review.