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Doing Business with Mexico
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The following text was provided by Santistevan Abogados S.C.  Doing business with Mexico suggests engaging in international trade directly from the home office. Doing business in Mexico suggests the additional step of establishing a physical presence in Mexico and regularly engaging in commercial activities.
The primary purpose of doing business with Mexico is to avoid, or at least minimize, involvement with the Mexican tax system and other areas of regulation such as Mexican labor laws and the social security system. On the other hand, those foreigners who need to establish more of a presence in Mexico may find that the additional business and geographic advantages of a permanent presence in Mexico outweigh the tax and regulatory burden. Doing Business with MexicoA foreign company can do business with Mexico from abroad in order to minimize the tax and regulatory consequences arising from the establishment of a permanent presence in the country. When structuring operations in this way, however, foreigners must be extremely careful to ensure that they do not create a "permanent establishment" in Mexico, as Mexican tax law considers the income derived by foreigners from such entities taxable. The Mexican Income Tax Law (ITL), when defining the concept of "permanent establishment" (Art. 2), considers taxable the income derived by foreigners from certain activities within Mexican territory. Generally, a foreign concern is deemed to have created a permanent establishment base in Mexico when it (1) establishes a place of business or (2) employs a subordinate agent with powers to enter into contracts in order to develop its entrepreneurial activities. A foreign company doing business with Mexico from abroad has traditionally used four basic commercial vehicles: (1) appoint a sales agent in Mexico; (2) appoint a commission (sales) agent (i.e. commercial intermediary) for the promotion of its goods or services; (3) enter into an agreement with an independent distributor in Mexico; or (4) license technology (for example in a franchise operation). Return to top |
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Business in Mexico: Types of Companies in Mexico
The Ley General de Sociedades Mercantiles (Corporate Law) recognizes as business entities the general partnership (sociedad de nombre colectivo), the limited liability partnership (sociedad en comandita simple), the limited liability company (sociedad de responsabilidad limitada), the stock corporation (sociedad anónima), the limited liability stock partnership (sociedad en comandita por acciones), and the cooperative (sociedad cooperativa). The LGSM regulates the operations of the above-mentioned companies, except for the cooperative which, due to its nature, is governed by a special law.
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| | Invest in Mexico: Neutral Investment
Neutral investment is a mechanism through which foreign investment can participate in certain reserved or specially regulated activities.
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The LIE defines neutral investment as investment in Mexican companies or in authorized trusts that will not be taken into consideration for determining the percentage of foreign investment in the capital stock of Mexican companies.
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| | Economic Activities in Mexico Subject to Restriction
As a general rule, there are no legal restrictions on foreign individuals and entities engaging in economic activities in Mexico, either directly or as partners or shareholders in Mexican companies.
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However, the LIE (Ley de Inversión Extranjera or Foreign Investment Law) specifies certain activities in which foreign investment is not allowed and others in which it is limited.
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Here we will discuss the activities that are reserved or subject to a specific regulation. We will also refer to the concept, regulation, and scope of neutral investment, a mechanism through which foreign investment can participate in certain reserved or specially regulated activities.
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| Canadian Chamber of Commerce in Mexico
The Canadian Chamber of Commerce in Mexico (CCCM) is a non-profit organization founded in 1982 by a prominent group of Canadian and Mexican companies. The mission of the CCCM is to promote and strengthen the commercial, financial and investment relationships between Canada and Mexico. The primary aim of the CCCM is to serve as a home for Canadian businesspersons in Mexico.
| | British Chamber of Commerce in Mexico
The BritCham represents not only British business interests but other European chambers of commerce as well, and is the perfect connection when it comes to facilitating business in Mexico. Their extensive network is also the best way to get into contact with other British and European nationals living, working and doing business in the country. Below we've presented an introduction and information on how to get in touch with the BritCham.
| | Business Practices in Mexico: The Basics
Are you conducting business in Mexico? Are you aware of the most significant cultural differences? Refer to this page for a quick education in Mexican dress code, negotiations and business lunches.
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