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Mexican Tax Law: Value Added Tax
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 A company doing business in Mexico will be obligated to pay Value Added Tax (VAT) when it carries out any of the following activities:
alienates or leases goods; renders independent services; or imports goods and/or services.
This tax shall be calculated by applying the general rate of 15% to the price of the goods or services. If residents in defined border areas of Mexico (North America and Central America) perform the foregoing activities, the applicable rate will be 10%. The VAT is charged to the taxpayer who acquires the goods or receives the services from the company. Therefore, the VAT must be stated separately on the invoice of the goods or services. Basically, the company shall pay to the tax authorities the difference between the VAT it has transferred to its clients or paid on the importation of goods and services from the VAT the company had paid to third parties during the course of business. However, if the Mexican company with an Export Incentive Program authorized by the Ministry of Economy, definitively exports such goods or services from Mexico, and such goods or services are utilized entirely outside of Mexico, the VAT shall be 0%. 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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