How to Form a Company in Mexico and How to get Permanent Residency
As foreign companies increase investing in Mexico, we are going to take a step back and have an overall look at how to form a company and receive permanent residency. This article offers you the key to a successful company formation in Mexico and ways to obtain your legal status through it.
During the two past decades, Mexico has been working hard in opening its economy to foreign trade and investment. As of today, Mexico holds more than 25 bilateral free trade agreements around the world. As business opportunities are growing, a lot of effort has been put forward to simplify the administration as much as possible in order to facilitate the inflow of foreign entrepreneurs and investors.
On the other hand, the foreign ministry has been working along this same policy line, simplifying the process of visa applications through the 2012 Immigration Reform Act. First, we will go over the steps required to form a company in Mexico and then we will spend the second part of this article outlining the process for foreigners to receive permanat residency through company formation.
8 Steps to Form your Company in Mexico:
- Register your company’s name:
First things first. In order to register the name of your company, you will have to obtain authorization from the Ministry of Foreign Affairs (Secretaría de Relaciones Exteriores). You should receive it in no more than 2 working days. The application will cost you MX$ 640 (US$ 35).
- Apply for a tax registration number:
This is relatively simple, all you have to do is consult a public notary assigned by the government. You will be asked to sign the incorporation deed before receiving your tax registration. This should take you a maximum of 2 days, and it will cost you MX$ 9,000 (US$ 500)
- Register your incorporation deed:
Register your incorporation deed with the Public Register of Commerce. You will need to wait 17 days to receive your confirmation. Registering costs (US$ 80).
- Register for your tax ID number:
You will receive your tax ID number by simply registering with the Ministry of Finance and Credit (Secretaría de Hacienda y Credito Público). This will take you 1 to 3 days.
You now have to register your company with the Mexican Social Security (Instituto Mexicano del Seguro Social). You will have to open individual retirement savings accounts for every one of your future employees. This should normally take you 2 to 5 days.
- Register your company’s account:
The next step is indeed to register for payroll tax with the local tax administration which is the Secretaría de Finanzas del Gobierno del Distrito Federal). This is if you are setting your company in Mexico City. It will take you 1 day.
- Register with the National Business Information Registry:
Before the last step! Register with the SIEM (Sistema de Informacíon Empresarial Mexicano) which is the institution comprised of a complete registry of all the existing companies in Mexico. The cost to register depends on the number of employees you are willing to employ.
- Declare your company with the National Institute of Statistics:
In order for your future business achievements to be included in national statistics, you have to register with the National Institute of Statistics (Instituto Nacional de Estadística y Geografía)
Now that you know how to set your business off in Mexico, you will need to apply for the correct visa in order to have the right to exercise your profession.
How to Apply for a Work Visa in Mexico:
The temporary residency visa with permission to work:
This visa is the most common for foreigners who want to live in Mexico. It gives you the right to work, study and open a business in Mexico.The temporary visa permits you to open a Mexican Bank account in your name, an essential necessity if you’re planning on doing business.
This visa has a validity period of one year and can be renewed. It is ideal for those who want to live and work in Mexico temporarily.
The permanent residency visa:
The permanent residency visa is very similar to the temporary visa, the only difference being that after the fourth renewal of the temporary visa, you can apply for permanent residency. So this visa is particularly suited for foreigners who are expecting to live in Mexico for four years or more, or, in other words, for people who are determined to settle down permanently in Mexico. With the permanent residency visa, one can work, study and run their business freely for an unlimited period of time.
It is important to note that any permanent resident holder will not be allowed to be out of Mexico for more than 18 months over 5 years. The residency will be withdrawn in such case.
The process of applying for permanent residency will take between 1 to 6 months to be processed after submission of documents. Our advice would be for you to leave as much time as possible to apply, as many applications are rejected because of missing documents or other slips of the sort.
Documents needed for visa applications:
- Official immigration application form filled out and signed.
- Original passport and copy.
- Original immigration card. This is the card that you filled out on the plane and presented when you passed through customs. This is officially called the FMM form. Make sure you keep this safe as you will be fined if you lose it.
- Original and copy of proof of residency. This can be any utility bill where you reside, which can be provided by your landlord.
- Seven passport-style photos of 2.5 x 3 cm. Four should be headshots and three right-sided profile shots without glasses, jewelry or makeup, with a white background.
- As an independent professional or business investor, you should have a written letter in Spanish, addressed to the INM. This letter will request the issuance of the temporary residency visa and will state the purpose of your stay and the activities you will conduct.
Once you have gathered all the paperwork and turned it in, they will give you a document with a username and password so you can follow the application process online. If you are applying for your visa in Mexico City, you will have to go to the National Institute of Immigration, located in Polanco (Distrito federal). If you are elsewhere in Mexico, please click here to access the full list of migration offices in Mexico.
General tips to facilitate your visa application in Mexico:
- Call the office in advance in order to be sure you will come prepared.
- Try and visit the office at an off-peak time as immigration offices are often very busy. The best tip we can offer is to head there early in the morning.
- Bring copies of all your documents as the office may not have a photocopier for public use.
Biz Latin Hub is looking forward to this upcoming year as foreign investment grows exponentially in Mexico. It is not uncommon for visa applications to be rejected by the immigration office, neither is it abnormal for foreigners to encounter numerous difficulties when forming companies in Mexico. Our experienced team of local and expatriate professionals can guide you through whatever immigration processes you need for your unique case and can also help you turn the 8 steps of forming a company into just 1, making the company formation process much easier. For more information, do not hesitate to contact our country manager Alex from Mexico at [email protected] or visit our website at www.bizlatinhub.com.
If you want to learn more about how to apply for a visa in Mexico and live in the country legally, watch this video!