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Setting up a business in Mexico

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Setting up a business in Mexico is no simple task. It involves a lot of paperwork and bureaucracy, which means applying for identification numbers, visiting government offices, and filling out forms. It may even involve some degree of corruption, depending on where you want to establish the business and which government officials you encounter.

Therefore, asking locals for advice is the most important thing you can do before you even think about starting a business in Mexico. Talk to Mexicans and expats, and not only for insights into the process, but also to get an idea about the local business climate, including possible competition. For instance, do similar businesses exist? How will yours be unique?

There are differences in the process from state to state, but in general, you will need to satisfy these requirements.

The requirements

The owner of the business, or the business itself if it’s a partnership or corporation, will need an RFC number, which is a tax identification number necessary for paying taxes. The number comes from the SAT, the Servicio de Administración Tributaria (Taxation Administration Service), and you can apply for it online here.

The two basic types of taxpayers in Mexico are personas fisicas and personas morales, which correspond to real people (including workers and business owners), and partnerships/corporations. There are various sub-categories of these two basic categories, and it is important to understand which sub-category applies for your business.

To get the RFC, you need a CURP number (general identification number in Mexico), and to get a CURP number, you need to be a permanent or temporary resident of the country. You can read about the different types of visas in Mexico and learn how to apply for the CURP on this website (in Spanish).

Once you have the RFC, you’ll need to keep records of invoices and register your income and expenses. You can read more about these steps on this government webpage that’s all about opening a business in Mexico.

Another crucial requirement is the uso de suelo, a land use permit, which ensures that the place where you want to set up your business is in a commercial area, and not a residential area. You get it from the Secretaría de Desarrollo Urbano (Secretary of Urban Development), and there is a fee to be paid, and the amount depends on where you live—expect it to be at least 1,000 pesos (USD $55).

You’ll need the uso de suelo to apply for the business licence (licencia de funcionamiento), which is a complicated procedure which includes making an evacuation plan for the building, having the proper fire extinguishers, and putting up the proper safety signs. An official from the licensing department may come to inspect the building to make sure everything is correct.

It’s common for small businesses in Mexico to open and begin operating without the proper licence or while the licence is being processed. But as a foreigner, it’s a good idea to meet all the requirements for this licence before you open the business, in order to avoid potential problems.

Getting some help

If all this seems a little complicated (which it can be), then you can seek advice from the INADEM, the National Entrepreneur Institute. On their website (in Spanish), you can find a comprehensive guide to the process and information on all the paperwork, and a directory of companies that offer legal advice and other consultations.

 Useful links:

RFC number inscription from SAT
Getting a CURP
Steps to open a business in Mexico
INADEM, the National Entrepreneur Institute
Steps to open a business in Mexico City

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
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1 Comment
Majik333
Majik333
2 years ago

Does anyone know how the local ranchers would feel about a Canadian woman buying ranchland in Jalisco?

Reply

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