So you’re ready to do business in Mexico. There are several ways for foreigners to operate a business in Mexico. Foreigners can establish a Mexican company or acquire stock in an already established one. The basic procedures for creating a new Mexican company with 100 percent foreign capital are as follows:

Sociedad Anónima (S.A.)

        Investors are usually advised to incorporate as a limited liability stock corporation, which may adopt the form of a fixed capital company or that of a variable capital company (S.A. de C. V.). The main difference between the two is that the latter may increase or decrease its capital within the limits established in the bylaws by a mere stockholders’ meeting resolution without the need to fulfill the formalities applicable to the S.A. Nevertheless, both types of companies must notify the National Registry of Foreign Investments and other applicable government agencies of any capital amendment.

        Key characteristics of both types of companies:

        •The shareholders’ liability is limited to their stock interest in the company and the directors are fully liable for the loyal and diligent administration of the company.

        •There must be at least two shareholders and a minimum capital of fifty thousand Mexican pesos, of which 20 percent must be paid at the time of incorporation.

        •They must appoint a statutory examiner who is a third party who supervises the operations of the company and represents the interests of the shareholders.

        •The shares, which represent the capital stock of the company, are freely transferable and can be traded publicly, after the corresponding filings have taken place.

Sociedad de Responsabilidad Limitada (S. de R.L.)

            Recently, this form of Limited Liability Corporation or limited partnership has become popular among foreign companies; in particular, those that want to reduce

...Continued in the pages of Twin Plant News, Subscribe Today!