Legal Entity
Branch of a Foreign Company
Is Mexico a good option for investment?
Yes, it is. The United Mexican States, better known as Mexico; is a strategic location to do business (it joins the Atlantic and the Asia-Pacific region and is abundant in natural resources essential for the development and productivity of any country), has excellent supply chains, good fiscal incentives, a talented, qualified and young workforce; its attractive network of free trade agreements that allows you to do business globally… The list does not end there and we know you are here because you need to know what are the processes to follow to enter a branch of a foreign company in Mexico as a legal entity. Well, you are in the right place.
If you are a foreign company and wish to have a presence in Mexico to participate in bids or for commercial purposes:
- Obtain taxpayer identification number (RFC). This procedure only applies when you want to do it online. Keep in mind that it is highly probable that your legal representative has previously carried out this procedure to attend other types of processes. By means of this procedure you will be able to obtain your taxpayer identification number (RFC). You must process it before the Tax Administration Service (SAT) and you must do it in person. Obtain the e.firma. This procedure only applies when you want to process online. Keep in mind that it is highly probable that your legal representative has previously carried out this procedure to attend other types of processes. This procedure will allow you to obtain your electronic signature (e.firma) that will be used to carry out electronic procedures before the Tax Administration System (SAT) and other agencies and must be done in person.
- Apostille or legalize the document. The articles of incorporation or constitutive documents that give rise to legal entities abroad must be apostilled and legalized before the competent entities in your country. Apostilled documents are required when the foreign legal entity is not located in any of the following two cases: (a) The foreign legal entity is incorporated in a country with which Mexico has signed a Free Trade Agreement with Investment Chapter, and (b) The foreign legal entity is incorporated in accordance with any of the member countries of the World Trade Organization and is for rendering services.
- To obtain the authorization of the CNIE for certain activities. A favorable resolution from the National Foreign Investment Commission (CNIE) is required for branches of foreign companies to carry out any of the following activities: (a) Port services to vessels to carry out their inland navigation operations, such as towing, mooring of lines and launching, (b) Shipping companies dedicated to the operation of vessels exclusively in offshore traffic, (c) Companies holding concessions or permits for aerodromes serving the public, (d) Private services of preschool, primary, secondary, high school, higher and combined education, (e) Legal services, (f) Construction, operation and exploitation of railroads that are general means of communication, and provision of the public railroad transportation service. The procedure can be carried out in person or online through the SAJIE system, as well as in any Representative Office of the Ministry of Economy.
- Notice of establishment in Mexico (FTA with Mexico or being a member of the WTO in case of rendering a service). This notice must be filed by foreign legal entities that are located in any of the following two cases: (a) The foreign legal entity is incorporated in a country with which Mexico has signed a Free Trade Agreement with an Investment Chapter, and (b) The foreign legal entity is incorporated in accordance with any of the member countries of the World Trade Organization and it is to provide services. The procedure can be carried out in person or online through the SAJIE system, as well as in any Representative Office of the Ministry of Economy.
- Obtain authorization if the country is not a member of the WTO (service activities) or party to an FTA with Mexico. This authorization must be submitted by foreign legal entities that are not located in any of the following two cases: (a) That the foreign legal entity is incorporated in a country with which Mexico has signed a Free Trade Agreement with Investment Chapter; (b) That the foreign legal entity is incorporated in accordance with any of the member countries of the World Trade Organization and is to provide services. The procedure can be carried out in person or online through the SAJIE system, as well as in any Representative Office of the Ministry of Economy.
- Registering in the Commercial Registry. By means of this procedure you must request your registration before the Public Registry of Commerce (RPC) of the federal entity in which the fiscal domicile of the foreign legal entity is located. The coordination of the RPC at the federal level is carried out by the Ministry of Economy. However, the procedure is carried out before the Public Registry of your state.
- Register as an employer. With this procedure you will be able to register the employer company before the Mexican Social Security Institute (IMSS), in order to comply with its obligations before the IMSS in case it has employees. The process can be carried out online or in person at the corresponding Subdelegation or Auxiliary Affiliation and Collection Office according to the tax domicile or work center.
- National Registry of Foreign Investments. The procedure before the National Registry of Foreign Investments (RNIE) must be carried out by the branch of the foreign company, through a legal representative. The procedures before the RNIE can be submitted through the electronic platform, by e-mail (inscripciones.rnie@economia.gob.mx) or in person. If you will file your formalities with the RNIE by e-mail or in person, you do not need to take this step. This is a one-time only procedure for those who wish to submit their matters to the RNIE online. By means of this procedure the branch of a foreign company will be able to register before the National Registry of Foreign Investments (RNIE). The RNIE registration process can be submitted online, by e-mail (inscripciones.rnie@economia.gob.mx) or in person at any of the representative offices of the Ministry of Economy.
- Register the establishment(s). You must register your establishments, when you carry out activities of commerce, services, tourism; industrial, extractive, transformation and its services, and you are established and subject to a fiscal regime. The registration is made only if there is a national or state Business Chamber, authorized by the Ministry of Economy for the activity carried out by the establishment, since this procedure is made through the Business Chambers. If due to your activity and location, two or more Business Chambers can register the establishment, you have the option to choose the one you want.
Source: https://e.economia.gob.mx/
You will need to draft, analyze and negotiate commercial contracts; legal advice, legal arrangements for the personnel you employ, maintain contact with the federal and local government, ensure compliance with regulations and laws, and if necessary, representation in court. You take care of the business, we take care of the legal side. Law In Cabo are at your service.
You may be interested in: https://lawincabo.com/i-need-a-lawyer-for-my-company
