“Mexico is the front door to South America – and the back door to the states…”
Chocolate, corn and chilies of the world. And tequilla, obviously. Mexico is a massive business opportunity territory, that opened its gates for thousands and thousands of international businessmen. And yes, it is open for you!
Establish your business in Mexico!
11th most populated country in the world with around 117 million Inhabitants
because it was a Spanish colony , the official language is Spanish
The capital is Ciudad de México, which is the largest city in the world in terms of population
On the territory of Mexico about 30% of people belong to the native Indian tribes.
Currently it ranks among the major drug dealing area through which drugs are smuggled, mainly to the US, which has a negative impact on the security situation in Mexico
Doing business in Mexico
Production facilities. Currently Mexico is very popular for transfers of production facilities, which brings us the idea, that it is an interesting area for investors. A lot of American companies that have moved their production to China, are beginning to realize that China is becoming increasingly expensive and are looking for alternatives, where to move their production.
Obviously, Mexico offers a cheap and skilled labor force, lower logistics costs, simpler production control and management, it is a country made for saving your money 😉
One of the biggest business benefits are time zones. There are 107 export zones, that offer Zero import / export tax, zero tax on income and VAT. Can you imagine that?
Mexico offers complete control over the management of the company, allows 100% ownership by a foreigner, like in some jurisdiction, where local have to own the company, in Mexico you are the only owner of your company. But there should be at least two shareholders and one director, when obviously everyone can be foreigners.
Most often registered companies are Sociedad Anónima (SA) and the Sociedad Limitada de Resposabilidad (SRL). More commonly registered SA is a company that is similar to our limited liability company.
The share capital is 50,000 pesos, and at least 20% must be paid.
Mexico has signed a total of 51 agreements on avoidance of double taxation, including the Czech Republic. Good for those, who deal with international clients and partners!
But still,there are some details, that are important to study and know before going into Mexican world of business:
Company must have a supervisor/secretary, who is in charge to control the lawful management of the company.
Taxation is not a piece of cake in this country. Mexico ranks among the countries with the highest taxes. The basic rate of income tax for legal and physical persons is 30%. Value added tax is set at 16% in most districts, but in the border areas is reduced to 11%. Withholding tax levied on the dividend payment is 10%, but if the dividends are directed to offshore jurisdictions, applies the 40% withholding tax.
The specialty of Mexican companies is that they have each year to share 10% of annual profits with its employees. But sharing is good, they say;)