FAQ: Starting a Business in Mexico

Your Complete Guide to Starting a Business in Mexico, and Thriving

As we celebrate 40 years, we honor the journey shared with our clients — over 1,000 business plans validated and new operations brought to life across Mexico.

 

 

 

Why Start a Business in Mexico?

Mexico offers a unique mix of cost competitiveness, geographic proximity to the U.S., and a stable manufacturing ecosystem. With the USMCA framework in place, more U.S. companies in Mexico are choosing to expand operations here — from automotive and electronics to logistics and professional services.

 

Industrial Corridors in Mexico

 

Tech Talent Clusters in Mexico

 

Major Sourcing Capabilities in Mexico

 

 

Want to learn more about what Mexico has to offer? Speak to an Advisor.

 

 

 

What are the main steps to starting a business in Mexico?

• Choose your legal structure (S.A. de C.V., S. de R.L., branch office).

• Reserve your company name with the Ministry of Economy.

• Draft and notarize incorporation documents in Spanish.

• Register with SAT (Tax Administration Service) for your RFC tax ID.

• Open a local bank account and deposit the required capital.

• Register employees with IMSS, INFONAVIT, and the Ministry of Labor.

• Apply for necessary permits, depending on your sector and location.

Dive deeper in the blog, How to Incorporate a Company in Mexico

 

 

How do I open or expand a factory in Mexico?

There are many operational models that can work for establishing or expanding a factory in Mexico — each with its own advantages depending on the company’s goals, investment level, and desired speed to market.

The IMMEX program was designed specifically to facilitate export-oriented manufacturing, allowing companies to temporarily import raw materials and components duty-free for transformation and re-export.

Choosing the right structure requires a detailed business case and feasibility analysis.

• Site Selection & Feasibility Studies – evaluating labor, logistics, and infrastructure conditions.

• Cash Flow & Operational Model Comparison – analyzing legal, fiscal, and operational implications.

• Turnkey Operations Models – Prodensa’s proven methodology for launching a factory in months, with our team acting as your operational partner in Mexico.

Dive deeper in the blog, How Foreign Companies Structure Operations

 

 

Looking for support in validating your business case in Mexico? Get a quote.

 

 

 

 

What challenges do U.S. companies in Mexico face?

Common challenges U.S. and other foreign companies in Mexico face include:

Adapting to the labor culture:

• Challenge: U.S. management practices don’t always translate directly. Mexican teams value stability, communication, and trust in leadership.
• Solution: Design competitive benefit packages, invest in employee development, and build transparent communication to become an Employer of Choice.

Managing cross-border leadership:

• Challenge: Distance between U.S. headquarters and Mexican operations can cause misalignment in objectives or decision-making.
• Solution: Maintain frequent visits and shared leadership models. Fostering a “sister plant” culture helps unify teams and build mutual accountability.

Selecting the right location:

• Challenge: Each region in Mexico has unique labor conditions, logistics infrastructure, and industrial clusters. Choosing incorrectly can impact costs and retention.
• Solution: Conduct a detailed feasibility study covering workforce, supplier base, and operational model to select a site that supports long-term growth.

Committing to the local community:

• Challenge: Navigating tax obligations, labor reforms, and trade programs such as IMMEX or VAT certification can be complex.
• Solution: Work with experienced local advisors to ensure full compliance and maintain required documentation — avoiding penalties and preserving export incentives.

Staying compliant and informed:

• Challenge: Foreign investors may face skepticism from local stakeholders or communities.
• Solution: Engage through CSR, training, and education initiatives to strengthen your reputation and workforce loyalty while supporting local development.

Dive deeper in the blog, Prodensa's Tips for U.S. Companies in Mexico

 

 

 

 

What taxes apply when doing business in Mexico?

Key taxes for businesses in Mexico include:

Income Tax:

• Flat 30% corporate rate on profits.
• Monthly prepayments to SAT required in some cases.
• Transfer pricing follows Income Tax Law; maquilas use Safe Harbor (tax on higher of 6.9% of assets/inventory or 6.5% of costs/expenses).

Value-Added Tax (VAT):

• 16% general rate on sales, services, imports, and leases.
• Monthly filings; credits available for VAT paid on inputs.
• Refunds allowed when credits exceed collections.

Payroll Tax:

• State-level tax of 2–3%, declared monthly to state authorities.

Profit Sharing (PTU):

• Mandatory 10% of pre-tax profits distributed to employees.
• Paid within 60 days of annual tax filing.

Withholding Taxes:

• Interest: 4.9–35% for foreign recipients.
• Royalties: 35%, potentially reduced by tax treaties.
• Technical Assistance: 25%, also reducible via treaties.

Property/Real Estate Tax:

• 2–4% acquisition tax on purchase value.
• Annual property tax based on assessed value.

Dive deeper in the blog, How Manufacturers Pay Taxes in Mexico

 

 

 

 

How would you describe the Mexico business landscape today?

Mexico’s business landscape is shaped by:

• Growing nearshoring momentum under USMCA.

• Rapid industrialization of regions like Nuevo León, Guanajuato, and Querétaro.

• Expansion of high-tech and EV manufacturing.

• Increased government focus on infrastructure and energy policy.

 

Dive deeper in the blog, The Importance of North American Relations

 

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What support does Prodensa offer for opening a business in Mexico?

Over 40 years, Prodensa has supported over a thousand companies successfully launch operations in Mexico. 

• Market Intelligence: proprietary and public data in custom-built reports.
• Corporate Strategy: advisory for institutional relations, public-private collaboration.
• Feasibility & Cash Flow: business case validation, operations structures, etc.

• Legal & Fiscal Setup: entity registration, permits, tax strategy, etc.

• Real Estate & Site Selection: industrial park evaluation and lease negotiation.

• Turnkey Models: co-administration models for the Mexican operation.
• Business Services (BPO): finance/tax, international trade compliance, environmental health & safety, labor relations & employer compliance, IT solutions.

• Human Resources: recruitment, payroll, and employer-of-record solutions.

• Ongoing Compliance: IMMEX, VAT certification, and trade audits.

Dive deeper in the blog, The Mexico Journey®

 

Want to understand how Prodensa can add value to your project? Speak to an Advisor.