Starting a Business in Mexico as a Foreigner: SA de CV, RFC and SAT Setup

Starting a Business in Mexico as a Foreigner: SA de CV, RFC and SAT Setup

Foreigners can legally own and operate businesses in Mexico, and in most industries can own 100% of a Mexican company. The process is more structured than starting a US LLC but very achievable with the right guidance. Here's the complete picture for 2026.

Can Foreigners Own 100% of a Mexican Business?

Yes — with specific exceptions. Foreign nationals can own 100% of an SA de CV or SRL in most sectors. Restricted sectors (energy production, broadcasting, domestic air transport, financial institutions, certain retail) have foreign ownership limits, typically 49%. Tourism, hospitality, technology, manufacturing, professional services, import/export, most retail, and real estate are fully open to 100% foreign ownership. If you're not sure whether your sector is restricted, a Mexican business attorney can confirm quickly.

The Three Common Structures

SA de CV — Sociedad Anonima de Capital Variable

The most common structure for businesses that may involve investors, significant capitalization, or future growth. Requires minimum 2 shareholders, a Board of Directors, and annual reporting. Shares can be issued and transferred. Best for: businesses planning to raise investment, partnerships with multiple stakeholders, or companies that may eventually need external capital. Notario formation cost: approximately $2,000–$4,000 USD.

SRL de CV — Sociedad de Responsabilidad Limitada

Simpler structure, maximum 50 partners (socios), no public share offering possible. Partners' liability is limited to their capital contribution. Best for: small service businesses, consulting firms, close partnerships between a small number of people where investment is not planned. Notario formation cost: approximately $1,500–$3,000 USD.

Persona Fisica con Actividad Empresarial

Registration as a self-employed individual (not a company). No notario formation required — done directly at SAT with a Business RFC. No liability protection — you are personally liable for business obligations. Best for: freelancers, independent consultants, and solo service providers with moderate income who don't need the liability shield of a corporate structure. Cheapest to establish, most limited in scope.

Step 1: Notario Formation (SA de CV or SRL)

Company formation (constitucion de sociedad) must be done through a notario publico who drafts and certifies the Acta Constitutiva (articles of incorporation), registers the company with the Registro Publico de Comercio (public business registry), and handles initial IMSS employer registration if you'll have employees. The notario fee covers the legal documentation, registry filing, and certification. Budget 4–8 weeks from engagement to completed registration for a standard formation.

Step 2: Business RFC at SAT

Every Mexican legal entity needs its own RFC, separate from the owners' personal RFCs. The business RFC is registered at SAT after the company is formally constituted and registered. Required at the SAT appointment: the signed Acta Constitutiva, Registro Publico de Comercio registration certificate, and a legal representative who appears in person. The company receives its Cedula de Identificacion Fiscal (tax ID certificate) and its own e.firma at this appointment.

Step 3: SAT Compliance — CFDI and Monthly Declarations

Mexican businesses must issue CFDI (Comprobante Fiscal Digital por Internet) — electronic invoices — for all transactions. CFDI requires SAT-authorized billing software connected to your RFC. Monthly and annual tax declarations (declaraciones) are mandatory. The system has real teeth: SAT cross-references CFDI data against declarations, and discrepancies generate automated audits. This is where a Mexican accountant (contador) familiar with SME SAT compliance pays for themselves — penalties for late or incorrect declarations accumulate quickly.

Step 4: IMSS Employer Registration

If you hire employees, employer IMSS registration is required before the first paycheck. As an employer you contribute approximately 25–30% of each employee's salary to IMSS (split between employer and employee shares). Mexican labor law also mandates: aguinaldo (15 days minimum annual bonus by December 20), profit sharing (PTU — 10% of taxable profits distributed to employees annually), vacation time that increases with seniority, and severance rights on dismissal. Engage a labor attorney or payroll specialist before hiring anyone — the obligations are significant and non-negotiable.

Step 5: Opening a Business Bank Account

Mexican business bank accounts require the Acta Constitutiva, company RFC, and the legal representative's personal RFC and residency card. BBVA Mexico, Santander Mexico, and HSBC Mexico all serve SME clients. The account is essential for CFDI-compliant billing — SAT increasingly flags businesses that receive significant income in cash without corresponding CFDI invoices and bank deposits.

The SAT Compliance Reality

Mexico's SAT has significantly upgraded its data systems and enforcement capacity in recent years. Non-compliance is no longer easily ignored — automated systems flag inconsistencies between CFDI records, bank deposits, payroll filings, and tax declarations. The most common problems for foreign-owned small businesses: not issuing CFDI for every transaction, underreporting income, incorrect employee classification, and late monthly declarations. None of these are criminal if corrected promptly, but the fines are real.

Free Tools

Mexico Reality Check ($99) covers your specific business situation: mymexicomove.com/booking-calendar | Master Guide ($47): mymexicomove.com/shop | paul@mymexicomove.com