Starting a Business in Mexico

You do not need a Mexican partner. You do not need $50,000 pesos of capital. You do need work authorization, and a tourist stamp is not it — a distinction that costs nothing until the day you invoice a Mexican client, sign a commercial lease, hire someone, or ask for permanent residency.

What each immigration status actually permits

Four condiciones de estancia allow paid activity in Mexico: a visitante with permission to carry out remunerated activities (up to 180 days, non-renewable, tied to one registered employer); a residente temporal, but only where work permission has been granted; a residente temporal estudiante with authorization; and a residente permanente, who may work in any lawful activity with no further permit at all.

A plain tourist may do nothing remunerated in Mexico. The common softening — that it is fine as long as the client is foreign and pays into a foreign account — is a tolerated practice, not a legal position. Immigration has never issued a rule blessing remote work on a tourist entry. What is true is that enforcement against a foreigner working online for foreign clients is close to non-existent. Write it in your own head as: legally unauthorized, practically untroubled, and a real problem the moment your work touches Mexico.

There is also no Mexican digital nomad visa, whatever a dozen sites call it. The residente temporal por solvencia económica is a general economic-solvency residency and does not by itself confer the right to work.

A residente temporal gets the permiso para realizar actividades remuneradas either at the initial canje or by applying afterwards. The employer route needs a formal job offer plus the employer’s Constancia de Inscripción del Empleador — a one-time registration the Mexican company must already hold before it can sponsor anyone. The self-employed route matters more to this audience: a resident by economic solvency, family unity, marriage, property or investment can apply to work por cuenta propia, submitting the resident card, passport, RFC, a statement of the intended activity and proof of the work address. Student residents generally cannot use it.

The trap worth spelling out: immigration and tax are two different agencies and two separate acts. You can hold an RFC as a resident without work permission — many people do, purely to buy property or open a bank account — and the RFC authorizes nothing. Issuing invoices is not evidence of a right to work, and a mismatch between your declared fiscal activity and your migratory condition surfaces at renewal.

Which entity, for a small operator

Form	What it is	Who it suits
Persona física con actividad empresarial	A sole trader. No notary, no capital, no minutes — register with SAT, get an e.firma, issue invoices.	Consultants, designers, therapists, small landlords, one-person service businesses. What most relocating foreigners actually need. Unlimited personal liability is the weakness.
S. de R.L. de C.V.	Limited liability, capital in partes sociales, transfers need partner consent, capped at 50 members.	The default for a small foreign-owned operation. Cheap to run, closed by design, and the entity US advisers prefer because it can be treated as pass-through for US tax purposes.
S.A. de C.V.	Freely transferable shares, no shareholder cap, more formality.	Choose it if you expect share transfers or outside investors.
S.A.P.I. de C.V.	An S.A. variant built for investment — special share rights, drag-along and tag-along, minority protections.	Venture-backed companies. Overkill for a restaurant, a rental portfolio or a consultancy.

The S.A.S., the free single-shareholder online entity, still exists but is materially less attractive since 1 January 2026: RFC registration is no longer instantaneous through Tuempresa, the online SAT route was eliminated, and founders must now file within a month of signing and attend a SAT office in person by appointment. Any guide still describing the S.A.S. as “a company in 24 hours, online, for free” is describing the pre-2026 regime.

And since the 2011 companies-law reform there has been no legal minimum capital for an S.A. or an S. de R.L. The $50,000 peso figure still quoted everywhere is fifteen years out of date.

Forming the company: sequence, cost, time

The name permit comes from the Secretaría de Economía through Tuempresa — up to five options, free, a few days. A notario or corredor público then drafts and executes the acta constitutiva, at which point the company legally exists; notary fees run roughly $8,000–$25,000 MXN and one to three weeks depending on the notary’s diary. The deed is inscribed at the Registro Público de Comercio, at a cost that varies substantially by state. RFC and e.firma from SAT are free and must be done within one month of commencing operations — and before you can issue a single invoice.

Two obligations that get forgotten: the registro de beneficiario controlador, which carries per-beneficiary fines, and notice to the Registro Nacional de Inversiones Extranjeras where foreign capital participates, with periodic filings after. Add IMSS employer registration, state payroll tax and the municipal operating license if you are hiring or opening premises.

Realistically: $20,000–$40,000 MXN and two to five weeks for a straightforward S. de R.L. with foreign partners, assuming the documents are ready. Foreign shareholders add friction — each needs an RFC, corporate shareholders must produce apostilled and translated constitutive documents and powers of attorney, and the bylaws need the admission-of-foreigners clause. Opening the corporate bank account is usually the longest pole, not the incorporation.

Invoicing runs on CFDI 4.0, mandatory since April 2023 and the only live version. There is no such thing as a paper invoice in Mexico.

The restricted zone and the fideicomiso

Article 27 of the Constitution bars foreigners from direct ownership of land within 100 km of a border or 50 km of a coastline. The mechanism since 1973 is the fideicomiso: a Mexican bank holds bare legal title while you, the beneficiary, keep every economic right — use, lease, mortgage, improve, sell, bequeath. The term is 50 years, indefinitely renewable, and transferable to a buyer. Costs run roughly $2,000–$3,500 MXN for the foreign-ministry permit, around USD 1,000–1,500 to set up, and USD 550–700 a year in administration.

Nothing changed between 2023 and 2026. Article 27 has not been amended and the foreign-investment law’s restricted-zone provisions stand. Two claims worth knocking down: the fideicomiso is not being abolished — proposals surface periodically and none has passed — and “the bank owns your house” is legally true and practically irrelevant, since the bank cannot deal with the property except on your instruction. A Mexican company may hold restricted-zone land directly for non-residential use, which is why developers incorporate; a company holding a foreigner’s personal home is a structure the authorities dislike and it drags full corporate compliance onto a house.

Tax

RESICO, the simplified regime, is what most one-person foreign operations should use. The ceiling is $3.5 million MXN of annual income, and income tax is charged on gross income with no deductions, at 1.00% up to $25,000 a month, 1.10% to $50,000, 1.50% to $83,333, 2.00% to $208,333 and 2.50% above that. Filings are monthly, due the 17th, and an active e.firma and Buzón Tributario are mandatory. When you invoice a company it withholds 1.25%, creditable against your monthly payment. Partners and shareholders of companies are excluded from the regime.

RESICO does not touch VAT, and this is the single most common foreigner error. IVA is 16% nationally, 8% in the northern border zone, filed monthly, and entirely separate from the 1–2.5%. Other obligations that catch people: withholding on rent and professional fees, state payroll tax, lodging tax on short-term rentals, and the beneficial-owner register.

Tax residency is separate from immigration status. Spending 183 days or more in Mexico, or establishing your center of vital interests there, makes you a Mexican tax resident on worldwide income — whatever visa you hold.

The 2026 fiscal reform did not restructure RESICO but sharpened enforcement considerably: criminal penalties of two to nine years for false invoices, power for SAT to suspend invoicing immediately on opening a verification — which halts a business overnight — expanded grounds for canceling digital seals, and from April 2026 real-time SAT access to digital platforms’ systems.

Hiring

The April 2021 outsourcing reform prohibited subcontracting of personnel outright. Specialized services are permitted only where the activity is outside the contractor’s core business, and the provider must hold REPSE registration. Contractors must verify that registration, collect the provider’s payroll filings, report quarterly to SAT, and accept joint and several liability for unpaid wages and contributions. The “hire everyone through a payroll company” model that dominated Mexican small business before 2021 is dead, and anyone selling it to you is selling a liability.

Statutory costs, 2026: minimum wage around $315 a day generally and $441 in the northern border zone; aguinaldo of at least 15 days’ salary payable by 20 December; and vacation of 12 days in the first year, rising to 14, 16, 18 and 20 in years two to five and 22 for years six to ten, with at least 12 continuous days taken as a block and a 25% vacation premium. Any source still saying six days is three years out of date — the Vacaciones Dignas reform took effect on 1 January 2023.

Profit sharing is 10% of taxable profit, distributed to employees with 60 or more days of service, capped per worker at the greater of three months’ salary or their average over the last three years. Employer social burden — social security, housing fund and state payroll tax — typically adds 30–40% on top of gross salary. And there is no at-will employment: dismissal without justified cause triggers three months’ salary plus 20 days per year of service plus a seniority premium, with the burden of proving cause on the employer.

The 40-hour week is now constitutional law, published in March 2026 and phasing in from 1 January 2027 — 46 hours in 2027, 44 in 2028, 42 in 2029 and 40 in 2030, with wages and benefits protected. You cannot cut pay to match hours. The enabling labor-law amendments had not been enacted at the time of writing.