There are a number of public and private entities to interact with then starting a business in Mexico
When starting a business in Mexico there are various requirements and legalities that must be followed. This post points out some of the public authorities and private organizations that are involved in the process of initiating operations. When taking this information into consideration, it is of importance to know that with the shelter program model of starting production operations in Mexico most interaction with government entities is in the domain of the shelter service provider.
The Ministry of Foreign Affairs
The Ministry of Foreign Affairs (SRE), through the General Directorate of Permits and Article 27 of the Mexican constitution authorizes the founding of a business. To open a firm in Mexico it is necessary to establish and register its name with the Ministry of Foreign Affairs. The SRE is the body that is responsible for making certain that the chosen business name has not been previously used by another entity.
Public Notary/Public Registry of a Commerce
Starting a business in Mexico is made possible through an agreement called a “constitutive writing.” This contract establishes the requirements and rules under which a firm will function. Among the information contained therein are:
- The purpose of the corporation;
- General information regarding the partners to the endeavor;
- Amount of capital invested
- Company name;
- Information regarding the time during which the company will operate.
The agreement commonly referred to as “the statutes,” must be written and notarized. Following notarization, the firm must be listed with the Public Registry of Commerce (SECOFI).
Ministry of Finance and Public Credit
Within thirty days after starting a business in Mexico, the entity must be registered in the Federal Register of Taxpayers with Mexico’s Ministry of Finance and Public Credit, or “Hacienda.” Hacienda is the Mexican version of the Internal Revenue Service in the United States.
When starting a business in Mexico, certain activities carry the mandate that an operating license be given by the municipal government of the locale in which business will transpire. This license must be kept in view. Also, some cities and towns, including Mexico’s Federal District, require that a Land Use Permit be obtained.
Mexican Social Security Institute
When starting a business in Mexico, the company that is the employer must make sure that all workers are registered with the Mexican Social Security Institute (IMSS) within a five-day period for the purpose of complying with Mexican labor laws. The employer’s occupations will be classified by the Mexican Social Security according to the Regulation of Classification of Companies. This is done to determine the “risk factor” that is associated with the tasks that the company will perform.
When starting a business in Mexico, companies must select a bank through which they will execute their financial activities. Through this account, payments will be made, as well as payment for all accessed services such as telephone, electricity, and gas. In addition to registering with Mexican Social Security, companies must enlist with the Savings System for Retirement. Deposits into laborers’ retirement fund must be made to a special account for this purpose every two months.
Mexican Business Information System (SIEM)
When starting a business south of the border, manufacturers must enroll themselves in the Mexican Business Information System (SIEM) in accordance with the Law of Business Chambers and their Confederations. The SIEM makes tools available to find suppliers, to increase sales and to find potential customers. It also provides business support in that it supplies information about public sector procurement programs.
Coparmex, or Federation of Employers of the Mexican Republic
The Employers Confederation of the Mexican Republic (COPARMEX) is a volunteer membership organization of businesses, that provides representation in the workplace and in society as a whole. Its more than 36,000-member firms across the Mexican Republic are responsible for thirty percent of Gross Domestic Product and 4.8 million jobs in the formal sector of the economy.
Even though, when starting a business in Mexico, association with a union is not legally required, entities of over 20 workers can be members of a union.
National Institute of Statistics
Upon starting a business in Mexico, and for the following years thereafter, certain data regarding the business must be given to the National Institute of Statistic or, as it is known by its Mexican acronym, INEGI.
Secretary of Commerce and Industrial Development
Another public entity with which parties that are starting a business in Mexico must come into contact is the Secretary of Commerce and Industrial Development (SECOFI). Among this organ’s responsibilities is the authorization and verification of all technologies dealing with weights and measures. SECOFI also regulates and registers the NOMS or Official Mexican Standards. The registration of NOMs for certain specified items is obligatory. Among them are clothing, footwear, measuring and testing equipment, and healthcare products. Additionally, the Secretary of Commerce and Industrial Development is the government entity that records trade names, patents trademarks, and other forms of industrial property.
Other organizations which come in contact with those starting a business in Mexico include the Secretary of National Resources and Fisheries, t Secretary of the Environment, the Ministry of Labor and Social Security, and the National Water Commission among others.
Starting a business in Mexico as a stand-alone entity is a laborious process. This process, however, can be simplified with the assistance of a shelter service provider.