To establish a corporation, foreigners must have an FM3, a document they need to work in Mexico. It must be renewed annually. An FM-3 is one of several documents that show a foreigner’s immigration status in Mexico. There is also an FMT for tourists and an FM-2 for resident aliens. Anyone who wants to do business needs to obtain an FM-3. You don’t need one just to come and spend up to six months in your own condominium or home or to pay taxes on your Mexican income. But if you open a Mexican bank account you will probably need one. And if you intend to establish a Mexican corporation, all the stockholders must have FM3’s.

A Mexican corporation is a Mexican entity, even if the stockholders are all foreigners. Certain documents are required, such as bank statements, passport or visa and photos. The corporation must have a physical address in Mexico (not a P.O. Box), an accountant, a bank account and proof of financial stability. There must be a minimum investment of $50,000 pesos (about $4,800 dollars). The corporation can be run by either one director, with power of attorney to make decisions, or a board of directors.

1. The first step is to apply for a permit from the Department of Exteriors Relations in which you register the name of your Mexican corporation. Three names for the company must be submitted. A computer search of those names is done to avoid duplicating an existing name. Approval of the company name, and a permit authorizing it, can be completed within a few days.

2. The next step is developing the articles of incorporation. This task requires the services of a Notario (see Real Estate Transfer Process) who must draw up and record them. Mexican corporations require specific objectives, so be sure to list anything you might conceivably want to do. If you will be selling furniture, for example, include such objectives as interior design service, furniture repair, and sale of polish, cabinet hardware, cushions, draperies, and any other related products or services. It is very difficult and expensive to go back and add items once the corporation has been established.

3. Once the articles of incorporation are recorded in the public record, you need to obtain the necessary permits: Hacienda (federal tax), Dept. of Commerce, State Registry, a mandatory Chamber of Commerce (by industry), SIC code data base, Import/Export permit, and the Dept. of Immigration. Additional permits are required specific to certain industries. All of the above permit fees, including the Notario’s, usually come to around $1,500. Consulting fees for processing the paperwork and completing registries are additional.