Open Holding Companies in Mexico

In this article, our specialists in company incorporation in Mexico explain different aspects related to holding companies in Mexico. With the help of our assistants, foreign investors can easily set up a holding in Mexico and can comply with all the tax and accounting obligations applicable to this structure.

What is a holding company in Mexico?

A holding company in Mexico is a business without any commercial activities, which, instead, owns assets. These can be shares in other companies, units in limited partnerships, private equity funds, publicly traded stocks, bonds, property, patents, trademarks, copyrights or any other asset that has value.

What types of holdings are available in Mexico?

In Mexico, there can be two types of holding companies: local holding companies and non-resident intermediate holding companies.

Quick Facts
Legal entities used	Limited liability company and the joint stock company.
Incorporation method	Holding companies in Mexico are incorporated in accordance with the domestic laws of incorporation.
Incorporation time	Around 4 to 6 weeks.
Types of assets owned by the holding	The holding can own a variety of assets (such as bonds, shares, real estate, intellectual property, etc.).
Requirement for local bank account (Yes/No)	Yes
Residency requirements for the founder(s)	The founders of holding companies in Mexico do not have to meet any residency requirements.
Advantages	The holding is generally incorporated for asset protection and tax minimization strategies. It has a centralized control, which can be beneficial to the overall management of all companies.
Precautions	Considering its size, it can have high operating costs and, due to its size, very complex compliance requirements.
Shareholding structure	It can vary. However, to use the optional regime for groups of companies (tax consolidation was abolished in 2014), the holding must own more than 80% of another company’s shares.
Minimum capital	No statutory minimum (the MXN 3,000 / MXN 50,000 minimums were abolished in 2014); the capital is set in the bylaws.
Taxation	The Mexican holding can opt for the optional regime for groups of companies (partial income tax deferral) if it holds more than 80% of the shares of its subsidiaries. Dividends received from Mexican subsidiaries are not taxable for the holding, but a 10% withholding tax applies when dividends are paid to individuals or non-residents.
Control	The holding controls the subsidiaries (it doesn’t interfere in any of their commercial operations).
Registered agent requirements	Mexican law has no 'registered agent'; the company must appoint a legal representative and have a tax domicile in Mexico.
Accounting and reporting	Holding companies in Mexico must abide by the Mexican laws on accounting and tax reporting.
Number of double taxation treaties	60

What is an IMMEX holding company?

The IMMEX holding company refers to a holding set up under the IMMEX program, an acronym referring to Maquiladora, Manufacturing and Exporting Services Industry. The program is addressed to manufacturing businesses that can benefit from a set of tax advantages, more specifically, to import goods without paying the import tax for a given period of time (VAT and IEPS on temporary imports are payable but can be offset by a 100% credit if the company holds the VAT/IEPS certification). The IMMEX holding must:

be organized as a holding business owning more manufacturing companies;
register as a group under a single IMMEX registration procedure;
the holding must be registered as a Mexican legal entity (Mexican tax residency is required).

Can a holding own more subsidiaries in Mexico?

Yes, a holding company can own more subsidiaries in Mexico which can carry out a variety of business operations. There are several advantages of organizing the subsidiaries under the umbrella of one holding, especially on taxation matters.

What company types are available for a Mexican holding?

The Mexican holding can take the form of a joint stock company (Sociedad Anonima de Capital Variable) or investors can complete the process of company formation in Mexico through a limited liability company (Sociedad de Resposabilidad Limitada de Capital Variable).

What are the characteristics of the joint stock company?

In the list below, we will present some of the characteristics of the joint stock company, as this company type is more suitable for foreign investors who want to open a company in Mexico as a holding (because it is ideal for large companies):

the company can have 100% foreign ownership;
it needs at least 2 shareholders;
it needs a suitable company name, which can be obtained from the Ministry of Economy, where investors can provide up to 3 company names options;
it is also necessary to appoint 1 administrator (or legal representative).

The video below offers a short presentation on the Mexican holding companies:

What are the main registration services you can offer to foreign investors?

Our team can offer dedicated company formation services. In the list below, we will present our basic services on company formation in Mexico, which must also be concluded for the registration of a holding, given that is must be registered as a Mexican corporate entity:

first, we will present a list of documents that our clients must provide us in order to start the process of company formation in Mexico;
then, we can handle the procedure for selecting a suitable trade name;
our team will draft the company’s by-laws (the documents are issued in Spanish and English);
we will address a local notary public for signing specific paperwork (including the bylaws);
our team will register the legal entity with all the authorized state institutions.

How much does it cost to benefit from your company formation services?

The corporate services we provide our clients are charged with specific fees. Our standard registration package costs $1,800 plus VAT. We recommend you address our consultants for in-depth information on the full list of services included in the package (the services listed above represent a part of our services).

What institution is responsible for the registration of foreign companies?

The legislation in Mexico requires that foreign companies (by which we mean businesses with foreign participation) to register with the National Registry of Foreign Investments.

How long does it take to complete the incorporation process?

Company formation in Mexico usually takes around 4 to 6 weeks (this period of time refers to the activities carried out for the incorporation of a business form, but other 2-3 weeks will be necessary for post incorporation formalities, such as tax registration, which also includes VAT registration – for the latter procedure, we invite you to read the following article).

Below, you can read a few important details on the Mexican holding:

What are the disclosure requirements for holding companies of Mexican financial institutions?

Under the Financial Group Law in Mexico, shareholders who buy 2% or more of the capital stock of a holding company of a financial institution in this country must notify the Secretariat of Finance and Public Credit (SHCP). This notice has to be in Spanish and it must contain information such as:

the legal name of the shares beneficial owner;
the legal representative of the beneficiary;
the address for the SHCP to send correspondence;
other information – our Mexico company registration agents can offer more details on what this other information consists of.

For any other details concerning the registration of a holding, as well as for tailored incorporation assistance, our consultants in company incorporation in Mexico remain at your service.