Mexico's real headline for solo founders is RESICO, a genuinely simple tax regime that can bring your effective rate down to 1% to 2.5% of gross income. The catch across every structure, sole proprietor or company, is the same: getting your tax ID appointment is where most registrations actually stall. Here's what it takes to start a business in Mexico in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Persona Fisica con Actividad Empresarial (sole proprietor). The fastest structure to set up, operating under your own name with full personal liability. Foreign nationals need a valid visa to register.
- S de RL (de CV) (Sociedad de Responsabilidad Limitada). Mexico's LLC equivalent, limited liability, and often preferred by US-connected founders for check-the-box tax transparency under US IRS rules.
- SA de CV (Sociedad Anonima). A stock corporation better suited to larger-scale capital raises than a solo operation.
2. Register your business
Reserve your company name with the Secretaria de Economia (1 to 5 business days), then notarize your Articles of Incorporation (Acta Constitutiva) before a Mexican Notario Publico, a genuinely different process from a US-style notary and often the first real bottleneck. Register with the Public Registry of Commerce in the state where you'll actually operate, since changing states later is a real headache. You'll also need to appoint a Mexican-resident Legal Representative, who holds the e.firma (digital signature) that controls the company's tax filings. Total costs typically run MXN 16,000 to 28,000 for notary and registration fees, or $5,000 to 15,000 all-in once legal and accounting setup are included, with the process taking 2 to 4 weeks.
3. Get your RFC (and budget real time for it)
This is the single most common source of delay in the entire process. Getting your RFC (tax ID) from SAT requires an in-person appointment, booked through a digital queue system (Fila Virtual) that can take weeks to open up, and your legal representative typically has to queue twice, once for the RFC itself and again for the e.firma. Realistically budget 4 to 6 weeks just for this step. If foreign capital owns the company, you'll also need to register with the Registro Nacional de Inversiones Extranjeras (RNIE), which requires annual renewal.
4. Check licenses and permits
Mexico doesn't issue a single national business license. What you need depends on your industry and municipality; foreigners also can't directly own land within 50km of the coast or 100km of the borders for residential purposes, worth knowing if real estate is part of your plan.
5. Understand Mexican taxes
Companies pay a flat 30% corporate income tax (ISR) on net profits, plus a 10% withholding surtax on dividends distributed to shareholders. VAT (IVA) is 16% standard, reduced to 8% in eligible regions near the US border.
If you're a sole proprietor (persona fisica) earning under MXN 3.5 million a year, RESICO offers a genuinely different deal: 1% to 2.5% tax on gross income, no deductions, but at that rate deductions wouldn't save you much anyway. Payments are filed monthly, and as of 2026, those monthly RESICO payments are considered final, no annual return required. The catch: RESICO is only available to individuals, not corporate structures like an S de RL de CV; incorporate as a company and you're back to the 30% rate regardless of size.
6. Stay compliant
Social security (IMSS) contributions are optional for sole proprietors with no employees, but mandatory once you hire staff, typically running 25% to 35% on top of base salaries, a meaningful cost multiplier to budget for. Companies must file VAT returns and annual tax filings on the SAT's schedule, and every peso paid to a Mexican vendor is only deductible if backed by a valid CFDI (electronic invoice).
Mexico business costs at a glance
| Item | Cost |
|---|---|
| S de RL/SA de CV formation, all-in | ~MXN 16,000 to 28,000 |
| RFC (tax ID) processing time | 4 to 6 weeks |
| Corporate tax (ISR), standard | 30% |
| RESICO (sole proprietors, under MXN 3.5M/yr) | 1% to 2.5% of gross income |
| Dividend withholding surtax | 10% |
| VAT (IVA), standard rate | 16% |
| IMSS (if hiring), true cost multiplier | +25% to 35% of base salary |
Frequently asked questions
What is RESICO in Mexico?
A simplified tax regime for sole proprietors earning under MXN 3.5 million a year, taxing gross income at just 1% to 2.5% with no deductions, and as of 2026 those monthly payments are considered final.
What's the biggest bottleneck when registering a business in Mexico?
Getting your RFC (tax ID) from SAT, which requires an in-person appointment booked through a digital queue system that can take weeks to open up. Realistically budget 4 to 6 weeks for this step alone.
What's the corporate tax rate in Mexico?
A flat 30% on net profits (ISR), plus a 10% withholding surtax on dividends distributed to shareholders.
How much does it cost to form an S de RL in Mexico?
Total costs typically run MXN 16,000 to 28,000 for notary and registration fees, or $5,000 to 15,000 all-in once legal and accounting setup are included.
What's the VAT rate in Mexico?
16% standard (IVA), reduced to 8% in eligible regions near the US border.
Fees and rates above come from SAT and the Secretaria de Economia as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Mexico-qualified accountant or lawyer about your specific situation.