Mexico has become one of the most attractive destinations for international expansion. Its strategic proximity to the United States, competitive manufacturing base, and membership in key trade agreements like the USMCA position it as a global hub for companies seeking to diversify supply chains and tap into new markets.
With a population of more than 130 million and a growing middle class, Mexico is Latin America’s second-largest economy. The nation offers both a strong domestic market and an export-oriented economy. Recent policy emphasis on FDI attraction, infrastructure and industrial development has only strengthened its appeal.
While the UAE continues to draw investment with its free zones, strategic trade location, and business‑friendly tax reforms, Ireland remains a top choice for its EU market access and innovation ecosystem, and the Netherlands leads in combining strong R&D incentives, infrastructure, and regulatory clarity. The new national incentives under Plan Mexico make it a compelling hub for firms seeking both regional scale and competitive cost advantages.
Related: Doing Business in the UAE in 2025
Quick Facts for 2025:
- Gateway to North America: Strategic proximity to the U.S. and integration under USMCA.
- Corporate tax: Standard corporate income tax rate applies (companies must check current national rates and special rules).
- VAT (IVA): Standard VAT applies (check local rules and border-region rates).
- Ownership: Most sectors allow 100% foreign ownership; some strategic or restricted sectors require approvals or local participation.
- Workforce & talent: Large bilingual workforce with strong engineering, manufacturing, and tech talent pools.
- Trade & logistics: Well-developed manufacturing clusters (automotive, aerospace, electronics) and strong supply-chain integration with U.S. and international markets.
Related: Top 15 Countries by GDP in 2025
Why Mexico Matters for Global Expansion
For businesses finalizing their 2026 strategies, Mexico offers a mix of short-term and long-term advantages. Nearshoring allows companies to reduce shipping times and costs by locating production closer to North American markets. At the same time, Mexico’s skilled, bilingual workforce and established industrial clusters provide a foundation for scaling operations across manufacturing, technology, and services.
The country is no longer just a low-cost production hub. Today, it is investing in high-value industries such as aerospace, medical devices, and IT services, while still maintaining its leadership in automotive and electronics manufacturing.
Business Structures in Mexico in 2025
Choosing the right legal form affects tax, liability, governance, and operational flexibility. Common options include:
- Sociedad Anónima (S.A.): Similar to a US Corporation, S.A. is widely used by medium to large companies. The shares can be publicly traded (if structured as S.A.B. or similar).
- Sociedad de Responsabilidad Limitada (S. de R.L.): Similar to US limited liability company (LLC), a S.de R.L. is often chosen by SMEs and subsidiaries for governance flexibility.
- Branch / Representative Office: Foreign companies can register a branch however it’s treated differently for tax and liability. Branches also expose the parent company to local obligations.
- Offshore/Holding Structures: These types of entity setups are available for holding or financing activities (subject to Mexican law and anti-avoidance rules).
- Special Regimes: Such as maquiladora/IMMEX are suitable for export manufacturing, which offers customs and manufacturing benefits.
Key practical points:
- Foreign ownership: 100% foreign ownership is allowed in most sectors, but restricted sectors (e.g., some energy, telecommunications, and certain land-use categories) have limitations or approval processes.
- Licensing & permissions: Specific activities (healthcare, financial services, food, transport) need sectoral permits and regulatory approvals.
- Local presence: Registering a company in Mexico requires a local legal address, Mexican tax ID (RFC), and appointed legal representatives.
Cerity Global advises on choosing the right entity and manages the legal entity setup process, registrations, bank account setup, and ongoing compliance filings.
Related: Mexico Country Page
Step-by-Step: Setting Up a Business in Mexico
The legal entity setup process in Mexico involves three main phases:
- Planning & Documentation: This includes selecting the entity type, drafting incorporation papers, and preparing shareholder documents. Choosing the right state also matters, as incentives and processing times vary across Mexico.
- Legal Formation: Once documents are notarized, the company must be registered with the Public Registry of Commerce and the Tax Administration Service (SAT). At this stage, companies also obtain their tax ID (RFC) and register with the Social Security Institute (IMSS).
- Operational Setup: Opening a bank account, applying for sector-specific permits, and hiring staff. Many businesses use an Employer of Record (EOR) to begin hiring while waiting for their entity setup to complete.
On average, it typically takes 4 to 12 weeks to establish a fully operational entity, though timing can vary depending on complexity. Alongside incorporation, businesses must establish compliant payroll and HR systems.
Cerity Global manages every stage of your HR, payroll, and benefits support, ensuring businesses stay compliant from day one.
Related: Legal Entity Setup in 2025
Cost of Doing Business in Mexico (2025)
While exact setup costs depend on the industry and location, businesses should prepare for expenses in five key areas:
- Incorporation and legal fees: These include the notarial services, public registry filings, and corporate documentation.
- Office or facility space: Ranges from serviced offices in urban centers to industrial park leases for manufacturers.
- Payroll and social security contributions: Comprises of employer costs include social security, housing fund contributions, and payroll taxes.
- Ongoing compliance: The process comprises tax filings, VAT reporting, and payroll processing.
- Licenses and permits: Depends on industry, businesses may need environmental or operational permits.
Working with a local partner helps anticipate these costs and avoid delays or compliance risks.
Cerity Global’s international accounting support ensures accurate filings and cost control.
Key Opportunities in Mexico
Mexico’s economic strength lies in its ability to serve both domestic consumers and international markets. The strongest opportunities in 2025 include:
- Automotive and Electric Vehicles: Mexico remains one of the world’s largest auto exporters, with new EV supply chain investments accelerating.
- Aerospace Manufacturing: States like Querétaro and Baja California host advanced aerospace clusters.
- Technology and Software Services: Guadalajara and Mexico City have become hubs for nearshore IT development.
- Medical Devices and Life Sciences: Growing exports and investment in healthcare manufacturing.
- Renewables and Clean Energy: Solar and wind projects are expanding under Mexico’s energy transition agenda.
While Ireland remains strong in life sciences and tech startups, the Netherlands in R&D and infrastructure, and the UAE in digital finance and free zone investment, Mexico is making strides in automotive, medical devices, tech services and renewables.
Related: Doing Business in Ireland in 2025
Challenges to Consider
Doing business in Mexico also comes with challenges such as:
- Tax and transfer pricing rules are complex and required careful documentation
- Employers must comply with labor laws, social security, and collective bargaining agreements.
- Customs procedures under USMCA can be demanding, and regulations vary between states.
- Logistics and security considerations require thoughtful supply chain planning.
Despite these challenges, many companies find the advantages outweigh the risks when supported by local expertise.
Cerity Global helps businesses manage HR, payroll, accounting, tax and compliance so expansion plans aren’t derailed by local requirements.
Related: EOR vs Legal Entity Setup in 2025: Which Is Best for Global Expansion?
FAQs on Doing Business in Mexico (2025)
What is the corporate tax rate in Mexico?
Mexico has a standard corporate income tax of 30% under federal law. Special regimes, such as the IMMEX program, may provide incentives for qualifying companies.
Can foreign companies fully own Mexican entities?
Yes. In most sectors, 100% foreign ownership is allowed, though restricted industries like energy and telecommunications may require special approvals.
How long does a legal entity setup take?
Typically, a legal entity setup can take anywhere between 4 to 12 weeks depending on structure and location.
Do I need a physical office?
Yes, all entities require a legal registered address in Mexico. Manufacturers typically need industrial space, while service companies may use serviced offices.
Are there incentives for exporters?
Yes. The IMMEX program offers customs and VAT benefits to manufacturers that export most of their output. Some states also provide local tax and training incentives.
Why Expand to Mexico in 2025?
Mexico’s strategic advantages, geographical proximity to the U.S., competitive manufacturing clusters, bilingual talent, and a mature legal framework for export manufacturing — make it attractive for both short-term nearshoring plays and long-term regional hubs. For companies finalizing their 2026 strategies, Mexico often delivers quicker supply-chain optimization, lower lead times, and strong logistics networks into North America.
Whether you’re entering Mexico to establish a regional hub, conduct R&D, or scale production under IMMEX or other special regimes, Mexico supports flexible entry models. Companies often start with an Employer of Record (EOR) or branch office, and transition to a full legal entity as operations grow.
With Cerity Global’s global expansion services companies can confidently establish a presence in Mexico, hire directly, and streamline HR, payroll, accounting, and compliance across 170+ countries.
How Cerity Global Can Help
Cerity Global specializes in helping companies expand into Mexico and the EU. From entity incorporation and tax registration to payroll, compliance, and ongoing HR support, we provide end-to-end solutions tailored to your business needs.
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Cerity Global helps companies with legal entity setup, payroll, accounting, HR, tax, and compliance across Mexico and 170+ countries worldwide.