13 / 06 / 22
Establishing a Branch Office or Presence in Mexico
MEXICO CITY, MEXICO, June 13th, 2022 –ur partners María Teresa Paillés and María Esther Rey participated in the Practical Law Practice Note “Establishing a Branch Office or Presence in Mexico” released by Thomson Reuters in March 2022. This Note sets out the different options for a foreign company wanting to establish a business presence in Mexico. As an alternative to incorporating a new subsidiary, acquiring an existing entity, or evaluating other methods of entering the Mexican market, a foreign company may establish a representative office or a branch in Mexico. The choice of business presence will usually depend on the type of activities that the foreign company wants to carry out in Mexico.
A representative office is usually set up when the activities to be performed are not deemed to generate income in Mexico (for example, research into or observation of [Jurisdiction] as a new potential market). If, instead, the activities to be carried out are expected to generate income, the natural alternative to a subsidiary would be a branch.
The option to establish a representative office (oficina de representación) is not currently available in Mexico. This Note describes the different types of business presence, focusing in particular on establishing a branch (sucursal) as an alternative to a subsidiary in Mexico, how each operates and the applicable tax regimes.