04 / 26 / 23
Establishing a Branch Office or Presence in Mexico
MEXICO CITY, MEXICO, April 26th, 2023 –Our 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 April 2023. 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. 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.