04 / 26 / 23
Trading Vehicles: Overview (Mexico)
MEXICO CITY, MEXICO, April 26th, 2023 –Our partner María Esther Rey and associate Nadiezhda Vázquez participated in the Practical Law Practice Note “Trading Vehicles: Overview (Mexico)” released by Thomson Reuters in April 2023. This practice outlines the key corporate features of different trading vehicles that are commonly used when setting up a business in Mexico. It includes an overview of sole traders (comerciante personas físicas) and the main forms of corporations and commercial partnerships; in particular, a sociedad anónima de capital variable (S.A. de C.V.) and a sociedad de responsabilidad limitada de capital variable (S. de R.L. de C.V.).
Most jurisdictions offer several alternative methods for establishing a business and engaging in local commercial activities. Common alternatives range from registering as a sole proprietor or trader, to forming or incorporating an entity with one or more owners and with a separate legal personality. Variations of trading vehicles exist across jurisdictions based on the development of local laws as influenced by local economic and political systems and cultural norms.
When entering a new market, whether by establishing a new subsidiary, joint venture, or through acquisition of an existing business, it is important to understand the differences among the trading vehicles available in the jurisdiction. Many trading vehicle types may appear similar to, or the same as, stock corporations, limited liability companies, or partnerships from an investor’s home jurisdiction and seem distinguished by name only. Some differences, however, may exist in the details. Understanding the differences may help a foreign investor choose a trading vehicle that best suits its business purposes in the new jurisdiction.
This Note sets out the key corporate features of the main trading vehicles used for carrying out commercial activities in Mexico. To read the full pdf article click here or subscribe to Thomson Reuters Practical Law.