Most common business entity in Mexico
The Sociedad de Responsabilidad Limitada (SRL) is the standard choice for most small- to mid-size businesses in Mexico. Like a US LLC, it provides limited liability protection separated from the owners' personal assets. RFC (tax ID) is the key bottleneck for non-resident founders.
The full menu of Mexico business structures
| Structure | Liability | Tax | Best for |
|---|---|---|---|
| Sociedad de Responsabilidad Limitada (SRL) | Limited | 30% corporate | Most operating businesses |
| Sole proprietor / self-employed | Unlimited personal | Personal income tax rates | Freelancers, one-person services |
| Partnership | Joint and several | Pass-through to partners | Professional services (law, accounting) |
| Branch of foreign company | Parent company liability | 30% on Mexico-source profits | Foreign companies entering Mexico market |
| Public limited company | Limited | Same as Sociedad de Responsabilidad Limitada (SRL) but stricter | Companies preparing for listing |
Which one should you pick?
- Freelance or one-person service in Mexico? Self-employed structure if simple, Sociedad de Responsabilidad Limitada (SRL) if you want liability protection.
- Software / e-commerce / agency? Sociedad de Responsabilidad Limitada (SRL) — standard, scalable.
- Operating an existing foreign company in Mexico? Branch (simpler) or subsidiary Sociedad de Responsabilidad Limitada (SRL) (more substance).
- Planning to raise venture capital? Confirm investors accept Mexico entities. Many require a US Delaware C-Corp flip — see US company formation.
- Holding company for IP or other companies? Sociedad de Responsabilidad Limitada (SRL) with minimal substance requirements.
The Sociedad de Responsabilidad Limitada (SRL) in one paragraph
Sociedad de Responsabilidad Limitada (SRL) is Mexico's primary limited liability vehicle. Minimum paid-up capital: nominal. Headline corporate tax: 30%. 30% federal CIT. RESICO simplified regime: 1-2.5% on revenue < MXN 3.5M.. Banking accessibility: 7/10. Privacy: 4/10 (UBO non-public). Remote formation: in-person typical. Processing time: 14 business days.
For US comparison, see Mexico vs USA. For non-resident formation specifics, see forming a Mexico company as a non-resident.