How to Open a Foreign Company Branch in Mexico: The Ultimate Guide to Expanding Your Business

Manuel Mansilla Moya
23 sept
4 Min. de lectura

Introduction

Mexico is firmly on the radar of international investors—and for good reason. Its strategic location makes it a natural bridge between North America, Latin America, and Europe. On top of that, Mexico has signed more than 50 free trade agreements, including the USMCA with the United States and Canada, granting direct access to the largest market in the world.

If your company is based in the United States, Canada, the Netherlands, Spain, Germany, Asia, or Latin America, opening a branch office in Mexico could be the move that kickstarts your global expansion. This is not just about selling in Mexico—it’s about establishing a presence in a country that connects you to the world’s most important economic blocs.

What Exactly Is a Foreign Company Branch in Mexico?

According to Article 15 of the Foreign Investment Law (LIE), foreign companies may set up branches, agencies, or representative offices in Mexico, provided they obtain authorization from the Ministry of Economy.

A branch office in Mexico is not a new company or a separate Mexican entity. It is, quite literally, an extension of your parent company. It operates under the same name and structure, but within Mexican territory. This has two important implications:

Agility: You don’t need to incorporate a new legal entity.
Responsibility: The parent company is directly liable for all obligations incurred by the branch in Mexico.

If your goal is to test the market and get started quickly, opening a foreign company branch in Mexico is often the most direct path.

Requirements to Open a Branch Office in Mexico

Opening a branch is straightforward but requires compliance with specific steps:

1. Authorization from the Ministry of Economy

You must request formal approval for your foreign company to operate in Mexico.
Legal basis: Articles 15 and 17 of the Foreign Investment Law (LIE).
The request must include details such as the branch’s business activities, address in Mexico, and appointment of a legal representative.

2. Corporate Documentation

Articles of incorporation of the parent company.
Certificate of legal existence from the home country.
Power of attorney granted to the Mexican legal representative.
All documents must be apostilled or legalized, and accompanied by official Spanish translations.

3. Registration with the Public Registry of Commerce (RPC)

Once authorization is granted, the documents must be notarized and registered.
This step provides public notice of the branch’s legal existence in Mexico.

4. Tax Registration with the SAT

Obtain the RFC (Federal Taxpayer Registration).
Essential for issuing invoices and complying with tax obligations.

5. Additional Registrations (depending on your business activity)

Register with the IMSS if hiring employees.
Register with the Importer’s Registry for foreign trade operations.
Obtain special permits for regulated industries such as energy, telecommunications, or transportation.

Branch vs. Subsidiary: Which Is Better?

Foreign businesses often debate whether to establish a branch or a subsidiary in Mexico. The distinction is crucial:

Branch: A direct extension of the parent company. Faster to set up, no separate legal personality, but the parent company bears full liability. Perfect for testing the market.
Subsidiary: A Mexican company (e.g., S.A. de C.V. or S. de R.L. de C.V.) with independent legal personality, which limits liability for the parent company. Best suited for large-scale projects or partnerships with local investors.

👉 In short: if you want speed and direct control, go for a branch. If you want independence and limited liability, a subsidiary may be more suitable.

Strategic Advantages of Opening a Branch Office in Mexico

Immediate access to a domestic market of over 130 million consumers.
Direct entry into North America through the USMCA (U.S. and Canada).
Global connectivity with Europe and Latin America thanks to Mexico’s vast free trade network.
Highly skilled workforce at competitive costs, especially in tech, manufacturing, and services.
Legal certainty under Mexico’s Foreign Investment Law and favorable foreign investment framework.
Flexibility: a branch allows you to operate quickly, with less bureaucracy than incorporating a new company.

Conclusion

Opening a branch office in Mexico is much more than setting up a local presence—it’s opening the door to North America, Latin America, and Europe. It’s an opportunity to test a market full of potential, diversify risks, and strengthen your global footprint in one of the world’s top destinations for foreign investment.

If your company is in the U.S., Canada, the Netherlands, Spain, Germany, Asia, or Latin America, Mexico may be your smartest entry point for global expansion.

Take the Next Step with UPLAW Abogados

At UPLAW Abogados, we understand that expanding your company abroad is both exciting and challenging. Our team guides you every step of the way:

✅ Securing authorization from the Ministry of Economy.

✅ Preparing and notarizing your corporate documents.

✅ Handling your tax and labor registrations in Mexico.

✅ Designing legal strategies to maximize Mexico’s free trade agreements.

📈 With a branch in Mexico, you don’t just gain access to a market of 130 million people—you gain preferential entry to the U.S., Canada, Europe, and Latin America.

👉 Don’t miss the chance to internationalize your business with full legal security and expert guidance.Contact us at contacto@uplaw.com.mx or visit www.uplaw.com.mx.