Doing Business in Mexico: A U.S. Legal Guide

Choose your legal structure

The first decision — your entity and tax structure — shapes everything that follows. Most U.S. parents use one of two vehicles: the S. de R.L. de C.V., a limited liability company that can often be treated as a pass-through under U.S. "check-the-box" rules, or the S.A. de C.V., a stock corporation better suited to outside investors or a future transaction. In most sectors a U.S. company can own 100% of the Mexican entity under the Foreign Investment Law.

Get this wrong and it is slow and costly to unwind, and it can create permanent-establishment exposure for the U.S. parent. Decide structure, ownership, and tax treatment with both U.S. and Mexican counsel before you incorporate.

Establish operations & nearshoring

If you are relocating manufacturing or supply-chain operations, you are nearshoring — and most export-oriented operations run on the IMMEX (maquiladora) program, which lets you temporarily import inputs without paying duties and VAT up front. Standing up an operation also means industrial real estate, permits, and labor, typically over a 90-to-180-day legal runway.

The discipline that matters is sequencing: entity, tax, and customs structure should be settled before you sign a lease or hire, because reversing those decisions once you are live is expensive.

Labor & employment

Mexico's labor framework is among the most protective in the region, and the 2021 reform reshaped it: personnel outsourcing of core activities is banned, only genuinely specialized services may be subcontracted (and must be registered in REPSE), and profit-sharing (PTU) was tightened. The USMCA's Rapid Response Labor Mechanism adds facility-level enforcement risk for manufacturers.

Employment structures that worked a few years ago may now be non-compliant, so labor has to be designed correctly from day one rather than retrofitted.

Real estate & the restricted zone

Outside the "restricted zone," a Mexican company owned by your U.S. parent can hold real estate directly. Within it — roughly 50 km from coastlines and 100 km from borders — foreigners cannot hold land directly and must use a bank trust (fideicomiso) or a Mexican corporation. A defective acquisition can be challenged, so the structure has to be right before purchase.

Intellectual property

Intellectual-property rights are territorial, and Mexico is largely a first-to-file system. A U.S. trademark or patent does not protect you in Mexico unless it is registered with the Mexican Institute of Industrial Property (IMPI). File early — before you enter the market — to avoid the costly problem of someone else registering your mark first.

Trade & USMCA compliance

If goods cross the border, USMCA governs whether they qualify for tariff-free treatment. That means meeting the rules of origin and regional value content, completing a defensible certification of origin, and keeping records to survive a customs verification. Automobiles face stricter rules, and the Rapid Response Labor Mechanism ties labor compliance to trade benefits.

A correct origin determination you cannot document is worth little in an audit — qualification and recordkeeping go together.

FCPA & anti-corruption

The U.S. Foreign Corrupt Practices Act follows you across the border, and your biggest exposure is usually third parties — customs brokers, agents, and facilitators who interact with officials on your behalf. A payment your broker makes can become your company's violation. The FCPA's books-and-records and internal-controls provisions catch companies even without proven bribery.

The defense is real diligence on third parties, controls around government touchpoints, and a compliance culture that travels with the same standard you apply at home.

Managing legal operations

Once you are operating, the question becomes oversight. Many U.S. companies use outside general counsel as an embedded legal function for their Mexican operations, and those overseeing multiple LatAm subsidiaries use an embedded Regional Legal Director for strategic command across jurisdictions. Both replace a fragmented set of local firms with a single, accountable point of contact that reports to your General Counsel in U.S. terms.

Resolving disputes

Commercial disputes in Mexico are resolved through the courts or arbitration, and procedures, timelines, and enforcement differ from the U.S. The choice between litigation and arbitration — and of governing law and venue — has real consequences, so dispute-resolution strategy belongs in your contracts from the start, not improvised when a conflict arises.