In this article, we will show 5 benefits of creating a company in Mexico that will help new entrepreneurs and worldwide companies to earn more money and consider new horizons.
When people are about to start a business with great expectations, good profits, and new ideas, or when a foreign company need to establish a local company in Mexico; comes a time when they wonder about the advantages and disadvantages of creating a company in Mexico. But, this question is no longer new to the most experienced; What's more, they don't even question it anymore, here we will explain why.
Before starting, it is important to say that this article is not intended to be legal advice, so it should not be considered as such. In case you require specific information about a particular business, we suggest you write to us directly. Similarly, this text has not been prepared as a legal text or with academic rigor for students or lawyers. The eye of the expert reader may find some semantic inaccuracies that may be irrelevant or imperceptible to other readers who are not experts in Mexican law. Quite simply, this text has been made as simple as possible to provide clear and useful information.
"To be a successful entrepreneur, you must first have a company."
1. Split of personal assets from those of the company. Disassociation.
One of the main benefits of creating a company is to split the assets of the business and that of the shareholders. With the creation of a company, the company becomes a different person from the partners through legal fiction (now the company, is an "entity").
In this way the company will have its own assets, liabilities, and capital; it will have its own Mexican tax identification number (RFC) and its own business history.
This allows great protection for shareholders and their families in the event that, for any reason, the legal entity suffers large losses or incurs large risks; so that the assets of the shareholders will be safe from bad decisions or misfortunes in business. This is legally known as the “corporate veil”. There are certain cases in which the corporate veil does not apply, especially in those cases in which there has been fraudulent conduct or conduct constituting crimes. But we will refer to those specific assumptions in another article.
On the other hand, the separation of assets has other consequences that can provide great tools and solutions in business; for example, a history in a credit bureau is different from that of the shareholders. That's right! when setting up a new company, the company will have its own credit history, different from the entrepreneurs, which can result in a great advantage for contracting credits that support a business. However, in some cases, banks or finance companies may request credit history from administrators who apply for certain credits.
In addition, by having companies with their own assets, the finances of various companies can be separated and thus reduce the risk that all businesses may be subordinated to the success or failure of a single person.
2. Access to financial products for companies.
We have already mentioned an advantage related to the credit bureau, but another advantage of setting up a company is that you can have access to financial products or specialized packages for companies. Among these products we can mention the following:
Business credit. Bank loans with larger amounts, preferential rates, and preferential attention for companies and entrepreneurs.
Credit for raw material. Special credits to be invested in the purchase of raw materials or materials, payment of salaries, as well as in the direct expenses of the operation.
Financial leasing of automobiles or machinery. Contracts in which different goods can be rented, generally automobiles or machinery, with a purchase option for a good price at the end of the contract.
Access to corporate credit cards. They allow the control, operation, and invoicing of expenses of the company and the managerial staff. With various additional benefits to those granted by a personal credit card (insurance, VIP lounges, etc.).
Hiring services in corporate packages. Insurance, telephone lines, specialized software, transportation services, courses or training, etc.
3. Incorporation of new partners or sale of the company.
Many entrepreneurs have found in the sale of company shares an effective way to invite new investors, find capital, leverage their businesses or even sell their business ideas. The constitution of a company allows grouping different people to participate in the capital, with this the investment and the risk can be diluted.
In recent years, it is common to hear of talented young entrepreneurs who have a great idea, set up their company, register their brand and then sell their company with little or no operations, but for several million dollars.
When a business is organized as a partnership, it is endowed with a certain reliability to add more capital through the inclusion of new partners. This is so, because it is more likely that a people want to invest in a business organized as a company from which he can acquire shares or partnership interests, more than in those businesses organized by word of mouth and without clear rules.
4. Project seriousness and professionalism.
When starting business relationships with other companies, especially with those giant companies with large amounts of capital and hundreds of employees, nothing projects more seriuosness and professionalism than a business with a professional brand or logo registered.
And the reason is simple, if a group of people are organized against the government and against other merchants as a company, then they show seriousness and organization in their business.
In addition, when a company is incorporated as a company before a public notary, it obtains its registration in the Public Registry of Commerce and its tax ID, it is formalized before all people; and then it is ready to sail on the ocean of big business.
5. A different fiscal treatment.
Perhaps one of the main issues that entrepreneurs must consider when setting up a company is the Mexican tax dynamic. While individuals can pay taxes at various rates ranging from 1.35% to 35%, depending on their income; On the other hand, legal entities pay taxes at a single rate of 30% (speaking of income tax).
That is, some individuals may be paying taxes up to 5% more for a successful business that could be under the protection of a company. In addition, companies have access to a broader catalog of deductible expenses that allows them to reduce their tax base. it. In any case, whether individuals or legal entities, it is legal to comply with all tax obligations and issue invoices.
Nobody wants to do big and juicy business with someone who doesn't issue invoices. Even criminal associations dedicated to money laundering know this.
To determine the most efficient legal or tax issues for your business, we recommend that you contact us by email at atencionaclientes@emprendefacil.store and we will provide you with information or advice appropriate to the level of your business.
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