Do you need a Mexican company to sell in Mexico?

Search for this and you will get a list of Mexican entity types. That is because almost everyone writing about it sells company formation, and the answer that pays them is yes. For a European industrial or consumer goods company shipping its first containers, the honest answer is usually no entity, at least not yet.

But "no entity" is not free. It costs you three specific things, and knowing which of them you can live without is the actual decision.

The four routes

One: export to an independent buyer. You sell ex works or on Incoterms of your choosing to a Mexican company that buys for resale. They import, they own the goods, they take the market risk. You have no Mexican tax presence, no payroll, no filings. You also have no control over pricing, positioning, or whether they order again.

Two: appoint a distributor who imports. Commercially different, legally similar. The distributor is your importer of record and usually your certificate holder. You gain a partner with a plan and lose optionality: see why a European company cannot be its own importer and who holds your NOM certificate. Mexico gives you no statutory indemnity if the relationship ends badly, which cuts both ways and which we cover in ending a distributor agreement in Mexico.

Three: a branch, the sucursal. A registered presence of the foreign company rather than a separate legal person. It requires authorisation from the Secretaria de Economia and registration in the Registro Publico de Comercio, and the foreign investment must be recorded in the Registro Nacional de Inversiones Extranjeras under the Ley de Inversion Extranjera. A branch has an RFC, can register in the Padron de Importadores, and is taxed in Mexico on its Mexican-source income. It does not limit the parent's liability, which is why most companies that get this far go to option four instead.

Four: a subsidiary. Usually a sociedad anonima de capital variable or a sociedad de responsabilidad limitada de capital variable. A separate legal person, full liability shield, its own RFC, its own padron registration, its own certificates, its own payroll. It is also a full Mexican taxpayer with monthly filings, an accountant, electronic invoicing, and social security obligations from the first employee.

The test that actually decides it

Not "how big is the opportunity". The question is whether you need to control the three things an entity gives you.

Import in your own name. Without a Mexican establishment you cannot register in the Padron de Importadores, so somebody else imports. If your product is one where the importer's registration is a chokepoint, or where you need to switch distributors without re-importing your own inventory, this alone justifies the entity.

Hold your own certifications. NOM certificates are issued to a Mexican legal person. If the distributor holds them, changing distributor means re-certifying. For a company with fifteen SKUs that is an expensive and slow event.

Employ people directly. You can put a country manager into Mexico without an entity, through an employer of record. It works, and it does not solve the tax question, which brings us to the part people underestimate.

Permanent establishment is the real risk

Selling into Mexico without an entity is straightforward. Putting a person into Mexico is where the tax question starts, and having no registered company is not a defence: Mexican law taxes a foreign resident on income attributable to a permanent establishment, which a dependent agent who habitually concludes contracts can create on their own. Using an employer of record does not prevent it, because the test looks at what the person does.

That is the single largest constraint on the no-entity route and it deserves its own treatment, which we have given it in does hiring a salesperson in Mexico create a taxable presence. Read it before you make the first commercial hire, not after.

What we would actually recommend

For a first entry with one or two distributors and no local staff, no entity. Ship to a Mexican importer, keep your origin paperwork correct, and put the cost of the certifications you do not control into your pricing.

Register an entity when one of three things is true: you are hiring someone who will sell, not just support; your certifications have become a switching cost you are not willing to carry; or you have enough volume that the IVA recovery and the import control are worth the compliance overhead. In our experience of how these decisions are structured, that point usually arrives sooner than founders expect and later than corporate services firms claim.

For the wider sequencing question, entering the Mexican market sets out the order of operations, and market entry or expansion covers when a market deserves an entity at all.

Common questions

Can I sell in Mexico without a local company?

Yes. You can export to a Mexican buyer or appoint a distributor who acts as importer of record, with no Mexican entity, no RFC and no Mexican filings. What you cannot do is import in your own name or hold your own NOM certificates.

Branch or subsidiary in Mexico, which is better?

For most European companies, a subsidiary. A branch requires authorisation from the Secretaria de Economia and registration of the foreign investment, is taxed on Mexican-source income, and gives the parent no liability protection. The compliance burden is comparable and the protection is not.

How long does it take to set up a Mexican subsidiary?

Long enough that it should not sit on the critical path of your first shipment. Incorporation, the RFC, the electronic signature, the bank account and the padron registration are sequential steps with separate authorities, and the bank account is usually the slowest. Start it in parallel with commercial work rather than after it.