Acquiring a Mexican Company

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a Mexican Company

Everything you need to know about Acquiring a Mexican Company

Acquiring a Mexican Company Process and Considerations

A corporate acquisition is the process of obtaining the ownership interest in a company, either in whole or in part, directly through a transfer of share capital, or by obtaining control of its assets and operations. Many of the same procedural steps exist in Mexico as in other countries when acquiring a company. However, there are significant differences in terms of execution and due diligence documentation.

Share capital acquisition, involving the sale of shares of the Mexican company (Sociedad de Responsabilidad Limitada, Sociedad Anonima or similar) to a new owner or entity. This is the simplest means in Mexico to formalize an acquisition, but may pose operational risks as all obligations and liabilities will pass to the new owners. However, this method permits uninterrupted operations, less closing costs, and quicker finalization timeline.

Asset acquisition, involves the transfer of all or substantially all of the acquired Mexican company’s (Sociedad de Responsabilidad Limitada, Sociedad Anonima or similar) tangible and intangible assets, as well as commercial contractual relationships with service providers, customers and clients, and intellectual property.

MexInc can assist with advising on which type of acquisition makes the most sense and finalize execution of all relevant steps and procedures

Does Acquiring a Mexican Company Make Sense?

This depends. Acquiring a Mexican Company that is already established with its own portfolio of clients, income, employee knowledge pool, expertise, and goodwill can be extremely valuable when entering the Mexican market. For many foreigners, entering the Mexican market from step one can pose unique challenges. Most foreign companies choose to acquire a Mexican company, either a (Sociedad de Responsabilidad Limitada or Sociedad Anonima) for the following reasons, and are looking to:

Minimize the time involved for going through the formalities of forming a local Mexican company from the beginning

Avoid the risk and hassle of building a local client base from zero

Gaining access to critical employee and organizational know-how

Acquiring access and integration into value and supply chains, service providers, and supplier relationships

Completing a multinational corporate consolidation or purchase involving subsidiaries in multiple jurisdictions - one of which is Mexico.

What Does Acquiring a Mexican Company Involve?

Acquiring a Mexican company by way of share ownership transfer, involves the preparation of a local shareholders or members assembly resolution and the execution of the same before a Mexican notary public. It is common for the resolution to be drafted by an attorney first and then passed to a notary for execution and filing. The parties must also execute relevant share transfer agreements and master sales contracts. MexInc also performs detailed due diligence investigation including review of: tax and social security debts, outstanding labor obligations, third-party debts and risk exposure, vender and client contract review, background checks for directos and managers.

With regard to an asset acquisition, the process would include the transfers of individual assets such as real estate and tangible property, assignment of employment agreement, commercial contracts and intellectual property. Each class of asset can necessitate compliance with its own individual procedures, documentation and formalities. Principally, this type of acquisition involves the drafting of a Master Sales Agreement and the umbrella document establishing the conditions and terms of the transaction.

How easy is it to acquire a Company in Mexico?

    • MexInc makes it easy. MexInc will draft the assembly resolution to formalize the share acquisition, and coordinate the execution of the resolution before our corporate notary.
    • Execute extensive due diligence investigation and deliver detailed report.
    • MexInc also negotiates, drafts and provides all secondary corporate documents such as master sales agreements, sale transfer agreements, non-disclosure agreements, finalization of asset schedules, and securities filings.
    • Additionally, MexInc will perform all ownership transfer registrations before the Mexican tax authorities.
    • In the case of an asset transfer, MexInc will create all asset schedules, draft master agreements, execute employer substitution procedures for key employees, execute ownership transfers of any real property, vehicles, leases, and third-party contract assignments.

Ready start your acquisition?

Ready to get your LLC started in Mexico?

Corporate Shareholder Acquisition in 5 easy steps.

Obtain copies of corporate documents and copies of IDs from document signatories, and execute due diligence investigation

Draft Draft supporting corporate transfer documentation such as share transfer agreements.or members assembly resolution

Forward final assembly resolution document to client for signature and execution

Client forwards original signed document to MexInc for notarization and execution

Resolution is registered before the Registry of Public Property and Commerce

Corporate Asset Acquisition in 6 easy steps.

Incorporate acquisition legal entity

Draft Master Asset Acquisition Agreement

Prepare Asset Transfer Schedules

Execute transfer procedures of real and intangible property

Execute employee substitution procedures and new labor agreements

Prepare and execute contractual assignments with customers, suppliers, service providers and third-parties.

Why use MexInc to assist with Changing the Director of your Mexican Entity?

Over 12 years of local M&A practice

Experience with acquisitions involving IBM, Microsoft and other multinationals

Remote execution without need to travel to Mexico

Expert tax and legal advice by Mexican and U.S. attorneys and accountants

Reasonable pricing and professional fees

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