By Ben van Leewarden, General Manager, Warden Consulting
A foreign company setting up in Mexico signs a short run of documents in a few weeks: the incorporation deed and any shareholders’ agreement, the powers of attorney, a lease, and the first distribution contracts. Each one ties the company to a person. Each person can be checked before the signature, while walking away still costs nothing.
This article sets out who to check at each step and what the check has to answer. It is about people and timing. Formation itself, and how to read each Mexican record, are separate subjects.
Who to check, and when
| Before you sign | Who to check | What the check must answer |
|---|---|---|
| The incorporation deed and any shareholders’ agreement | A local partner or investor | Who they are, who stands behind them, and where their contribution comes from |
| A power of attorney, or an appointment as administrator or manager | Anyone who will act for the company, including a professional representative, accountant or lawyer | Whether you would trust them with the company’s signature, because that is what you are giving them |
| The lease | The landlord and the property | Whether the landlord can lease it, what is registered against it, and whether you can operate and be found there |
| The distribution or agency contract | The distributor or agent, and its owners | Who owns and controls it, whether it deals with government, and whether anything connects it to a sanctioned party |
The local partner, before the shareholders’ agreement
Once a partner holds shares, separating from them takes a negotiation or a dispute. The check comes first.
Start with identity and tax standing, then the partner’s other companies. The federal commercial registry can be searched online by a partner’s name, which shows the companies whose registered records name them. For each company that matters, check litigation in the states where it operates, and whether it appears on the tax authority’s lists of taxpayers presumed to issue invoices for simulated transactions. Add public office held by the partner or close family, the press, and the sanctions lists.
Then ask who stands behind the partner. Mexico keeps no public register of beneficial owners. Since 1 January 2022, however, every Mexican company has had to identify the individuals who ultimately own or control it (Federal Tax Code, Articles 32-B Ter to 32-B Quinquies). It must keep that information up to date and hand it to the tax authority on request. Your new company will have to record who stands behind a local partner in any case. Find out before the deed is signed, not when the accountant asks.
If the partner is contributing money, ask where it comes from, and get an answer you can test. A contribution that traces back to a sanctioned person or a designated cartel becomes the company’s problem, and its US shareholders’ problem too.
Anyone who will act for the company, before the power is granted
Mexican company law gives the company’s representation to its administrators by default. A sole administrator or board may carry out every operation within the corporate purpose, except what the law and the bylaws expressly restrict (General Law of Commercial Companies, Article 10). In a sociedad anónima, managers appointed under Articles 145 and 146 hold the powers expressly given to them and, within those powers, the broadest authority to represent the company. Naming someone administrator, or manager with broad powers, hands them the company’s signature.
Powers of attorney work the same way. The Federal Civil Code recognizes general powers for lawsuits and collections, for administration and for acts of ownership. A general power for acts of ownership gives its holder all the powers of an owner over the company’s property. Any limit has to be written into the instrument, or the power has to be special (Article 2554).
Two consequences rarely appear on a set-up checklist. An administrator or manager is deemed authorized to sign bills of exchange in the company’s name by the fact of the appointment, within whatever limits the bylaws or powers set (General Law of Negotiable Instruments and Credit Operations, Article 85). And the company’s e.firma, the electronic signature for its tax filings, can be processed only by a representative holding a general power for administration or ownership granted before a notary. Filings signed with it are presumed, with no proof to the contrary admitted, to have been made by the sole administrator, the chair of the board or whoever holds general management at the time (Federal Tax Code, Article 19-A). A general power given to an accountant reaches the company’s tax signature, and the law attributes what is filed with it to the administrator.
So check everyone who receives a power: the person named administrator or manager, the accountant who will hold the e.firma, and the lawyer or agent handling permits. Professional representatives who act for several foreign companies are common, and for a company without its own staff in Mexico they are often the practical answer. The checks are the same, and a professional will expect them: identity, professional standing, litigation, the companies they have represented and how those relationships ended, and references you call yourself.
Then give each person only the power the role needs. Use special powers where the task is defined. Require two signatures for acts of ownership and for bank transactions above a set amount. Put an expiry date on the power, and keep the power for acts of ownership with the board or an officer of the parent company.
Revoking a power is quick to sign and slower to take effect. Where a power was granted to deal with a particular person, the company must notify that person of the revocation. Otherwise it stays bound by what the representative does afterward with that person, if that person acted in good faith (Federal Civil Code, Article 2597). The company should also demand the original instrument back, because a principal who fails to do so answers to third parties acting in good faith for the damage (Article 2598). Registering powers in the commercial registry is optional (Commercial Code, Articles 19 and 21), so the registry may show neither the power nor its revocation. In practice, write to every bank, landlord, supplier and authority the representative dealt with.
Editor’s note from Roberto Cornejo Reindl, Founder & CEO, Start-Ops Mexico: I act as Gerente Especial and legal representative for more than ten companies in Mexico, and I have worked with foreign companies entering Mexico since 2018. Every check above applies to representatives like me, and a good one will expect it. Before you appoint anyone, read the exact wording of the powers you will grant, agree how they are limited, and agree how the representative will report what they sign on the company’s behalf. More on legal representation for foreign companies in Mexico.
The landlord, before the lease
The lease often gives the company its first address, and that address is a tax matter. If the tax authority cannot locate the company at its registered tax address, it can temporarily restrict the digital seal certificate the company uses to issue invoices. The same applies when a verification finds that the address does not meet the legal requirements (Federal Tax Code, Article 17-H Bis). A company that cannot issue invoices cannot bill its customers. If the address is a virtual office or a shared desk, confirm in writing that the provider will receive the authority’s visits and notices and pass them on the same day.
Confirm that the landlord owns the property or has the right to lease it. Ask for the property’s registry folio and obtain a current lien certificate from the state property registry. It shows the mortgages, liens and preventive annotations registered against the property, such as a court attachment. A property with a defaulted mortgage or an attachment against it can change hands during your lease. If the landlord is a company, confirm that the person signing holds a power that covers the lease.
Then confirm that the zoning permits what you will do there. Ask for the land use certificate (certificado de uso de suelo) and read it against your activity. Offices, warehouses and light manufacturing are zoned differently, and the permits you need to operate depend on it.
The distributor or agent, before the contract
A distributor or commercial agent carries your products and your name into the market, and often deals with buyers, customs and officials on your behalf.
Start with who owns and controls it. The answer is not on a public register, so ask for the incorporation deed, the current shareholder register and the beneficial ownership information the company already keeps for tax purposes, and test what you are given against the commercial registry.
Then screen the distributor, its owners and its managers against the sanctions lists, before signing and again before renewal. The United States designated Mexican cartels as Foreign Terrorist Organizations on 20 February 2025, and the Treasury continues to add Mexican businesses to its sanctions list. On 13 October 2026 it added 11 businesses and four individuals in Mexico, in an action it described as targeting the Cartel del Noreste’s horse racing enterprise and wider criminal network. Four of the businesses were fuel wholesalers incorporated on the same day in March 2025. A company with a short, clean registry history can still sit inside a sanctioned network.
Ask whether it deals with government. If the distributor sells to public hospitals, state-owned companies or government agencies, or handles permits and customs for you, its payments can become your exposure under the Foreign Corrupt Practices Act. The Justice Department’s FCPA enforcement guidelines of 9 June 2025 make cartel links a primary consideration in deciding whether to pursue a case. They name misconduct associated with a cartel or transnational criminal organization, the use of money launderers or shell companies working for one, and officials or state company employees who have taken bribes from one. Ask how the distributor wins government business, who its contacts are and whether it pays intermediaries.
If the distributor will also invoice you, for marketing support, rebates or services, check the tax authority’s Article 69-B lists before the first payment. When a taxpayer is definitively listed as issuing invoices for simulated transactions, its invoices have no tax effect, and its customers have 30 business days from the listing to prove the transactions were real or correct their returns.
Before granting exclusivity, visit the warehouse and meet the people who will sell for you. Exclusivity given to a distributor that cannot cover the territory is a cost you carry until the contract lets you out.
Check before each signature
Each check belongs before the signature it protects. In our work, a screen of a person or company takes from a few hours to three business days, and a full due diligence review of a partner or distributor takes seven to ten business days. After the signature, the same questions can still be answered, but the answer comes too late to decide whether to sign.
This article is general information, not legal advice.
About the author
Ben van Leewarden is General Manager of Warden Consulting, a corporate investigations and due diligence firm founded in 1995, with investigating lawyers in Mexico City and an office in Auckland. He has worked as a private investigator for more than eight years.
