Corporate & Immigration

Moving Your US LLC to Mexico: 2025 Corporate Guide for Expats

You run a successful US-based LLC, you have a solid client base, and you have just moved to Puerto Vallarta or Mexico City on a Temporary Resident Visa. Can you continue to operate your US LLC while living in Mexico? The legal reality is much more complicated than most expats realize.

Many digital nomads and entrepreneurs operate under the assumption that because their clients are in the United States and their business bank account is a US-incorporated Chase or Mercury account, they owe no commercial duty to the Mexican government.

In 2025, that assumption is a dangerous legal blind spot. Operating a foreign entity while permanently living and working on Mexican soil triggers rules concerning "Establecimiento Permanente" (Permanent Establishment) and local SAT (tax) obligations.

In this guide, we break down the risks of continuing to operate a US LLC as a Mexican resident, the process of legally "moving" your business, and the Mexican corporate structures (like the S de RL de CV) available to expat founders.

The Concept of "Permanent Establishment" in Mexico

The core issue of running a US LLC from Mexico isn't where your clients live—it is where the work is performed and where business decisions are made.

Under the US-Mexico Income Tax Treaty and Mexican domestic tax law (Ley del ISR), if a non-resident entity (your US LLC) conducts activities in Mexico through an individual who has the authority to conclude contracts on behalf of the company, that company has created a "Permanent Establishment" in Mexico.

If the SAT determines your US LLC has a Permanent Establishment south of the border, the LLC itself becomes subject to Mexican corporate taxes (roughly 30%) on the profits generated by the Mexican operation. This creates a catastrophic double-taxation scenario and severe administrative nightmares with the IRS.

When Should You Restructure?

If you are a solo freelancer living in Mexico for 6 months a year, the risk is lower (though not zero). However, you should absolutely rethink your corporate structure if you:

• Hire local Mexican employees or independent contractors.
• Rent commercial office space in Mexico.
• Import goods to sell locally or physically move inventory across the border.
• Live in Mexico full-time with a Permanent Resident Visa as the sole operating manager of the LLC.

Options for Structuring Your Business in Mexico

You cannot literally "transfer" a Delaware or Wyoming LLC registration to the Mexican government. Instead, your options involve localized restructuring.

1. Register as a Foreign Entity Subsidiary

A US LLC can legally open a branch in Mexico by registering with the National Registry of Foreign Investments (Registro Nacional de Inversiones Extranjeras) and obtaining authorization from the Ministry of Economy. This process is expensive, highly bureaucratic, and requires your US corporate documents to be apostilled and officially translated via a perito traductor.

2. Incorporating a New Mexican Entity

For most expat entrepreneurs, the cleanest, safest, and most common strategy is to incorporate an entirely new Mexican corporate entity. This new entity can then sign an inter-company agreement to explicitly handle the "Mexican operations" for your US LLC, or simply replace your US LLC entirely.

Choosing the Right Mexican Corporation Type

Mexico does not have an exact 1-to-1 equivalent to a US LLC (which enjoys pass-through taxation). Mexican entities are taxed as standalone corporations. The most popular frameworks for expats include:

Entity Type	Acronym	Best For...	Key Characteristics
Sociedad de Responsabilidad Limitada de Capital Variable	S. de R.L. de C.V.	Closely held businesses, joint ventures, and expats looking for US tax flexibility.	The closest cousin to the US LLC. It limits liability and can "check the box" with the IRS to be treated as a pass-through entity for US tax purposes, helping avoid double corporate taxation under FATCA. Requires at least 2 partners.
Sociedad Anónima de Capital Variable	S.A. de C.V.	Startups looking for outside capital; larger structural corporations.	Similar to a US C-Corp. Easy to transfer shares. Strict corporate governance and board requirements. Heavy SAT reporting.
Sociedad por Acciones Simplificada	S.A.S.	Solo entrepreneurs with limited capital.	Can be formed by a single individual entirely online with no notary fees. However, its annual revenue is strictly capped (approx. $7 million MXN) and banking can unexpectedly be difficult.

Key Administrative Hurdles to Expect

Creating a company in Mexico takes significantly more time than filing articles of organization online in Delaware.

• Notario Público Requirement: Except for the SAS, all corporate entities must have their bylaws formally drafted and authenticated by a Mexican Notary Public (a high-level appointed official, not a standard clerk).
• The RFC and SAT: You must register the new corporation with the SAT (tax authority) to obtain a corporate RFC. This often entails biometric appointments for the legal representatives.
• Monthly Filings: Unlike the US, where taxes are generally reconciled annually, Mexican corporate entities must file provisional tax declarations every single month. Hiring a local accountant is mandatory.
• Labor Laws: If you hire employees, Mexican labor law is famously pro-worker. You must register with IMSS (social security) and provide mandated Aguinaldos (Christmas bonuses) and profit-sharing (PTU).