Franchise—Mexico—Q&A guide
Franchise—Mexico—Q&A guide

The following Commercial practice note provides comprehensive and up to date legal information covering:

  • Franchise—Mexico—Q&A guide
  • 1. What forms of business entities are relevant to the typical franchisor?
  • 2. What laws and agencies govern the formation of business entities?
  • 3. Provide an overview of the requirements for forming and maintaining a business entity.
  • 4. What restrictions apply to foreign business entities and foreign investment?
  • 5. Briefly describe the aspects of the tax system relevant to franchisors. How are foreign businesses and individuals taxed?
  • 6. Are there any relevant labour and employment considerations for typical franchisors?
  • 7. How are trademarks and know-how protected?
  • 8. What are the relevant aspects of the real estate market and real estate law?
  • 9. How widespread is franchising in your jurisdiction? In which sectors is franchising common?
  • More...

Franchise—Mexico—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to franchise in Mexico published as part of the Lexology Getting the Deal Through series by Law Business Research (published: July 2020).

Authors: Gonzalez Calvillo SC—Jorge Mondragón

1. What forms of business entities are relevant to the typical franchisor?

There are basically two kinds of business (commercial) entities that are regularly used by foreign franchisors to do business within Mexico by either utilising them as subsidiaries or as businesses with which franchisors may enter into franchise agreements. These entities are the stock corporation and the limited liability company. In both cases, these entities may also be of variable capital that facilitates an increase or reduction in their corporate capital without having to comply with special formalities. The liability of the holders of interest in either of these two types of entities is limited to the amount of their contributions to the corporate capital.

2. What laws and agencies govern the formation of business entities?

The formation and corporate maintenance of business entities are governed by the General Law of Business Organisations. Different government agencies have jurisdiction over business entities depending on the activities performed by them. The main agencies governing business entities’ activities are the Public Registry of Commerce, where all commercial companies must be recorded, the Administration Revenue Service for tax matters and, in the case of foreign entities,

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