A common question among international sellers is whether it is possible to operate in Mexico without establishing a local company. The answer is yes, and here’s how.
Options for Selling in Mexico Without a Local Company
- Using a Pre-Incorporated Entity with an Immediate RFC: Some consulting firms offer the possibility of operating under an already established Mexican entity, providing you with an immediate RFC. This allows you to start selling on platforms like Amazon Mexico and Mercado Libre within 1 to 3 business days, without the need to set up your own company.
- Operating Through a Mexican Commission Agent or Distributor: If you do not want to open a company in Mexico, you can work with a local commission agent or distributor who manages invoicing and tax compliance on your behalf. This can simplify logistics and reduce administrative burdens.
- Registering a Company in Mexico: If you plan a long-term presence, registering a company in Mexico is the best option. Although this process takes between 4 and 6 months, it allows you to operate completely independently.
Tax Withholdings on Digital Platforms without RFC
If you sell in Mexico through digital platforms like Amazon or Mercado Libre, these platforms are required to withhold taxes on your sales only if you do not provide an RFC. The main withholdings in this case are:
If you sell in Mexico through digital platforms like Amazon or Mercado Libre, these platforms are required to withhold taxes on your sales. The main withholdings are:
- 16% Value Added Tax (VAT): Platforms must automatically deduct this amount from each sale you make.
- 20% Income Tax (ISR) on Revenue: This percentage is retained based on your earnings before expenses.
If you register an RFC, these withholdings are eliminated, depending on your tax regime. It is crucial to provide a valid RFC to optimize your tax obligations and maximize your profits.
Advantages of Selling in Mexico Without a Local Company
- Quick Start: With an immediate RFC or a commission agent, you can start selling in just a few days.
- Less Bureaucracy: Avoid the costs and processes of registering your own company.
- Access to the Mexican Market: Take advantage of Mexico’s e-commerce growth without significant initial investments.
Conclusion
If you want to sell in Mexico without establishing a local company, you have options such as operating through a commission agent, distributor, or an immediate RFC with a pre-incorporated entity. However, it is essential to consider the tax withholdings applied by digital platforms (16% VAT and 20% ISR) to properly plan your finances. These alternatives allow you to comply with tax regulations and seize opportunities in the Mexican market without major initial investments.