By: Luis Gerardo Ramírez Villela
Nearshoring concept is when a company moves its business operations to a nearby country rather than from one of greater distance. The nearshoring practice has become more relevant currently since most of the countries are increasing costs and companies are looking for countries where they can get benefit from lower manufacturing costs.
Besides of costs savings, some other benefits of nearshoring include market flexibility and expedite delivery times. Although nearshoring considers principally the outsourcing of services to a company abroad, another alternative would be incorporating a subsidiary in such location.
Mexico has become one of the most targeted places to do nearshoring since the manufacturing costs are competitive and for import/export activities may be beneficial in the near future.
For such purposes, to the extent you are considering incorporating a Mexican subsidiary, the Sociedad Anónima, the Sociedad de Responsabilidad Limitada, and the Sociedad Anónima Promotora de Inversion, are the three most frequently used type of corporations in Mexico. These corporate structures offer limited liability and you should consider the three of them to select the one which results more compatible to your purposes.
Sociedad Anónima (S.A.)
Corporation type structure, and it is the most commonly used form of commercial entity in Mexico; it is regulated by the General Law for Commercial Corporations (Ley General de Sociedades Mercantiles). It may have either fixed or variable capital. Its stock is represented by shares, which are owned by shareholders. Shares may or may not be negotiable.
Sociedad de Responsabilidad Limitada (S. de R.L.)
Partnership type structure, and it is the second most commonly used form of commercial entity in Mexico; it is also regulated by the General Law for Commercial Corporations. It may also have either fixed or variable capital. Such capital is represented by equity interests (partes sociales), which are owned by partners. Equity interests have restricted transferability. We understand that this type of entity may qualify as a pass-through entity in certain cases in the U.S.
Sociedad Anónima Promotora de Inversión (S.A.P.I.)
Form of stock corporation (it is in fact, a sub-type of S.A.) regulated by the Mexican Securities Market Law (Ley del Mercado de Valores) but are not subject to the supervision of the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores). It may also have either fixed or variable capital. It is a type of corporation intended to promote and encourage the investment by national and foreign investors, by allowing some exceptions from those established in the general rules.
Nearshoring may be a good option for many companies, but it is important to analyze whether outsourcing services or creating a Mexican subsidiary would be better depending on the necessities of each business.
