A few weeks ago, a client who was exploring an investment in Mexico asked us a simple question: “Can I incorporate a company in Mexico with just one shareholder or partner?”

For the corporate vehicles that most of the foreign investors actually use in Mexico, the answer is generally a simple no. But any corporate or business lawyer knows that a one-word answer is rarely actually an answer. Clients don’t come to us for a wall, they come to us for a way through it. So instead of stopping at “no,” I want to walk you through why that’s the case, and more importantly, what to do about it.

The short legal answer

Under Articles 89 and 58 of the General Act of Commercial Entities, both the Sociedad Anónima (Mexican Corporation, or “SA”) and the Sociedad de Responsabilidad Limitada (Mexican Limited Liability Company, or “SRL”) require a minimum of two shareholders or partners at the time of incorporation. This is not a one-time formality either: under Article 229, Section IV of the same statute, a reduction to a single shareholder or partner during the life of the company is itself a statutory cause of dissolution. In other words, the two-partner requirement has to be maintained, not just satisfied at signing.

There is one exception: the Sociedad por Acciones Simplificada (SAS), a simplified stock company designed specifically for single-owner businesses. On paper, it looks like the perfect fix. In practice, we rarely recommend it. Beyond the annual revenue cap (around $7.5 million Mexican pesos for 2026, or roughly around USD 400,000, a figure updated annually based on the National Consumer Price Index and relatively low for any operating business with real scale), all shareholders of an SAS must be natural persons.

That restriction makes the SAS unsuitable for many foreign investment structures, since the intended shareholder is often a holding company, fund, or other legal entity, none of which can hold shares in an SAS. It can also become a costly structure to unwind or convert later as the business grows.

So for many foreign investors looking to set up real operations in Mexico, the SAS is usually off the table. That leaves the question: what actually works?

When “no” isn’t the end of the conversation

This is where experience matters. Identifying a client’s real needs, and building a path towards them, should always come before reaching for a flat rejection. Nobody hires a lawyer simply to hear what’s impossible; they hire a lawyer to understand what is possible and how to get there.

Here are two pathways we typically explore.

Option 1: Create a second entity to serve as the “additional” partner

A practical and cost-efficient way to satisfy this requirement without introducing an unrelated third party is to incorporate a second entity in a jurisdiction that permits single-member companies, such as the United States.

US LLCs are frequently considered for this purpose because they can generally be formed relatively quickly and with limited corporate formalities. Their tax treatment, however, should always be reviewed on a case-by-case basis in both jurisdictions. Once formed, the foreign LLC can be incorporated into the Mexican company’s cap table as the second shareholder, holding a minority equity interest, while the principal investor’s operating company retains the remaining, controlling stake.

Important to mention, the Mexican company must comply with the applicable beneficial ownership requirements under Article 32-B Ter of the Tax Code, including the obligation to identify its controlling beneficiary in accordance with the applicable statutory criteria and to obtain, maintain, and update the corresponding information. Failure to comply with these obligations may give rise to penalties regardless of any corporate law considerations.

Because both shareholders may ultimately be controlled by the same investor, this structure satisfies the statutory two-shareholder or two-partner requirement while preserving common ultimate control and without introducing an unrelated third party into the ownership chain. Furthermore, the single owner of the “second” partner can be the majority shareholder of the Mexican company.

Option 2: Pair the operating company with a natural person

A second alternative is for the principal investor’s operating company to hold the controlling interest, while a natural person, often the business owner or a trusted administrator, holds a minority equity interest alongside it.

This approach satisfies the two-partner requirement directly and can often be implemented more quickly. However, it is not without important considerations.

Three issues arise most frequently: succession, legal exposure, and the practical implications of having an individual directly hold an interest in the Mexican company.

In the event of the individual partner’s death or incapacity, the equity interest may become subject to testamentary or intestate succession under the applicable Civil Code, and its transfer or recovery may not proceed as smoothly as intended unless addressed in advance. Depending on that individual’s tax residency and the circumstances of the investment, holding even a minority equity interest may also give rise to tax considerations, including those associated with dividend distributions or a future transfer of the interest.

Finally, direct individual ownership introduces estate planning, compliance, governance, and transfer considerations that many investors prefer to avoid, particularly when the individual is included primarily to satisfy the statutory two-partner requirement.

Many of these risks can be mitigated, though not necessarily eliminated, through careful planning and a well-drafted shareholders’ agreement addressing the minority interest specifically. Transfer restrictions, purchase options, voting arrangements, and other contractual or corporate mechanisms can be structured around that interest to provide greater certainty regarding its future ownership and exercise of rights.

That said, this option can, in the short term, be the fastest route to comply. Even so, it is always important to think ahead, since the long-term implications of this structure deserve careful planning from the outset.

The takeaway

Going back to that client: we didn’t hand them a “no.” We handed them a structure, a set of trade-offs to weigh, and a clear recommendation based on what actually mattered to their business.

Structures like these rarely live inside a single jurisdiction, and they rarely live inside a single law firm either. Getting them right usually means having trusted counsel on both sides of the border that speak the same legal “language”. The foreign holding entity, the Mexican entity, and everything that ties them together can be structured in coordination by counsel in each jurisdiction, without losing context or nuance along the way.

If you have run into this exact question, or hit a legal wall trying to structure an investment in Mexico, reach out to us. We would be glad to help you find the path around it.