About Kenn Morris, CrossborderBusiness.com Expertise Kenn Morris is an bilingual expert in Mexico and US-Mexico business issues and crossborder markets. His areas of expertise include Mexico`s maquiladora (manufacturing) and technology industries; US-Mexico market research, border business and consumer markets, Mexican culture and business etiquette; and strategic analysis of Mexico business and political situations. Kenn has over 14 years experience working in various capacities in California-Baja California border region and in key business regions in Mexico (including Nuevo Leon, Jalisco, Mexico City and others). His firm provides border market research, industrial marketing, consulting, and governmental relations services.
Experience Kenn started Crossborder Business Associates in 1996 while living in Mexico, with the goal of providing market research, analysis, and consulting support to both US and Mexican firms interested in business across the border. Since that time, CBA has evolved into Crossborder Group Inc. (www.CrossborderBusiness.com), serving a wide range of clients -- from smaller firms, to Fortune 100 companies, to government agencies and universities -- in such areas as maquiladora research and siting studies, crossborder technology research, border crossing studies, analysis of crossborder economic relationships, marketing strategies and more. In addition to his work for Crossborder Group, he is also the past-coordinator for US-Mexico Business program at the University of California at San Diego (UCSD) Extension; and directed UCSD San Diego Dialogue's Crossborder Innovation & Competitiveness Initiative.
Expert: Kenn Morris, CrossborderBusiness.com Date: 3/5/2008 Subject: Starting a business in La Paz Mexico
Question Hello- I want to start a para sailing business in La Paz Mexico. Can you tell me the steps i need to take to do this please?
Thank you
Patrick Brown
Answer Patrick: Sorry for the delay -- we have a major new client that needed our attention.
Regarding your question, it is hard to answer this without knowing more about your personal situation. For instance, from your name I will assume you are not a Mexican citizen -- which means that if you are "working" in Mexico at this future business, you will need to get the appropriate immigration visas (Mexico requires foreigners to get work visas, just like the US). If you are a Mexican citizen, you will not need to do this, obviously -- but certainly this kind of detail helps me to understand what to recommend.
In all cases, you will need to chose a legal structure for your business -- just as in the US, you can have a sole proprietorship, an LLC, or a corporation; each of these will have taxation implications. If you are not a Mexican citizen, you cannot form a sole proprietorship (the easiest structure), although if you have a partner that is, you could do it collaboration with him/her (this, then, brings up risks that this partner -- who would effectively really be the "owner" of the sole proprietorship -- could walk away with the business at any point, so you'd have to measure your risk).
If you are a US citizen, you can form a company (either LLC or Corporation) in Mexico and even own it 100% -- that entity would just then be subject to domestic taxation (just like any other Mexican company). The question would then be how you would operate it at "arms length" (since, again if you are not a Mexican citizen, you couldn't actually "work" at that Mexican business).
Again, assuming you are not a Mexican citizen, one way to potentially structure this would be to have a US-based company (that you own) set up a Mexican company (that is owned in whole or majority by the US company). You might reserve some ownership of the Mexican entity for a Mexico-based partner (to make sure you have a local ally when there are problems), too. This US company could then potentially "lease" equipment to the Mexican entity -- adding some assurance that (should anything happen) the US company would have "rights" to the actual equipment being used in Mexico. These types of arrangements are tricky, so you'll need to get a good accountant/legal advisor to walk you through it.
I'll also note that this type of service has quite a few risks involved, so I'd say that spending money on a lawyer to make sure you have a firewall on potential lawsuits should be one of your biggest concerns....
Okay....that's the "legal" side of things - the other steps are similar to what you need to do when setting up any business: market studies, figure out how to promote your company over the others there, etc.
You'll also need to actually "start up" the company - one way to do that would be through the City of La Paz' online "business start up" system: http://www.lapaz.gob.mx/sare/index.php
Once you've figured out how you want to structure the business, you should really consider working with someone to assist you through the business registration process (a Notario should be able to help), as well as work directly with people from the Secretaria de Desarrollo Economico either at the City level (La Paz) or State level. They'll be able to help (also consider talking to the Secretary of Tourism's office - although be conscious that some of their friends might be operating competing businesses).
Good luck - I've tried to cover most of the strategic aspects that I think are important to consider. If you have other questions, feel free to contact me directly at kenn [at ] crossborderbusiness [dot] com.
-Kenn Morris
Crossborder Group
www.crossborderbusiness.com
