This guide is for a foreign company that has decided to close its Mexican subsidiary. The short answer: a Mexican company does not disappear when it stops operating or when its office closes. It is closed on three fronts that move together: corporate (dissolution, liquidation and cancellation at the Public Registry of Commerce), tax (the liquidation tax year and cancellation of the RFC tax ID) and labor (ending the employment relationships). If one is left open, the SAT, the IMSS or former employees can keep making claims, and the liquidator is personally liable.
Why stopping operations is not enough
A dormant company must still file tax returns, keep its tax mailbox and meet its yearly corporate obligations. Penalties for missing returns accumulate, the tax compliance opinion turns negative and, years later, the parent finds it cannot cancel the company without first catching up on everything it skipped. For the calendar that runs while the company exists, see the yearly obligations of a Mexican subsidiary.
1. Dissolution: the shareholders' decision
The General Law of Commercial Companies (article 229) provides for dissolution by agreement of the shareholders, among other causes, and when all the shares end up in one person's hands. In a subsidiary, the usual route is an extraordinary shareholders' meeting that approves early dissolution and appoints the liquidator in the same act (article 236). The minutes are formalized before a notary and the dissolution is recorded at the Public Registry of Commerce (article 232).
From then on, the directors may not start new business; if they do, they are jointly liable for it (article 233). The company keeps its legal personality only for the purpose of liquidation (article 244).
The notary will ask for proof that the company is registered with the National Foreign Investment Registry (article 34 of the Foreign Investment Law). If the company never registered or is behind on its reports, it is best to fix that before the meeting.
The fast-track route does not apply to a subsidiary
Since 2018, Mexico has a simplified dissolution and liquidation, without a notary, through the Ministry of Economy's electronic system (articles 249 Bis and 249 Bis 1). Only companies whose shareholders are all individuals can use it, with no operations or invoices in the last two years and no debts to third parties. A subsidiary whose shareholder is the foreign parent, a legal entity, does not qualify and follows the ordinary route.
2. Liquidation: the liquidator's job
The liquidator is the company's legal representative during liquidation (article 235). The liquidator receives the assets, books and records from the directors, with an inventory of assets and liabilities (article 241) and, unless the shareholders decide otherwise, completes pending business, collects and pays debts, sells the assets and distributes what remains (article 242).
In a sociedad anónima, the final balance sheet is published in the Ministry of Economy's electronic system; shareholders have fifteen days to object, and then a shareholders' meeting approves it (article 247). The approved balance sheet is filed with the Public Registry of Commerce and, once liquidation ends, the liquidator obtains the cancellation of the company's registration (article 242, sections V and VI). Books and records are kept for ten years after liquidation ends (article 245).
The role is more than paperwork: the Federal Tax Code makes the liquidator jointly liable for the taxes the company should have paid and for those that arise during the liquidator's tenure (article 26, section III). That is why parents usually appoint someone they trust who has access to the full accounting records.
3. The tax close
- A tax year that ends early: when the company enters liquidation, its tax year ends on that date, and the whole liquidation period counts as one tax year (article 11 of the Federal Tax Code).
- Notice of start of liquidation: filed with the SAT within the month after the return for the tax year that ended early (articles 29 and 30 of the Federal Tax Code Regulations).
- Payments and returns during liquidation: the liquidator files monthly estimated payments, one return for each calendar year by January 17 of the following year, and the final return within the month after liquidation ends (article 12 of the Income Tax Law).
- Distribution to the parent: what is paid to shareholders is treated as a capital reduction. The part that exceeds the contributed capital account is a distributed profit and may be taxed, depending on the balance of the net tax profit account (article 78 of the Income Tax Law, which applies to liquidations). Payment to a foreign shareholder follows the rules for dividends paid to non-residents and, where relevant, the applicable tax treaty.
- Cancelling the RFC: the notice of cancellation for total liquidation of assets is filed together with the final return (article 30 of the Federal Tax Code Regulations).
The SAT only accepts the cancellation if the company is not under audit and has no tax assessments, is not on the lists of articles 69, 69-B or 69-B Bis, its returns match its electronic invoices, and it has a positive social security compliance opinion (article 27 of the Federal Tax Code). In practice, cancellation is prepared months ahead: reconciling invoices issued and received against the returns is the part that takes longest.
4. Employees, IMSS and registrations
A shareholders' decision to close is not among the causes for collective termination in article 434 of the Federal Labor Law, which include, among others, clear unprofitability and insolvency proceedings. So in a voluntary closure each employee's exit is negotiated and formalized in a settlement ratified before the labor authority. As a reference, for closures that do fit those causes the law sets severance of three months' salary plus a seniority premium of twelve days per year of service (articles 436 and 162).
Then come the IMSS and Infonavit terminations, the last social security payments, and the cancellation of the company's registrations and programs: importers' registry, IMMEX program, REPSE registration, SAT certifications, notices to the National Foreign Investment Registry, bank accounts and leases. An IMMEX company must return its temporarily imported goods or change their customs regime before it closes.
Common mistakes
- Abandoning the company: stopping filings without liquidating creates penalties and a record that later blocks cancellation.
- Distributing before paying: no shareholder can demand its full share while creditors remain unpaid (article 243).
- A liquidator without information: the liquidator is personally liable for taxes they do not know about.
- Forgetting temporary imports: IMMEX goods that are not returned or moved to another regime turn into unpaid taxes.
How we help
Mariela Cárdenas, LL.M., attorney admitted in Mexico, works from Nuevo Laredo with foreign parents on the pre-closing review, the dissolution meeting, coordination with the notary and the accountant, and cancellation at the Public Registry of Commerce and the SAT.
Frequently asked questions
How long does it take to close a subsidiary in Mexico?
It depends mostly on the tax side. A company with up-to-date accounting and no open audits moves much faster than one with late returns or unreconciled invoices.
Can the liquidator live outside Mexico?
The law does not require Mexican residence, but the liquidator must sign before a notary, file returns with an electronic signature and answer SAT requests. Many parents appoint someone in Mexico to avoid delays.
What if the company is under a SAT audit?
The company can be dissolved and enter liquidation, but the SAT will not cancel the RFC while the audit is open or tax assessments are pending.
Is a merger better than a liquidation?
If the group has another company in Mexico, a merger may be an option. It is decided case by case with the tax adviser.
General information, updated October 2026 under the current texts of the General Law of Commercial Companies, the Federal Tax Code, the Income Tax Law and the Federal Labor Law. It does not replace legal advice for a specific case.
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