Written for Mexico. This analysis applies to Mexican federal tax law — ISR (income tax), IVA (VAT) and SAT rules — and cites Mexican statutes. Amounts are in Mexican pesos (MXN).
A golden rule we share with the colleague from the reel: an offshore company is never set up to pay less tax — it is set up because there is a business reason that justifies it, and the tax effects arrive as a consequence. That is not a nice-sounding phrase: it is literally the standard of art. 5-A of the CFF, and the difference between a structure that survives audits and one that gets recharacterized with surcharges.
The purposes that actually hold up an international structure
- Dollarize wealth: treasury and investments in hard currency, away from concentrated country risk — the most common and most legitimate wealth motive of Mexican business families.
- Access to credit and markets: financing on terms Mexico does not offer, institutional investment accounts, global payment processing.
- Genuinely international operation: exporters, importers, agribusiness that sells abroad, services with global clients — where the foreign entity invoices, collects and contracts where the operation actually happens.
- Risk isolation and succession: the foreign layer in wealth structures (such as blocking the estate tax on U.S. real estate).
All of the above comes with bookkeeping on both sides of the border: the foreign entity of a Mexican resident is not invisible to Mexico — fiscal-transparency regimes and REFIPRE (preferential tax regimes) income can make its results accruable here, and the reporting obligations exist and bite. An international structure without Mexican compliance is not planning: it is an omission with expensive paperwork.
The travel-LLC case: an analysis with labels
The scheme from the reel: a businessperson who travels constantly for work, tired of chasing foreign invoices that meet Mexican deductibility requirements, sets up a group LLC whose function is to consolidate travel logistics — the LLC books hotels, flights and transfers, and issues the Mexican company a single invoice for its services, at an arm's-length value with its fee.
What is real about the scheme: administrative consolidation is a legitimate economic function (travel management companies exist for exactly that reason), the single foreign invoice simplifies meeting the requirements, and well run — with a contract, a documented market fee and the LLC actually performing the function — it is a defensible structure. What the reel does not tell you: (1) the expenses do not change their nature — per-diems are still capped by art. 28 (the MXN $750/$1,500 daily for meals, foreign lodging at $3,850) and personal travel is still non-deductible even when packaged inside an elegant invoice; consolidation does not launder the expense, it only tidies it; (2) it is a transaction with a foreign related party: demonstrable arm's-length value and the transfer-pricing obligations apply in full; (3) the LLC with no real function — no accounts, no one running the logistics, that only re-invoices with a margin — is exactly the "beating around the bush" that 5-A recharacterizes: form without substance; and (4) the tax regime of the LLC itself (transparent toward Mexico in most cases) brings its own accrual and reporting homework.
Does your international operation warrant a structure — or are they selling you an off-the-shelf LLC?
Strategium designs international structures in the reverse order of how they are sold: first the map of real functions (what is done abroad, who does it, which assets and risks live there), then the entity, and only at the end the tax effects — documented to survive 5-A. If your case does not warrant a structure, we tell you that too: it is half the value of the diagnostic.
Frequently asked questions
Does a Delaware or Wyoming LLC pay taxes in Mexico?
If its income is treated as yours through fiscal transparency, or its results fall under REFIPRE (preferential tax regimes), it is accrued in Mexico under Mexican rules — the LLC is not an automatic deferral shield. Choosing the vehicle and its Mexican tax classification is the first technical decision of any structure, not an afterthought.
Are the expenses paid by my LLC abroad deductible for my Mexican company?
What is deductible is the service the LLC renders to your company — with a contract, an invoice that meets the requirements, an arm's-length value and the withholdings that apply to each type of payment. The underlying expenses must also respect their own nature (per-diem caps, business connection). Document the full chain or the full deduction collapses.
I already have an LLC that was sold to me 'to invoice abroad' — what should I review?
Three things, in this order: whether it has a real function and substance or is only paper; whether Mexico treats it as transparent or REFIPRE and what you should have accrued and reported; and whether the transactions with your Mexican company have a contract and an arm's-length price. The result of the checklist decides between regularizing, restructuring or closing — all three beat coasting on inertia.
Let's talk about your case
The first step is always the same: an honest diagnostic of where you stand. Write to us on WhatsApp or call — a reply the same business day.