Finding the correct location for its beginning can be complicated, but if it is conserving North America, the United States and Mexico are two strong contenders.
The United States is considered one of the world’s economic powers, promoting world class innovation in industries such as artificial intelligence, electronic commerce and medical care. With its GDP that comes out of £ 18 billion, sacrifices a massive potential for new companies that enter the market.
Its neighbor, Mexico, is quickly earning traction as a starting location thanks to its lowest costs to start a business. In an effort to attract more entrepreneurs and investors, many accelerating and incubating programs have emerged to promote the growth of new companies.
Let’s take a look at how the thesis two countries compare a side by side.
How friendly to startups are the United States and Mexico?
USA: The United States is home to more than 82000 new companies, occupying the first place in the global starting ecosystem index (GSEI). Its world -class capital and infrastructure availability is a large drawing card for entrepreneurs, however, regulations can be strict and competition is still fierce.
Mexico: The starting ecosystem has improved dramatically, with the active government that supports new companies. Although it is located within the 50s according to the (GSEI), many of the public services are still being developed.
The cost of living in thesis countries
USA: The cost will vary according to its location, but cities like New York, Los Angeles and San Francisco are an incredible expectation. Cities such as Texas, Florida and North Carolina are more affordable for new companies with a tight budget, but in general, the United States has higher rentals and taxes compared to other countries. An office space could vary from £ 900 – £ 1,800 per month, while basic life costs vary from £ 1,400 to £ 2,200.
Mexico: Here, the cost of living is considerably lower than the US. In main areas such as Mexico City. The monthly office rental is approximately £ 200 – £ 600, while basic life expenses range between £ 600 and £ 1,200.
For new conscious companies of the budget, Mexico is cheaper in its pocket, but it does not necessarily have the same resources as the United States sacrifices.
Fiscal regulations in the United States and Mexico
USA: The federal corporate tax rate is 21% and state taxes will vary from State to State. Areas like Wyoming have 0%, but others may have up to 12%. The fiscal process can be quite complex to navigate for foreign entrepreneurs and, in most cases, will require professional assistance.
Mexico: The corporate tax rate is 30% with the Value Added Tax (VAT) to 16%. Some fiscal processes can be slower, but the country is active developing online tools to accelerate it.
What cultural or linguistic barriers could you find?
USA: The official language is English, so a language barrier is not a concern for English -speaking foreigners. In most commercial environments here, communications are usually very direct and formal, and time is highly valued.
Mexico: Spanish is the official language with a very limited English, so there may be possible barriers of the language. Here, business culture focuses a lot on relationships and hierarchy.
Visa and residence requirements for foreigners
USA: An investor visa, or E-2, requires a lot of investment and, although a start visa has been proposed, it has not yet been approved official. For those who transferred between companies, they can request a L-1 and highly qualified people can request an O-1. Vis processing can take a long time and the requirements are strict.
Mexico: A temporary resident visa is ideal for business owners and is valid for up to 4 years. Permanent residence may be available after 4 years and remote workers can request a digital nomadic visa. The process is generally faster than those of the United States, especially for residents in Latin America or Europe.
Is there any potential challenge to consult?
USA: Legal fees to enter the country are expensive and visa approval may take time to arrive. For companies, there is an important competition in almost all industries and there are risks of high responsibility for owners. Medical care is also incredible, which is another expense to factor.
Mexico: Corruption is quite component within government offices and security is a problem in some regions with high crime rates. For those who do not speak Spanish, a language barrier can be a challenge to navigate unless you work with a translator.
How to start a business in the United States or Mexico
USA: Choose if you want to operate as a single merchant, limited liability company or corporation. You can then register the business with the Secretary of State for your relevant status. You can then request the identification number of your IRS employer and open a commercial bank account. The registration process generally takes between 1 and 2 weeks may be longer if visas are needed.
Mexico: Decide a commercial structure, the most common option is a limited liability company and reserve a name with the Ministry of Economy. Then you can hire a notary to write the incorporation items, register with SAT for fiscal identification and open a corporate bank account. The process can take 3 to 6 weeks depending on the speed with which the documentation can be provided.
Should a business start in the United States or Mexico?
Although the United States and Mexico sacrifice some exciting opportunities for new companies, they meet very different needs that must be tasks in consultation.
Despite the highest costs and strict regulations, the US can support new high growth companies that wish to access a global market and as special in the technology industry.
On the other hand, Mexico is more suitable for new companies with a budget or those that want a rapid business configuration.
Either way, both could be a rewarding company for an entrepreneur with the right idea.
Good luck!
