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Incorporating a Financial Services Company in Mexico - the Mexican SOFOM

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Incorporating a Financial Services Company in Mexico – the Mexican SOFOM

Posted by: Christian Reeves
Category: Bank Holding Company, Business Planning, Financial Services Company, Fintech, Mexico
Mexican SOFOM

As the Mexican financial market continues to evolve, an increasing number of financial services companies, crypto enterprises, and lending businesses are discovering the advantages of incorporating a Sociedad Financiera de Objeto Múltiple (SOFOM). A SOFOM is a non-banking financial institution that provides various financial services to individuals and businesses in Mexico. In this article, we will explore the key benefits of incorporating a SOFOM for your financial services, crypto, or lending business in Mexico.

1. Catering to Underserved Market Segments

One of the primary advantages of operating as a SOFOM is the ability to target underserved market segments that may not have easy access to traditional banking services. This unique position enables companies to capitalize on untapped business opportunities, expand their customer base, and create a niche for their services in the Mexican market. For instance, lending businesses can offer tailored credit solutions to small and medium-sized enterprises, while crypto companies can provide innovative financial products to tech-savvy customers.

2. Specialized Services and Competitive Edge


By incorporating as a SOFOM, your company can focus on providing specialized financial services tailored to the needs of your target market. This specialization can give you a competitive edge in industries such as fintech, crypto, or lending, where innovation and adaptation are paramount. Additionally, as a SOFOM, your company can experiment with new products, services, and business models within a supportive regulatory framework, positioning your company at the forefront of industry advancements.

3. Regulatory Flexibility

SOFOMs can be structured as either a regulated entity (ER) or a non-regulated entity (ENR). This flexibility allows you to choose the level of regulatory oversight that best suits your business needs and risk appetite. While regulated SOFOMs have greater access to institutional funding, non-regulated SOFOMs enjoy more operational flexibility and can focus on niche markets. This adaptability is particularly beneficial for crypto companies, which may require a more agile regulatory environment to thrive.

1. Access to Funding

For businesses operating in capital-intensive industries, such as financial services or lending, access to funding is crucial. Regulated SOFOMs have access to a wide range of institutional funding sources, such as bank loans or debt securities. This access to funding can help your company scale rapidly and seize new market opportunities. Additionally, operating as a SOFOM can enhance your company’s credibility, making it more attractive to potential investors and strategic partners.

2. Innovation-friendly Environment

The Mexican financial landscape has become increasingly supportive of innovation in recent years, making it an ideal location for fintech, crypto, and lending businesses. By operating as a SOFOM, your company can leverage this innovation-friendly environment to develop and implement cutting-edge solutions that cater to the evolving needs of the Mexican market. Furthermore, the supportive regulatory framework surrounding SOFOMs can help your company navigate potential challenges and risks associated with operating in these dynamic sectors.

Types of SOFOMs in Mexico – Regulated and Unregulated 

There are two main types of SOFOMs: regulated entities (Entidades Reguladas or ER) and unregulated entities (Entidades No Reguladas or ENR). In this article, we will delve into the differences between these two types of SOFOMs and explore the advantages and considerations of each for businesses operating in the Mexican financial sector.

Regulated SOFOMs (Entidades Reguladas – ER)

Regulated SOFOMs are subject to oversight and supervision by the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores or CNBV). These SOFOMs must comply with specific rules and regulations, such as minimum capital requirements, reporting standards, and anti-money laundering measures. The key features of ER SOFOMs include:

  • Enhanced credibility: Due to their regulated status, ER SOFOMs enjoy greater credibility among customers, investors, and other stakeholders. This credibility can be crucial for businesses seeking to establish a strong market presence and attract funding.
  • Access to institutional funding sources: ER SOFOMs have access to a wide range of institutional funding sources, such as bank loans or debt securities, which can be essential for businesses operating in capital-intensive industries.
  • Stricter regulatory requirements: While the increased oversight ensures compliance and enhances credibility, ER SOFOMs must also navigate more stringent regulatory requirements, which can be resource-intensive and time-consuming.
  • Operate as a Bank: It is possible to convert a regulated SOFOM into a fully licensed bank in Mexico.

Unregulated SOFOMs (Entidades No Reguladas – ENR)

Unregulated SOFOMs are not directly supervised by the CNBV, and their regulatory oversight is limited. As a result, they are subject to fewer restrictions and enjoy greater operational flexibility. 

The main features of ENR SOFOMs include:

  • Operational flexibility: With less regulatory oversight, ENR SOFOMs can adapt more quickly to changing market conditions and focus on niche markets or specialized services.
  • Easier market entry: ENR SOFOMs typically face fewer barriers to entry, making it easier for new and innovative financial service providers to establish themselves in the Mexican market.
  • Limited access to institutional funding: Due to their unregulated status, ENR SOFOMs generally have more limited access to institutional funding sources. This limitation may require businesses to rely on alternative funding methods or bootstrap their operations.
  • Potential reputational challenges: While ENR SOFOMs enjoy greater operational flexibility, their unregulated status may raise concerns among potential customers, investors, or partners, particularly in terms of compliance and risk management.

The process to incorporate a SOFOM in Mexico

Incorporating a Mexican SOFOM (Sociedad Financiera de Objeto Múltiple) involves several steps, as it requires compliance with various legal and regulatory requirements. The process can be broadly divided into the following stages:

Planning and Decision-Making:

  • Before starting the incorporation process, it is essential to determine the type of SOFOM you wish to establish: Regulated (Entidad Regulada, ER) or Unregulated (Entidad No Regulada, ENR). This decision should be based on your business needs, target market, and risk appetite.
  • This step is very “document” intensive and required a detailed business plan with 5 years of financial projections and information on the shareholders, officers and directors.

Formation of a Mexican Legal Entity:

  • A SOFOM must be incorporated as a Mexican legal entity, either a Sociedad Anónima (S.A.) or a Sociedad Anónima Promotora de Inversión (S.A.P.I.). You will need to prepare the company’s bylaws and other foundational documents, which must be consistent with the General Law of Commercial Companies (Ley General de Sociedades Mercantiles) and the Law of Credit Institutions (Ley de Instituciones de Crédito).

Registration with the Public Registry of Commerce:

  • Once the legal entity has been formed, it must be registered with the Public Registry of Commerce (Registro Público de Comercio). This registration process involves submitting the company’s bylaws and other required documentation, as well as paying the necessary fees.

Obtaining a Tax ID:

  • After registering with the Public Registry of Commerce, you must obtain a tax identification number (RFC) for your SOFOM from the Mexican Tax Administration Service (Servicio de Administración Tributaria, SAT).

Authorization from the National Banking and Securities Commission (CNBV):

  • If you are establishing a Regulated SOFOM (ER), you will need to obtain authorization from the CNBV. This process involves submitting a comprehensive application that includes information about the SOFOM’s management team, shareholders, corporate structure, business plan, risk management policies, and compliance procedures, among other requirements. The CNBV will review the application and, if approved, will issue an authorization for the SOFOM to operate as a regulated entity.

Registration with the Credit Institutions Auxiliary Organizations Registry (RAIO):

  • Both Regulated and Unregulated SOFOMs must register with the Credit Institutions Auxiliary Organizations Registry (Registro de Auxiliares de las Instituciones de Crédito or RAIO). This registry is managed by the CNBV and serves as a public record of SOFOMs operating in Mexico.

Compliance with Anti-Money Laundering (AML) Regulations:

  • SOFOMs must comply with Mexican AML regulations, which include implementing AML policies and procedures, conducting risk assessments, and reporting suspicious transactions to the Financial Intelligence Unit (Unidad de Inteligencia Financiera, UIF).

Ongoing Regulatory Compliance and Reporting:

  • Once your SOFOM is incorporated and operational, you must ensure ongoing compliance with all relevant regulations, including those related to capital requirements, risk management, consumer protection, and reporting obligations. Regulated SOFOMs (ER) will be subject to more stringent regulatory requirements and reporting obligations than Unregulated SOFOMs (ENR).

It is crucial to work with experienced legal and financial advisors throughout the incorporation process to ensure that your SOFOM is structured and operated in compliance with all applicable regulations.


Incorporating a Mexican SOFOM offers numerous benefits for financial services, crypto, and lending businesses, from catering to underserved market segments to providing specialized services and accessing funding. By leveraging the unique advantages of a SOFOM, your company can unlock new opportunities and establish a strong foothold in the rapidly evolving Mexican financial landscape.

In my experience, I recommend filing as an unregulated entity and then applying for regulated status after you have grown the business (if applicable). This will greatly speed up your application and allow you to get to market efficiently.

If you would like more information on the Mexican SOFOM, please send an email to info@banklicense.pro. We will be happy to incorporate your SOFOM, set up your office, and provide all the services necessary to get your business up and running in Mexico.