CREDIT APPLICATION CHECKLIST
This section provides an overview of the information that should be requested from a customer in Mexico and the responses a creditor can expect to receive. In Mexico, a credit application is enforceable as a contract.
Sample Spanish Credit Application
Business & Owner Identity
Full Legal Business Name
Accounts Payable Contact Name
Accounts Payable Phone
Accounts Payable Email
Accounts Payable Fax
Nature/Type of Business
Years in Business
Parent Company Name
Parent Company Address
Tax Number/Tax Exemption Certificate
VAT - Impuesto al valor agregado (IVA)
Value Added Tax, or Impuesto al valor agregado (IVA) applies to all imports, supplies of goods, and the provision of services by a taxable person unless specifically exempted by a particular law.
The Mexican Tax Administration Service assigns a unique number (Clave en el Registro Federal de Contribuyentes - RFC) to each person enrolled in the Registry; the issued RFC has a special structure depending on the type of taxpayer (individual or legal person). The latter is the only distinction provided for in the Mexican tax provisions. (Source: OECD)
Bank References/Bank Contact
A potential customer should be able to provide bank references and information including the name of the bank, address, their account or CLABE number, and a bank phone number and contact.
Customers should be able to provide at least three trade references on a credit application, regardless of the country where they are based. As this is a common request of creditors one should assume that the customer will put their “best references forward” and this should not be the primary source of information on which to make a credit decision.
Mexican entities listed on the Mexican Stock Market have to issue their financial statements prepared under IFRS. Quarterly reports must include the Financial Information prepared under IFRS. Private companies have no obligation to provide financials. It is important to keep in mind that any financial information received from the customer may not be accurate or audited.
Explanation of any lawsuits outstanding
Asking your customer to provide information on any existing lawsuits is, of course, part of proper due diligence. While there are databases available for searching court records they can be difficult to navigate and, therefore, a credit check for new customers is recommended before considering whether or not to extend credit.
Form of Entity
- Sociedad anónima (S.A.) - stock corporations with either fixed or variable capital.
- Sociedad anónima de capital variable (S.A. de C.V.) – corporation; the most formal business structure in Mexico.
- Sociedad de Responsabilidad Limitada (S. de R.L. de C.V.) - limited liability company (LLC).
- Sociedad de Responsabilidad Limitada de capital variable (S. de R.L. de C.V.) – An LLC in which the corporation may increase its capital, through subsequent contributions of shareholders/partners or by the admission of new shareholders/partners, or decrease its capital by the partial or total withdrawal of shareholders/partners.
- Maquila/IMMEX Company - a Mexican subsidiary wholly-owned by a foreign parent for the purposes of contract manufacturing in Mexico.
- Sociedad en Nombre Colectivo - A collective partnership between one or more partners with unlimited liability. Usually reserved for trade professionals.
- Sociedad en Comandita Simple - partnership with limited and unlimited liability partners.
- Sociedad civil - civil partnership.
- Asociación en participación - joint venture contract.
- Sucursal de sociedad extranjera - branch of a foreign corporation.
- Comerciante - Empresa de persona física - sole proprietorship.
- Asociación civil - civil association, for charitable and other nonprofit corporations.
- Sociedad Anónima Promotora de Inversión (SAPI) -non-listed, limited liability corporation acting mainly as a vehicle for attracting private equity instruments.
Customs & Customs Brokers
In almost all cases, the Mexican buyer is responsible for obtaining permits, making payments to Mexican authorities, and contracting a Mexican Custom Broker. Exporters should use an experienced freight forwarder and Mexican customs broker. It is highly recommended that U.S. exporters verify the full set of import requirements with their foreign customers, who are normally best equipped to research such matters with local authorities, before any goods are shipped. The Mexican Customs Bureau reports that one of the most common mistakes U.S. exporters make relates to a lack of documentation. (Source: U.S. Department of Commerce)