The “land of enchantment”, New Mexico is considered to have one of the best pro-business environments in the country. Although there are several reasons why you should register a new company in New Mexico the top most is the tax structure created to support manufacturers. According to a report by Ernst & Young, New Mexico has the lowest effective corporate income tax rate for manufacturing. There has also been a 22% reduction in corporate tax across all industries. Some of the other supporting factors for small businesses include:

• Zero inventory tax
• Competitive Incentives
• One of the lowest property tax in the nation
• Low energy costs
• Affordable real estate

Advantages of setting up an LLC Or Corporation

If you are thinking of a startup company in New Mexico then the good news is that the State of New Mexico and its communities are offering existing and future employers or businesses aggressive incentives as this will facilitate job creation as well as investment. The incentives vary from one industry to another with top industries being Advanced Manufacturing, Emerging Technologies, Logistics, Transportation & Distribution, Energy & Natural Resources, and IT & Data Centers. Of course, there are salient advantages on the type of business you form whether it is an LLC or a Corporation in New Mexico.

Advantage#1: Salient benefits of Corporation or LLC formation

Corporation

• Incentives according to industry: Whether you form a C Corporation or an S Corporation, there are several benefits available based on the type of industry you choose e.g., you can leverage the following incentive programs in the Advanced Manufacturing industry:
  –  Trade Support Company in a Border Zone
  –  Angel Investment Credit
  –  High Wage Jobs Tax Credit
  –  Consumables Gross Receipts Tax Deduction for Manufacturers
  –  Investment Tax Credit for Manufacturers
  –  Single Sales Factor
  –  Rural Jobs Tax Credit
  –  Texas/New Mexico Border Residents’ Tax Exemption
• Independent Life: If you register a new business in New Mexico as an S Corporation then the most important advantage is that it will enjoy an independent life. The business entity will continue operation undisturbed even if it faced the death of one of its stockholders.
• Pass through taxation: If you register a new company in New Mexico as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.

LLC

• Flexibility of taxation: When you register a new business in New Mexico as an LLC, the choice of taxation can vary from that of a sole proprietorship, partnership, C Corporation or S corporation and this provides great flexibility.
• Incentives according to industry: If you are planning to form a limited liability company, there are several benefits and incentive programs that you can benefit from. These are available based on the type of industry you choose e.g., you can leverage the following incentive programs in the “Value Added Agriculture” industry:
  – Rural Jobs Tax Credit
  – Consumables Gross Receipts Tax Deduction for Manufacturers
  – Beer & Wine Producers’ Preferential Tax Rate
  – Investment Tax Credit for Manufacturers
  – Opportunity Zone tax credits and other incentives
  – Texas/New Mexico Border Residents’ Tax Exemption
  – Single Sales Factor
• Limited Liability: The owner of a New Mexico LLC will be able to enjoy limited liability protection, which means creditors can sue the LLC but not the owner or investors.

Advantage#2: Business Incentives

There are several factors that are responsible for creating a pro-business climate and the foremost among them are the various incentives and financing programs. A start-up company in New Mexico has to qualify for the incentive programs. Most of these programs are state governed although some are Federal incentive programs. Let’s take a look at a few of such incentive programs:

• High-Wage Jobs Tax Credit: This is a tax credit program that you can qualify for after you register a new company in New Mexico. You can get credit on 10 percent of the wages. The ceiling for this tax credit is $12,000.
• Manufacturers Investment Tax Credit: This is a tax credit aimed at businesses in the manufacturing industry or sector. Your business can get a maximum tax credit of 5.125 percent of the value of machinery or equipment purchased as well as any other property that is being used in business operation. This credit can also be applied against gross receipts, compensating, or withholding tax of up to 85% of the total.
• Rural Jobs Tax Credit: You can apply for this tax credit only after you register a new business in New Mexico. This credit is applied on taxes that are due on (state) gross receipts, personal income tax, or corporate income tax. It is also important to ensure your business is situated in Tier 1 or Tier 2 rural areas. This tax credit can be carried forward for a period of 3 years. Tax Credit Application

Are there any Disadvantages of Incorporating in New Mexico?

If you register a new company in New Mexico, whether domestic or foreign, the business will enjoy benefits that aid in the overall growth process. There are but a few disadvantages although they will not have any negative impact on your business in the long run. The process of incorporation takes more time and is monitored by federal, state as well as local agencies leading to paperwork that is compliant with the regulations. As for an LLC, it can be quite difficult to raise financial capital although that problem is solved by the state based grants and loan programs.

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Now that your business is registered in the state of New Mexico, when can you begin operations? A business ideally can begin operating only after they have acquired a business license or a permit to operate or transact in the said state. At the same time, it is important to remember that not all types of businesses require a license.

New Mexico Business License Requirements

You are probably thinking how you would find out if your business requires a license or a permit or both? Who is responsible for issuing business licenses in New Mexico? These are important questions and hence, we have created a guide that will help you answer some of these questions.

Here is a step-by-step approach towards acquiring New Mexico company license:

Step#1: The Industry or Business Type

The state of New Mexico provides business licenses and permits to different types of businesses. The type of industry or the activities of a business helps in identifying the type of business license required. Different licenses are issued by different state departments. Let’s look at an example to understand this well.

Types of License based on Industry

Alcohol and Gaming – Alcohol and Gaming Division

License fee varies according to the type of establishment. For instance, a Wholesaler license for all types of liquor is $2,500 while a Wine Bottler license fee is $500. There is a separate fee for violations and penalties.

List of Fee and Penalties

Motor Vehicle Sales Finance Companies – Financial Industries Division

The fee for domestic companies is $400 and that of foreign business entities is $500.

Sample License Application

Food service establishment – New Mexico Environment Department (NMED)

If you start a food service establishment then you will require a permit and not a business license.

The different types of license or permit issued by NMED are:

• Retail Food
• Manufactured Food
• Temporary food establishment (TFE)
• Tribal Foods
• Home-Based Food Processor

Sample Application for Food Facility

Note: At the same time, it is important to know that there are certain businesses that may require county or city clerk issued licenses instead of state licenses.

These are some of the categories for which statewide licenses are issued. Click here to check for other NM state licenses.

Step#2: Licenses issued by County

If your business type or service offered doesn’t fall under a statewide license then you will have to check with the local county office. Let’s take a look at an example to understand this better.

If you establish a business in the City of Bloomfield, NM and the focus area of your business is Outdoor/special events then your New Mexico company license will be issued by the City Clerk office.

There is a late fee of $10 on license renewals. The license fee varies according to type of business or service, for example, the fee is $35 for a food vending vehicle (per vehicle).

It is important to note that if, the city clerk after an inspection determines that the issuance of a New Mexico business license will be in conflict with the city, state or federal laws then the chances of the license application being denied will be higher.

Step#3: License Issued

How can you get your license or permit issued? Once you have identified the type of business, industry or service being offered, you need to download the application form and submit it along with the fee to the right authority. You can search here for a state business license type. You can also contact the New Mexico Regulation and Licensing Authority for most of the state licenses. The fee and renewal date will vary according to business type.

On the other hand, if you were to start a business in the City of Roswell then the Business License Clerk in the Code Enforcement Department will be responsible for issuing of the license. The license fee is $35 for Commercial Businesses and the renewal is on the last day of the months of March, June, September, and December (of every year).

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New Mexico has witnessed a growth in its economy as well as formation of new businesses in a range of industries and sectors. As of today, if you are planning to set up a company in New Mexico then some of the industries that you can look at for business growth and profitability include fossil fuel and alternative energy resources, Accommodation and Food Services, Mining and Oil and Gas Extraction, Finance and Insurance, food processing, and high-technology industries. Some of the top companies headquartered in New Mexico include Los Alamos National Security LLC, Lovelace Health System, Presbyterian, TriCore Reference Laboratories, MBF Inspection Services Inc., US Cotton, Mountain View Catering, and JB Henderson Construction among others.

Why Choose New Mexico for Incorporation?

Why should you opt for company incorporation in New Mexico? There are several reasons but above all are the benefits and advantages that businesses enjoy. The fact is that New Mexico provides a variety of economic incentives to small and medium sized enterprises and hence there has seen growth in the number of small businesses in the state.

Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses in this state:

• Texas/New Mexico Border Residents’ Tax Exemption: This is an innovative business incentives that ensures that an enterprise involved in manufacturing, and situated within 20 miles of the Mexican border and has at least 5 New Mexico residents as employees, can qualify for this tax exemption program. The program is being administered by the NM Taxation & Revenue Department and is aimed at helping businesses that set up companies in New Mexico minimize cost, maximize productivity, as well as enhance workforce stability.
• Foreign Trade Zone (FTZ): The Foreign Trade Zone is a designated area that is situated inside New Mexico and is treated as if it is outside the U.S. border for custom entry purpose. If you plan incorporation in New Mexico FTZ then you will be able to import, and manufacture goods while reducing or completely eliminating any custom duties applicable. List of FTZ

How do you incorporate in New Mexico?

Is there a process for company incorporation in New Mexico? Do you require any specific documents? How can you submit or file these documents? These are some of the questions that you will be confronted with and hence the following steps will provide you with information on how incorporation works in New Mexico:

Type of Business

What type of business would you like to form in New Mexico? The most common business structures in the state of New Mexico are corporations, Limited Liability Companies, partnerships, and limited partnerships. If you are planning to form a corporation then you need to identify whether it is a domestic or foreign entity as the documentation, fee, and other aspects would be different. The first step towards company incorporation in New Mexico is to identify the type of business you want to set up.

Business Entity Name

What is the next step towards incorporation in New Mexico? The next step is to identify and reserve a name and this can be done as follows:

• Naming Requirements: The naming requirements for LLC should be pursuant to Section 53-19-3 NMSA 1978 while that of a business corporation should be pursuant to NM Stat § 53-6-6 NMSA 1978. The name of each limited liability company must contain words like “Limited Liability Company” or abbreviations like “L.L.C.” or “LLC”. A corporate name must contain words like “corporation”, or “incorporated” or abbreviations like “corp.” or “inc.”
• Business name search: You need to search for a business name that is not in use currently. You can conduct name search here.
• Name Reservation: Once you have identified business entity name, you can reserve the name with the Secretary of State, Corporation Department for a period of 120 days.
• Name Registration: If you are foreign entity planning to set up a company in New Mexico then you will be required to register your business name with the Secretary of State, Corporation Department pursuant to Section 53-19-50 NMSA 1978.

Choose a Registered Agent

According to NM Stat § 53-6-7 (1996 through 1st Sess 50th Legis) for business corporation and Section 53-19-5 NMSA 1978 for LLC, each business entity needs to designate a registered agent in the state of New Mexico. We are one of the respected registered agents in New Mexico and will be responsible for initiating company incorporation in New Mexico through processing of all your documents including “Articles of Incorporation” for domestic corporations and ” Certificate of Authority” for foreign corporations.

Articles of Incorporation and Certificate of Authority

If you are planning to form a domestic corporation, then you will have to file “Articles of incorporation” pursuant to NM Stat § 53-12-1 to 53-12-6 (1996 through 1st Sess 50th Legis). If you are planning to form a foreign business incorporation in New Mexico then you will be required to file a “Certificate of Authority” pursuant to NM Stat § 53-17-5 tO 53-17-6 NMSA 1978. In order to streamline the process we can file documents on your behalf through the online process or through expedited process.

Date Stamped Copies

As a part of the process of company incorporation in New Mexico, we will ensure, you receive date-stamped and filed copies that verifies the state has filed as well as formed your corporation.

Costs and Fees associated with New Mexico Incorporation

What would it cost to set up company in New Mexico? Check Fees here!

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Do you want to form a business in New Mexico? There are different types of businesses that you can choose from although the most common forms are business corporations and limited liability companies. Today, the “Land of Enchantment” as it is known is seeing a growth of new businesses and it is more so as the economy is strong and stable. A report by U.S. Bureau of Economic Analysis, 2016 revealed that the mining industry has made the highest contribution (almost 3.5%) to the Gross State Product (GSP) as the economy of the state grew by 3.1% in the period between 2010 and 2015.

The big question is how can you form a business in New Mexico business? There is a procedure that is followed and we as one of the top registered agents in New Mexico can assist you with the incorporation or LLC formation process. We will ensure successful set up of your business!

Let’s take a look at how you can incorporate or set up your business in New Mexico.

New Mexico LLC Registration and Formation

LLC company formation in New Mexico is governed by 2006 New Mexico Statutes – Article 19 — Limited Liability Companies, 53-19-1 through 53-19-74. The procedure for registration and formation of LLC is as follows:

Step#1: Maintain a registered agent

If you are planning to form a Limited Liability Company in New Mexico then you will be required to continuously maintain a registered agent in the state pursuant to Section 53-19-5 NMSA 1978. This law is applicable to domestic limited liability companies as well as foreign limited liability companies.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in New Mexico. We can assist you to form a New Mexico business LLC.

Step#2: LLC Name Reservation

One of the foremost steps towards company formation in New Mexico is identifying a name for your business entity. The process is as follows:

• Identify a name for your business entity
• According to Section 53-19-3 NMSA 1978, the name should contain the phrase or words “limited liability company” or the abbreviations “L.L.C.”, or “LLC”.
• The chosen name should be distinguishable and should not be deceptively similar to the name of any limited partnership, corporation, or limited liability company
• Apply for reservation of name pursuant to the provisions of 2006 New Mexico Statutes – Section 53-19-4
• Submit the form though mail or online with the Secretary of State, Corporation Department along with the applicable fee. An LLC can reserve its name for a period of 120 days.

Step#3: Articles of Organization and Application for Registration

If you are planning to form a business in New Mexico as an LLC then the most important step is to prepare and file the proper documents for a Limited Liability Company. The steps are as follows:

• If you want to register a domestic LLC then you will be required to file “Articles of Organization” governed by Section 53-19-8 NMSA 1978.
• If your business entity is a foreign LLC then you will be required to file “Application for Registration” pursuant to Section 53-19-47 to 53-19-56; NMSA 1978.
• The application or documentation for registration of LLC can be filed with the office of the Secretary of the State, Business Services Division, in person or by mail.

We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the LLC registration.

In case, you have any questions regarding how to form a business in New Mexico, feel free to call us on 702-871-8678.

New Mexico Corporation Registration and Formation

If you are planning to form a Corporation in New Mexico then the procedure for registration and formation is as follows:

Step#1: Maintain a Registered Agent

If you are planning to form a business or professional corporation in New Mexico then you will be required to continuously maintain a registered agent in the state pursuant to NM Stat § 53-6-7 (1996 through 1st Sess 50th Legis). This law is applicable to domestic as well as foreign corporations.

We would take this opportunity to share with you the fact that we are one of the top registered agents in the state and have been responsible for over 11,494 businesses set up in New Mexico. We can assist you to form a New Mexico business as we are in compliance with all regulations in the State of New Mexico.

Step#2: Corporate Name Reservation

In order to form a corporation in New Mexico, one of the key steps is identifying a name for your business entity. The process is as follows:

• Identify a name for your business entity
• According to NM Stat § 53-6-6 NMSA 1978, a corporate name should contain the phrase or words “corporation”, “company”, “incorporated”, or the abbreviations “Corp.”, or “Inc.”
• The chosen name should be distinguishable and should not be deceptively similar to the name of any limited liability company, limited partnership, or corporation
• Apply for reservation of name pursuant to NM Stat § 53-11-8 NMSA 1978.
• Submit the form though mail or physically at the New Mexico Secretary of State, Corporation Department along with the applicable fee. A business corporation can reserve its name for a period of 120 days.

Step#3: Articles of Incorporation and Certificate of Authority

If you are planning to form a corporation in New Mexico, then the most important step is to prepare and file the proper documents for a business corporation. The steps are:

• If you want to register a domestic corporation then you will be required to file “Articles of Incorporation” pursuant to NM Stat § 53-12-1 to 53-12-6 (1996 through 1st Sess 50th Legis).
• If your business entity is a foreign corporation then you will be required to file a “Certificate of Authority” pursuant to NM Stat § 53-17-5 to 53-17-6 NMSA 1978.
• The application or documentation for registration of a corporation can be filed with the office of the New Mexico Secretary of State, Business Services Division, in person or through mail.

We can file the form on your behalf as your registered agent in the state and provide you with certified copies of the incorporation.

If you have any questions regarding New Mexico incorporation or LLC formation, you can simply visit the New Mexico Business formation page.

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Business Information & Rankings

• The Milken Institute ranked New Mexico 14th in terms of key indicators for technology business success. (2004)
• New Mexico received a grade of “A” for both employment and infrastructure resources. (The Corporation for Enterprise Development, 2004)
• New Mexico ranked 5th as a State with the best chance of developing their economies through nanotechnology. (Lux Research, 2005)
• Albuquerque, New Mexico ranked 5th Best Place For Business and Careers. (Forbes, 2005)

Cost of Living Index

Crime Rate

New Mexico has the 41st lowest overall crime ranking in the U.S. (FBI, 2004)

Fees & Taxes

Business Inventory Tax
Business inventory is exempt.

Corporate Income Tax
New Mexico’s corporate tax structure consists of three brackets in which all income under $500,000 is taxed at 4.8%, income between $500,000 and $1 million is taxed at 6.4% and all income over $1 million is taxed at 7.6%.

Personal Income Tax
New Mexico’s personal income tax system consists of seven brackets and a top rate of 8.2% starting at an income level of $65,000.

Personal Property Tax
New Mexico is one of the 38 states that collect property taxes at both the state and local levels. New Mexico does not assess tax on intangible personal property.

State Sales and Use Tax
Base Rate: 5 %
Machinery Rate: 5 %

A credit is allowed against the gross receipts tax, compensating tax, or withheld income taxes due in an amount equal to the percent of the compensating tax rate applied to the value of qualified equipment incorporated into manufacturing operation in New Mexico.

Unemployment Insurance
New Mexico’s new employers’ rate is 2.0% for 4 years.

Didn’t find answer to your question? Email as at info@incparadise.com