Unlicensed or unregistered businesses in México are commonly referred to as part of the informal economy (economía informal). These businesses are often called negocios informales or, in a broader sense, operate within the informal sector (sector informal), operating without registration with the Mexican tax authority (SAT) or local licensing.

Key Characteristics and Terms For This Sector


Negocios Informales: Informal businesses, which can range from street vendors to unregistered small shops.

Informalidad: The state of operating without following legal registration, tax compliance, or social security regulations.

Ambulantes: Often used to describe mobile street vendors, who are a major part of the informal sector.

Non-formalized Business: Businesses that lack legal status, which prevents them from easily accessing official bank credit or providing formal social security to workers.

While the formal sector comprises entities such as Sociedades Anónimas (S.A.) and Sociedades de Responsabilidad Limitada (S. de R.L.), the informal sector operates outside this legal framework.

Why This Matters

The Mexican Constitution provides full protection to individuals operating as informal businesses, whereas those who choose to do business with them are not always given the same protection.

The old adage “Buyer Beware” is alive and well in Mexico. If you are concerned, then ask to see a current business license.

As most people in Mexico encourage and support the Informal Business Economy, we make no guarantees regarding the licensing of the businesses or services listed here.