If you want to start and operate a construction business in New Mexico, you must obtain the proper licenses and insurance. This ensures you have the qualifications and coverage needed to work legally and safely.

Licensed General Contractors in New Mexico

To perform construction work in New Mexico, contractors must hold a license issued by the Construction Industries Division (CID) of the Regulation and Licensing Department. Licenses are required for individual trades like electrical and plumbing, as well as general construction.

The CID issues several classifications of general contractor licenses. Common license types include:

  • GB-2 Residential Building Contractor – For construction, alteration, and repair of detached one- and two-family dwellings up to three stories tall.

  • GB-98 General Building Contractor – For unlimited commercial and residential building projects.

Holding a general contractor license allows you to act as a prime contractor and subcontract work out to specialty trades. Being licensed provides credibility and lets consumers know you’ve met state requirements.

Becoming a Licensed Contractor in New Mexico

To become a licensed general contractor in New Mexico, you must meet eligibility requirements, pass required exams, and submit an application.

Eligibility Requirements

To qualify for a contractor license, you must fulfill experience and education requirements:

  • Experience – Have at least 4 years of experience within the past 10 years in the specific classification you are applying for. Two years of education related to the construction trade can substitute for a maximum of 2 years of experience.

  • Education – Have at least a high school diploma or GED certificate.

  • Qualifying party – Appoint a qualifying party for your business who holds a contractor license in the classification you are applying for. This person is responsible for supervision and oversight of operations.


You must pass two exams to become licensed:

  • Trade exam – Tests your knowledge of the construction trade for the specific classification you are applying for. Offered for various license types.

  • Business and law exam – Covers business organization, financial management, taxes, labor laws, lien laws, and other legal issues. Required for all classifications.

Exams are computer-based and administered at PSI test centers. Study materials and practice tests are available through PSI.

License Application

To apply for a new general contractor license in New Mexico:

  1. Submit an application through CID’s online licensing system.

  2. Pay required fees – $25 application fee plus $200-$350 license fee depending on classification.

  3. Provide proof of meeting eligibility requirements.

  4. Pass required exams.

  5. File an affidavit attesting you have the minimum experience required for the license classification.

  6. Provide certificate(s) showing compliance with workers’ compensation insurance laws.

  7. Post a license bond based on the license fee amount. More details below.

It takes 7-10 business days to process complete new license applications. Licenses can be approved, denied, or referred to a review committee.

Renewing a Contractor License

General contractor licenses in New Mexico must be renewed every 3 years to remain active. To renew:

  • Submit a renewal application and pay a $200-$350 renewal fee depending on classification.

  • Show proof of completing 14 hours of CID-approved continuing education. At least 7 hours must cover technical code changes and/or program updates related to the license type.

  • Maintain compliance with workers’ compensation insurance laws.

  • Keep your $200,000 license bond current.

You can renew your license up to 90 days before expiration. An expired license can be reinstated within 1 year by paying late fees. After 1 year, you must re-apply as a new applicant.

Reciprocity for Out-of-State Contractors

New Mexico does not offer full reciprocity for contractor licenses from other states. However, some allowances are made if you hold an active license in another state.

To get a contractor license via reciprocity in New Mexico:

  • Verify your out-of-state license is current and in good standing.

  • Pass the New Mexico business and law exam.

  • Pay required New Mexico application and licensing fees.

  • File an affidavit confirming you have the minimum experience required for the license type.

  • Comply with workers’ compensation insurance laws.

  • Post a New Mexico license bond.

So you still have to meet New Mexico’s eligibility requirements and testing. But you can skip some steps applied to new applicants.

License Bonds

Licensed contractors in New Mexico must maintain a $200,000 license bond. This bond protects the public if the contractor fails to meet contractual obligations.

To get a license bond:

  • Apply through an insurance company or bonding agency.

  • Pay a premium – typically $200-500 annually depending on your history.

  • Renew the bond when your contractor license is renewed.

  • Keep the bond in force while licensed or until all claims are resolved.

Increase your bond amount if taking on projects exceeding $500,000 in value.

Insurance Requirements

Licensed contractors also need certain insurance policies:

Workers’ Compensation

  • Employees – Carry a workers’ comp policy if you have 3 or more employees – this is mandatory.

  • Exempt – Can file an exemption if you have up to 3 employees and no prior claims.

  • Sole proprietors/partners – Exempt from workers’ comp requirements. But can voluntarily obtain a policy.

Liability Insurance

  • Recommended minimum $1 million per occurrence / $2 million aggregate general liability coverage.

  • Protects against third-party bodily injury and property damage claims.

  • Helps pay legal defense costs.

Builder’s Risk

  • Recommended for large or complex projects to cover materials and equipment at the job site.

  • Protects against theft, vandalism, fire, and natural disasters.

  • Typically included in general liability policies.

Consult an insurance professional to find the right coverage. Maintain certificates showing compliance with all required policies.


Becoming a licensed general contractor allows you to legally operate a construction business in New Mexico. You’ll need to meet experience and testing requirements, obtain a license bond, and carry necessary insurance. General contractor licenses must be renewed every 3 years. Following state licensing and insurance rules helps ensure you and your clients are protected. Use this guide to successfully navigate contractor licensing and insurance requirements in New Mexico.