Our Head of Global Consulting, John Galvin, offers tips for setting up a business and employees in Mexico

Legal Structure: It is possible for foreign owners to wholly-own businesses across most sectors in Mexico. When you are considering how to set up your business in Mexico, talk to us and we can advise on the most appropriate legal structure for you. It is very common for US companies to setup limited liability companies, and we can do this for you without the cost of an expensive attorney. Setting up a branch sounds easier, but in practice it is less common and more onerous than a subsidiary. Talk to us first before you decide.

Employing staff: Mexico has a large pool of skilled labor and is an attractive place to recruit staff. Note that you should hire staff using a local Mexican employment contract, which we can prepare for you. If you don’t, you may find your employment agreement is deemed invalid if you ever have a labor dispute. You may also over time find you are legally committed to additional labor-related liabilities which you were not expecting.

Payroll: Mexico requires you to withhold tax and social security from your employee payroll, which is typically monthly. You will also need to register as an employer in all the local jurisdictions where you hire. We can arrange all this for you.

Relocating US staff: If you will use your US staff to get your business setup in Mexico, make sure you get them the right immigration papers so they can legally work in Mexico. After six months, they can typically become liable for personal withholdings in Mexico also. Our expat planning services will keep your costs down and avoid you paying taxes twice.

Taxes and Accounting: Businesses in Mexico must file financials and tax returns on a monthly basis electronically as well as filing annual returns. We can provide a one-stop service which delivers all these services for you.

What to watch:

• Setting up operations in Mexico can be frustrating for US clients. Many do not realize that setting up a legal entity on its own does not enable them to start hiring. There are other tax and employer registrations required also. Our one-stop service will guide you through all the formalities.