Mexico is the world’s 15th largest economy, and also LATAM’s second-largest, offering access to both North and South American markets. The nation has a skilled, bilingual workforce, with key growth sectors in renewable energy, manufacturing (especially automotive and aerospace), technology, and tourism. Its manufacturing sector has grown dramatically over the past two decades positioning Mexico as a global hub.
Unlock growth opportunities in Mexico with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating Mexico’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in Mexico, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with Mexico’s employment and tax laws, helping you scale confidently and compliantly.
Similar to a US Corporation, S.A. is an entity with unlimited number of shareholders. Earnings are taxed at a corporate level and, as a result, shareholders only pay tax on dividends, they don’t have any personal liability. It is suitable for medium to large businesses.
A Sociedad de Responsabilidad Limitada (S. de R.L.) is similar to a US LLC allows up to 50 shareholders, none of whom are personally liable for company debts. Earnings are taxed at the corporate level, and shareholders are taxed only on distributed dividends. This structure works best for small to medium-sized businesses
A S.A.P.I is similar to a S.A., and is regulated under the Stock Markets Law (Ley del Mercado de Valores) and offers flexibility, especially in the possibility to adopt the administration regime of a public company and acquiring its own shares.
Either a sole administrator or a board of directors is required. At least one legal representative must reside in Mexico and possess a valid RFC.
Either a sole manager or a board of managers is required. At least one legal representative must reside in Mexico and possess a valid Mexican tax ID (RFC).
A board of directors is required.
In Mexico, a corporate bank account can only be opened after legal entity incorporation and RFC issuance. Banks require in-person signings. However, enhanced due diligence may extend timelines for foreign shareholders. The accounts can be in MXN and/or USD, with CLABE standard for transactions.
Mexican banks follow strict KYC/AML regulations. Foreign shareholders may be subject to enhanced due diligence, and processing timelines can vary based on the bank’s internal compliance procedures.
Required documents include the certificate of name registration, directors’ identification, notarized Articles of Incorporation, proof of address, RFC certificate, and identification of the legal representative.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
Employment in Mexico is primarily governed by:
Typically, the standard details mentioned in written contracts include:
In Mexico, there are several types of employment relationships, such as:
Also known as permanent employment, it is the most common type of employment and does not have a specified end date.
These contracts are mostly used for specific projects and have a set end date permissible under certain conditions.
Generally, probationary periods in Mexico range from:
An employer must notify the employee in writing at the time of dismissal or within five working days.
If an employee has been dismissed without just cause, they are entitled to:
Foreign nationals can live and work in Mexico by securing a temporary or permanent residence visa with work authorization. With a valid job offer and employer sponsorship, individuals with the right qualifications may be eligible for temporary or long-term work permits.
Ideal for foreign nationals employed by a Mexican company.
Often used by companies hiring foreign talent into roles requiring specialized skills.
For long-term residence and work eligibility.
Allows employees of foreign companies to transfer to their Mexican affiliate.
Applicable in short-term cases (less common).
Key Notes:
Initially, employers must provide employees with 12 days of paid vacation annually after one year of service, with an increase of 2 additional days for each subsequent year of service, up to a maximum of 20 days after five years of service.
Female employees receive 12 weeks of paid maternity leave. It is generally split into two equal parts, six weeks before and six weeks after childbirth.
Male employees receive 5 days of paid paternity leave. They receive additional leave in case of complications.
First, employees must enroll with the Instituto Mexicano del Seguro Social (IMSS) for sick leave eligibility and provide a medical certificate from an IMSS-affiliated doctor.
The following statutory national holidays are observed in Mexico:
The payroll frequency is usually bi-monthly and monthly. Employees are paid on the 15th and 30th.
The law mandates that employers provide a 13th-month or Christmas bonus (Aguinaldo) before 20 December. The amount is fifteen days of salary, and employees who ahve worked less than a year receive a proportional amount.
Employees in Mexico must pay Social Security taxes, which contribute to Social Security benefits.
The mandatory and statutory benefits in Mexico are:
Both employers and employees must contribute to the social security system, which covers the following:
Accounting standards must adhere to Mexican Financial Reporting Standards, also known as Normas de Información Financiera (NIF) issued by the CINIF.
Public companies must adhere to IFRS, while private companies typically follow NIF.
Companies in Mexico must file annual financial statements and comply with tax reporting to the Servico de Administracion Tributaria (SAT).
Statutory audit is required if a company exceeds two of the following three thresholds for two consecutive fiscal years:
A certified public accountant (Contrador Publico Ceritificado) must perform audits and submit through the SAT electronic system.
The standard corporate tax rate is 30%.
Additionally, the VAT rate in Mexico is 16%.
Certain essential and export goods are subject to a 0% rate.
Furthermore, the filing deadline is typically 31 March of the end of the following year.
In the case of a late return, the penalty ranges from $1,800 to $35,000.
Notably, Mexico follows OECD Transfer Pricing Guidelines, regulated under the Mexican Income Tax Law (MITL).
Mexico has implemented CbC reporting in line with OECD BEPS Action 13.
Transfer pricing documentation is mandatory for companies that exceed certain thresholds.
Master File
Local File
Deadline: To be prepared and made available by May 15 of the following year, but not submitted unless requested by SAT.
Mexico’s data privacy regulations are governed by the Federal Law on Protection of Personal Data held by Private Parties, Ley Federal de Protección de Datos Personales en Posesión de los Particulares, (LFPDPPP).
Mexico’s AML framework is governed by Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin, establishes measures to prevent and detect money laundering activities.
Obligated entities: Banks, insurance firms, casinos, real estate, accountants, lawyers, trust/service providers.
Key requirements include:
Penalties: Fines, revocation, and criminal charges
Reasons you should setup legal entity in Mexico:
Cerity Global ensures your business expansion in Mexico is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your Mexico setup legal entity effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in Mexico.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location. Cerity Global disclaims any liability concerning the accuracy, completeness, or currency of this information.
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