For anyone doing business in the Mexican market or planning to launch there, outsourcing back office services in Mexico is a great way to streamline core operations, while also accessing the local knowledge of an established provider.
Back office services are essentially any element of a business that is not client facing, which is often time-consuming or technical work, such as legal and accounting support, or recruitment and the administration of staff – the latter usually being done via an employer of record in Mexico.
For anyone considering a particular service for outsourcing in Mexico – for example annual or periodic tax returns – hiring a provider specialized in that area is one option.
However, should you want to outsource a number of back office services in Mexico, or think you might begin outsourcing one service and subsequently expand your agreement to cover others, you may find that you are best served by contracting a provider offering a broader portfolio of support services.
That way you can expand, modify, or reduce your services agreement with ease, while having the convenience of only having to deal with a single provider.
For anyone with operations in other markets where they are similarly interested in seeking back office support, or who plans to expand beyond Mexico, finding a provider with an international presence is also a good idea.
Because they will not only be able to cover all of your needs under a single agreement, but will also be in a position to assist you with the likes of cross-border tax planning.
Mexico one of Latin America’s most popular investment destinations
The Mexican market is huge, with its GDP of over $1 trillion (all figures in USD) representing the third-largest economy in North America and the second-largest in Latin America.
Thanks to the size of its economy, as well as its proximity to the United States, the country is a magnet for foreign direct investment, which exceeded $29 billion in 2019.
The importance of the US market is highlighted by the fact that the value of goods crossing the 1,954 mile (3,145 kilometer) land border between Mexico and the United States exceed $1.7 billion per day,
Meanwhile, the presence of major ports serving both the Pacific and Atlantic oceans (the latter via the Gulf of Mexico and Caribbean Sea) on Mexico’s coasts means it is a major hub for trade in the Americas.
In support of trade, Mexico has a range of free trade agreements (FTAs) in place offering resident companies preferential access to major markets around the world, with perhaps the most famous being the US-Mexico-Canada Agreement (USMCA),
As a member of the Pacific Alliance – which also includes Chile, Colombia, and Peru – Mexico is also part of a regional bloc with ambitions to make inroads into the Asia-Pacific region, as highlighted by the acceptance of Singapore as an associate member in the latter part of 2021.
Mexico is well-known for its agricultural and industrial output, as well as for being a major oil producer. However, it is also home to a large and growing services sector, which generates more than 60% of GDP.
The country is also increasingly recognized as a tech and innovation hub, with the city of Guadalajara labeled one of Latin America’s ‘new’ Silicon Valleys, and a significant and growing pool of skilled talent available.
For anyone seeking to take advantage of the opportunities available in the market, they may want to consider outsourcing the following back office services in Mexico:
4 back office services in Mexico to outsource
1. Company formation
The first thing you will need to do when entering the Mexican market is set up your entity. While the country is business friendly, company formation in Mexico is a process that still involves a number of administrative hurdles that a seasoned provider will be able to help you navigate in the smoothest manner possible.
That provider will also be able to offer valuable guidance during your setup, such as the type of entity to establish or the best options in terms of who to bank with or seek other critical services from.
2. Legal services
Company formation is essentially the first legal process you will have to undertake when launching in Mexico, however you will have many more to deal with once your company is up and running, and once again it can be highly beneficial to receive support with them from seasoned local professionals.
That can involve a wide range of critical processes, from the likes of visa processing, to entity compliance or due diligence, which can cause considerable issues if you don’t get them right.
3. Accounting & taxation
A critical element of your compliance will also revolve around accounting and taxation in Mexico, which can be particularly problematic if you don’t get it right, especially when it comes to annual and other periodic financial reporting.
That is perhaps why accounting work is one of the most popular choices when it comes to seeking back office services in Mexico, and a good option to consider for your business.
4. Recruitment & hiring
Securing the best talent can be challenging where you based, making it even more difficult in a less familiar market. By outsourding your hiring, you tap into the providers established recruitment network, as well as their understanding of the best educational and professional profiles to look out for on candidate profiles.
Moreover, if you only need a small number of local employees — such as executives to represent you locally or regionally, or developers to work on a particular project — if you seek out a professional employer organization in Mexico, they will actually be able to hire staff on your behalf, allowing you to avoid going through company formation.
Biz Latin Hub provides back office services in Mexico
At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean. We have offices in 17 key cities around the region, including Mexico City, and our unrivaled reach makes us ideal partners to support multi-jurisdiction market entries and cross-border operations.