Hiring Employees – PEO versus Entity Setup in Mexico

Mexico’s large and educated population, proximity to the USA and its diverse range of Regional Trade Agreements (RTAs) make it an attractive region to do business in. Before jumping in and engaging staff in Mexico, you will need to consider the method by which you will hire them. Depending on your business needs, you may hire employees through a local legal entity, or through a Professional Employer Organization (PEO).

Having a large working population with a good pool of candidates is appealing to new companies trying to expand into the Mexican market. However, there are general employment rules in Mexico that have to be considered before hiring employees.

Most countries have specific requirements when it comes to recruitment and Mexico is no different. Mexican employees receive the benefit of shared ownership of the businesses for which they work. If you have an entity in Mexico, be prepared for this profit-sharing requirement when hiring new team members. Employees are entitled to a share of their employer’s profits, which is currently fixed at 10% of the company’s pre-tax income.

Biz Latin Hub can act as your local employer of record and assist you to successfully operate in this region. We invite you to learn more about our accounting and legal experts, our Hiring and International PEO solutions and hiring support that we can provide in Mexico by reviewing our presentation below. This presentation was designed by our local experts and contains all the information you need to know when choosing to hire employees in Mexico.

If you have any more questions about how to hire employees in this vibrant country, reach out to our friendly team in the Mexico office today.

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