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Mexico’s Business World

Your bags are packed, and you may already be dreaming of mixing cocktails in Cancún or setting up your own office in Mexico City. However, before you start working in Mexico as an expat, you need to do your homework: Learn more about local labor laws, self-employment, and job-hunting in our Expat Guide!
Before starting a job in Mexico, look into Mexican business culture.

If You Decide to Be Your Own Boss

In knowledge-based industries above all, special skills are in demand. If you prefer self-employment to an office job within a large corporation, be sure to market your skills and experience carefully. For most Mexicans, self-employment — especially at a young age — is not an option since getting the prerequisite funding is often too difficult.

Once incorporated in Mexico, you need to pay attention to the various rules and regulations. A local accountant can help you with the red tape. This will ensure that you’re in compliance with all regulations without taking too much off your budget. Accountant fees are usually very reasonable and a good investment when starting your own business.

Deciding on Your Business Entity

When doing business in Mexico, keep in mind that most Mexican businesses are not too enthused about dealing with sole traders. In some cases, you may not be able to do business at all without a company to back you up. As mentioned, it is always best to seek legal advice to find the right business entity for you.

The main types of firms used by foreigners are as follows:

  • Sociedad de Responsabilidad Limitada (S.R.L. Limited Liability Company)
  • Sociedades cooperativas (cooperative associations)
  • joint ventures

You need to meet with a Notary Public, who will help you set up your business. Notary Publics are appointed by the Governor of State and hold different legal powers and responsibilities. You are required to submit the necessary paperwork as well as identification and your visa. After you have paid your fees, and the paperwork is in order, you will receive your tax ID number (Registro Federal de Contribuyentes or RCF).

Don’t Forget Registering for Taxation in Mexico

Both businesses and individuals working in Mexico need to register with the Ministry of Finance and Public Credit. The amount of tax you will pay while living and working in Mexico depends largely on your residency status. Taxes you may have to pay include:

  • income tax
  • value added tax (on income derived from lease of property, for example)
  • tax on corporate assets

For more information on taxes in Mexico, please contact the Servicio de Administración Tributaria.

Understanding Income Taxes

As a non-resident alien, your salary at a Mexican corporation will only be subject to a withholding tax, which can be as low as 10%, but frequently is around 25%.

Resident aliens are taxed on their income from outside Mexico in the same manner as Mexican citizens. You can avoid paying double taxes, however, if Mexico has signed a treaty to that effect with the country where you normally pay taxes, thus allowing for double taxation relief on a foreign tax credit system. You must file your tax return in Mexico after the close of the tax year (31 December).

The Not Always Favorable Working Conditions

In Mexico, unions negotiate contracts, wages, and benefits directly with large companies and institutions to agree on a collective minimum wage. As the Mexican labor market is extremely competitive, hourly pay and benefits of Mexican employees are much lower than in, for instance, the US.

Working overtime warrants double pay; as does working on Sundays. However, Mexican employees do not enjoy the same amount of annual vacation as employees in many other countries. After working for one year, you are granted six days of paid vacation. The longer you stay with the company, the more vacation days you will be able to earn.


We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete. 

Francois Bertrand

"The last InterNations event was just great: I had some very nice chats with fellow expats (even Canadians like me) in Mexico City. "

Barbara Melington

"With InterNations, we had the chance to find a good bi-lingual school for our children in Mexico. They are gonna grow up as true 'third-culture kids'! "

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