Global Employment Guides
11 mins read
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Published on:
Nov 12, 2026
Updated on:
Nov 12, 2026
Our Employer of Record (EOR) solution makes it easy to hire, pay, and manage global employees.
Book a demoStarting a business in Mexico depends on the company type, but the core steps are largely the same: you have to choose a legal structure, register the company, and complete its tax registration. The effort pays off, with labor costs lower than in the US and much of Europe and a home market of more than 130 million people.
The hard part is timing, since notary appointments, registry filings, and weeks of waiting on a bank account can stall even a well-planned launch. An employer of record (EOR) can shorten that stretch by letting you hire local staff without registering an entity.
Starting a business in Mexico involves choosing a company structure, preparing incorporation documents, registering with the commercial registry, and completing tax registration. Foreign owners can complete some steps through an authorized local representative. If your main goal is to hire employees, an Employer of Record (EOR) may offer an alternative to establishing your own entity.
The General Law of Commercial Companies (Ley General de Sociedades Mercantiles) defines seven types of business entities. Foreign owners most often choose between two of them: the Sociedad de Responsabilidad Limitada de Capital Variable (S. de R.L. de C.V.) and the Sociedad Anónima de Capital Variable (S.A. de C.V.).
“The choice between a Sociedad Anonima and a Sociedad de Responsabilidad Limitada is not paperwork. It shapes governance, liability, and how the entity interacts with IMMEX and tax certification. Getting it wrong at the start is expensive to unwind later.”
Armando Hernandez – CEO and President, H&CO
The wrong business structure can create problems down the line. For example, a new partner or investor may come along, but the existing structure may not allow you to bring them on board. A change in structure would require updates to the legal documents before a notary and a new company registration.
The S. de R.L. de C.V. is a limited liability structure that suits subsidiaries, family businesses, and joint ventures. Partners are liable only up to the amount they invest. The company needs at least two partners and can have up to 50. Mexican law sets no minimum capital. In practice, banks and clients take a new company more seriously with about 50,000 pesos (roughly 2,900 US dollars, or 2,500 euros) in place.
Registration can be done remotely. A local lawyer files the paperwork under a power of attorney, apostilled or issued by a Mexican consulate, so no one has to travel to Mexico at this stage. Starting operations is a different matter. The company’s legal representative must appear at SAT (Servicio de Administración Tributaria) in person to submit biometric data and receive the e.firma electronic signature.
The S.A. is a corporation that works well for businesses aiming to get bigger or attract outside investors. If you need clear rules about who owns what, this is the way to go. A company may be led by a single administrator or a board of directors, depending on what the owners decide. By law, the company must also have a statutory auditor, called a comisario, to keep an eye on how things are managed.
Setting up an S.A. takes at least two shareholders, but there’s no limit on how many people can join. Ownership splits into shares, which makes it simpler for owners to sell their part to someone else.
Mexican law allows several other legal forms, but most serve narrow purposes or limit what nonresidents can do.
The S.A.S. (Sociedad por Acciones Simplificada) is designed for small businesses, startups, and sole proprietors. Since each shareholder must have a valid Mexican digital signature, the S.A.S. is rarely suitable for nonresidents.
The S.A.P.I. (Sociedad Anónima Promotora de Inversión) offers flexible shareholder arrangements and is often used by startups and businesses seeking investment.
A branch serves as a direct extension of the parent company. Once it completes the required commercial and tax registrations, it can start trading and issuing invoices, since no new legal entity is formed.
A representative office has no legal personality and cannot carry out business activity.
The Persona Física con Actividad Empresarial is the Mexican equivalent of a sole proprietor.
Regardless of the company type you choose, the process to start a business in Mexico follows the same main steps. Below is a general overview of what to expect. Some procedures can be done in parallel.
Choose between an S.A. de C.V. and an S. de R.L. de C.V. based on the number of owners and any plans to bring in outside investors. Name the owners, their ownership shares, and the beneficial owners. Appoint a legal representative with authority to handle tax and administrative procedures.
The Secretaría de Economía must approve the company name before the legal setup begins. Applicants usually submit three options, ranked by priority. If the top choice is free and steers clear of existing trademarks and restricted terms, approval usually arrives within one to three business days.
A Notario Público (Notary Public) or Corredor Público (Public Commercial Broker) is required in most company registrations. It makes sense to choose one while the name is still being reserved.
Prepare the founders’ documents, proof of authority for the representatives, ownership details, and the tax address (domicilio fiscal).
The notary formalizes the acta constitutiva (articles of incorporation), the bylaws, and the other founding documents. Foreign shareholders who can’t attend in person need a power of attorney (poder notarial). Documents in a foreign language must come with a certified Spanish translation.
The notarized documents are submitted to the Public Registry of Commerce, Mexico’s public commercial registry. Filing can be done electronically through the SIGER 2.0 system. Once the registration is approved, the company receives an official commercial registry entry, recorded under its electronic commercial folio.
The authorized representative registers the company with SAT and receives the RFC, the company’s tax ID. The company then applies for its e.firma, an electronic signature that many tax and administrative procedures require.
A Mexican company with foreign owners must register with the Registro Nacional de Inversiones Extranjeras (RNIE). The filing is due within 40 business days after the company is formed or the foreign capital arrives.
The bank usually asks for the founding documents, the RFC, the legal representative’s documents, and details on the beneficial owners for KYC checks.
Depending on the location and the type of activity, the company may also need municipal licenses, premises-use permits, or industry approvals.
Before staff starts work, the employer must register with IMSS (Instituto Mexicano del Seguro Social, the social security institute), meet its INFONAVIT (the workers’ housing fund) obligations, and set up payroll. Employment contracts have to follow Mexican law, and each employee must be registered on time.
Each of these registrations also adds a recurring cost. Hiring in Mexico means paying social contributions, regional payroll taxes, and mandatory payments and benefits on top of every salary.
Registering a company in Mexico usually takes 8 to 12 weeks for a foreign owner, counting tax registration and bank account setup. A simple structure with every document ready on day one can finish in 4 to 6 weeks. Complicated cases can stretch to 3 to 5+ months.
Opening the bank account is typically the slowest step and takes 4 to 8 weeks. Other delays come from waiting for an appointment at the tax office, a backlog of cases at the public registry, translation errors, and powers of attorney that are filled out incorrectly.
Hiring plans change the timeline. If you need specialists only for particular projects, independent contractors let you get to work without hiring full-time staff first. Rivermate can help you hire and pay contractors in Mexico in line with local rules and helps avoid misclassification.
Registering and activating a company in Mexico typically costs between MXN 70,000 and 160,000. That budget covers:
notary and registration fees
legal and advisory support
apostille and certified translations
government filings
the initial configuration of taxes, accounting, and payroll
Exact numbers vary with the company type and the professionals you hire. Ongoing employer contributions, payroll taxes, and operating costs start once hiring begins.
Ongoing administration in Mexico includes, among other things, maintaining accounting records, filing tax returns, and managing payroll. On the tax side, corporate income tax is 30%, with provisional payments due by the 17th of each month and the annual return by March 31. VAT (value-added tax) follows the same monthly schedule at 16% (8% in the northern border region and 0% on exports).
Payroll brings its own set of obligations. State payroll tax rates vary by location and can reach 4%, and employers generally distribute 10% of taxable profits to employees under the profit-sharing (PTU) rules, except during a newly established company’s first year. Each payroll payment needs a matching CFDI (Comprobante Fiscal Digital por Internet) receipt.
Managing these obligations takes time and resources. Companies that mainly want to hire in Mexico can use an employer of record (EOR) to handle payroll and employment compliance instead of managing these duties in-house.
A Mexican entity gives full control and suits long-term operations and larger teams, since the company can sign contracts, open bank accounts, and invoice Mexican clients in pesos. The trade-off is weeks of setup, upfront registration costs, and ongoing responsibility for filings and labor compliance.
An EOR lets a company hire within days: it employs the worker in Mexico and handles the contract, payroll, benefits, and labor compliance, while the company directs daily work. The cost per employee depends on the EOR provider.
The table below sums up the main differences:
| Dimension | Own entity | EOR |
|---|---|---|
| Best for | Long-term operations, larger teams | First hires, market tests, urgent roles |
| Setup time | 8 to 12 weeks | 2 to 7 days |
| Upfront cost | Registration, notary, and legal fees | None |
| Ongoing costs | Accounting, payroll, and legal support | Monthly fee per employee |
| Responsibility | Company carries all employer duties | EOR carries employment compliance |
| Control | Full control over contracts, benefits, HR policies | Limited control over benefits and policies |
| Team size | Cost per employee drops as the team grows | Fees add up with every hire |
| Risk | Fines for missed filings and deadlines | Dependence on the provider’s service quality |
Not sure which route fits your plans? Talk to our EOR experts, and they will help you compare timelines and budgets for your case.
Plan for about MXN 70,000 to 160,000. Mexican law sets no minimum capital, so the sum goes mostly to notary, registry, and translation fees.
Foreigners start by choosing a legal structure and registering the company through a Mexican notary. A power of attorney lets the owner handle the paperwork from abroad, and the last steps are tax registration and a bank account.
Yes, the closest equivalent is the S. de R.L. de C.V., Mexico’s limited liability company. It caps owners’ liability at their capital contributions, and foreign investors can hold it in most sectors.
Account Executive
Daan has around one and a half years of experience in the EOR and broader HR space, supporting companies with international hiring and compliance. He works closely with organizations expanding into new markets, helping them navigate the practical and regulatory challenges of building global teams. His approach is straightforward: to be as helpful, responsive, and reliable as possible in every interaction. Whether advising on hiring structures or handling day-to-day questions, his goal is to support clients in ways that make their work easier and more effective. He values the human side of the role and is motivated by the diversity of people and challenges he encounters daily.
Our Employer of Record (EOR) solution makes it easy to hire, pay, and manage global employees.
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