Introduction
Mexico stands out as one of Latin America’s strongest economies, offering strategic access to both North and South America. With its extensive trade network including the USMCA agreement, Mexico provides a gateway to global markets while maintaining competitive labor costs and a skilled workforce.
Rapid growth in sectors like manufacturing, technology, and services makes it an attractive destination for companies seeking expansion in a dynamic and business-friendly environment.
EOR & PEO Solutions in Mexico
If you’re looking to hire employees in Mexico without setting up a legal entity, using an Employer of Record (EOR) like Empleyo is the simplest and most compliant path forward. An EOR in Mexico acts as the official legal employer on your behalf, managing everything from payroll and HR administration to employment contracts and statutory employee benefits.
This model allows you to expand into Mexico quickly, while remaining fully compliant with local labor laws without the complexity or cost of registering a local entity.
What Is an Employer of Record in Mexico?
An Employer of Record Mexico (also known as an EOR provider) enables businesses to hire and onboard Mexico employees without having to incorporate in-country. The EOR manages:
- Employment contracts in Mexico
- Monthly payroll and tax filings
- Statutory benefits in Mexico (like social insurance and leave)
- Ongoing HR and compliance responsibilities
What’s the Difference Between EOR and PEO?
A Professional Employer Organization (PEO) typically supports businesses that already have a registered entity in Mexico, offering co-employment solutions for HR, payroll, and benefits. An EOR, however, is ideal when you don’t have a legal presence in Vietnam but still want to hire full-time staff.
Whether you choose an EOR or PEO depends on your Mexico hiring strategy, budget, and long-term plans for the market.
Benefits of Using an EOR Service in Mexico
- Hire employees in Mexico faster, with no setup delays
- Stay compliant with Mexican labor and tax laws
- Avoid the cost of forming and maintaining a local entity
- Access local expertise in employment law and payroll in Mexico
- Simplify HR management while maintaining control over your team
By using an EOR solution, companies can confidently build their team in Mexico, access top talent in Mexico, and stay focused on business growth without getting tangled in bureaucracy.
Hiring in Mexico
Mexico is a thriving market with a growing pool of skilled professionals, making it an ideal destination for businesses looking to expand globally. But to hire in Mexico successfully, it’s important to understand your options especially when you don’t have a legal entity in Mexico.
That’s where using an Employer of Record in Mexico makes all the difference.
Your Hiring Options in Mexico
Businesses have two main paths to hire employees in Mexico:
- Register a local entity, manage payroll and HR directly, and take on full legal responsibility.
- Use an Employer of Record (EOR) a third-party EOR provider that acts as the legal employer in Mexico on your behalf.
The second option is faster, lower-risk, and ideal for companies that want to test the Mexican market, launch quickly, or hire remote employees without permanent infrastructure.
Why Use an EOR to Hire in Mexico?
- Drafting and executing employment contracts in Mexico
- Managing Mexico payroll and mandatory contributions
- Handling employee benefits as required under Mexican labor law
Employment in Mexico
Understanding how employment in Mexico works is key to managing your team successfully and staying compliant. Whether you’re hiring directly or using an Employer of Record (EOR), companies must follow Mexican labor laws closely especially when it comes to employment contracts, payroll, and employee benefits.
That’s why many growing businesses choose to use an EOR in Mexico to handle these responsibilities with confidence.
Employment Contracts in Mexico
All employees in Mexico must be hired under a written employment contract, clearly outlining the job role, salary, benefits, working hours, and duration of employment. Contracts must comply with the Labor Code of Mexico, and are usually signed before or on the first day of work.
By working with a Mexico employer of record, you can ensure that all employment contracts in Mexico are properly structured, compliant, and aligned with local requirements without having to hire a full in-house HR team.
Payroll & Employer Contributions
Payroll in Mexico involves more than just paying a monthly salary. Employers are required to withhold income tax and make contributions to:
- Social Security
- Retirement & Pension
- Work Risk Insurance
- Housing Fund
- Unemployment & Old Age Insurance
These deductions and employer contributions are calculated based on the employee’s gross monthly salary, and must be submitted on time to remain compliant. An EOR in Mexico handles this for you, managing all payroll, tax filings, and reporting on your behalf.
Employee Benefits and Leave
Mexican labor law mandates several employee benefits, including:
- Annual Paid Vacation
- Sick Leave
- Maternity and Paternity Leave
- Paid Public Holidays
- Christmas Bonus (Aguinaldo)
- Profit Sharing
- Severance & Termination Benefits
Using an employer of record service ensures your team in Mexico receives all required benefits and that your business remains fully compliant with Mexican employment law.
Termination & Notice Periods
Ending an employment contract in Mexico requires careful compliance with labor laws to avoid costly disputes. Notice periods vary depending on the reason for termination, and employees are often entitled to severance, accrued benefits, and proportional bonuses such as vacation pay and the year-end “aguinaldo.”
An Employer of Record helps businesses manage these obligations seamlessly, ensuring terminations are handled fairly, legally, and with minimal risk.
Visas & Permits in Mexico
If you’re planning to hire employees in Mexico or bring in foreign talent, understanding Mexico’s visa and permit requirements is critical. Navigating these processes can be complex, but working with a trusted Employer of Record (EOR) in Mexico makes it much easier.
An experienced EOR provider will ensure all permits are handled legally, so you can focus on building your team in Mexico with confidence.
Work Permits for Foreign Employees in Mexico
Foreign nationals who plan to work in Mexico must secure the appropriate work visa and comply with local immigration rules before starting employment. This process involves sponsorship, documentation, and coordination with Mexican authorities, which can be complex and time-sensitive.
An Employer of Record streamlines the process by managing visa requirements, ensuring compliance, and enabling companies to onboard international talent quickly and legally.
Types of Visas for Foreign Talent
There are several types of visas used to work or do business in Mexico, including:
- Temporary work assignment visas
- Long-term employment visas
- Investor and entrepreneur visas
- Business visitor visas
- Specialized professional visas
Each visa type has specific use cases, duration limits, and documentation requirements. If you’re looking to hire in Mexico or send international staff temporarily, an EOR Mexico solution helps you identify the right visa and manage the application process end-to-end.
Business Permits for Foreign Companies
To operate directly in Mexico, foreign companies typically need to register a legal entity in Mexico and apply for a business license. This can be a time-consuming process that includes office registration, investment approvals, and compliance with Mexican labor laws.
Alternatively, you can use an EOR in Mexico to bypass the need for a local entity. The Mexico employer of record is already registered and authorized to employ staff and manage payroll, contracts, and local compliance making it easier and faster to hire employees in Mexico.
Why Visas & Permits Matter for Global Hiring
If you’re hiring foreign employees in Mexico, or placing international staff in-country, it’s essential to stay compliant with immigration laws. The right employer of record service helps you:
- Avoid visa delays or permit denials
- Ensure alignment with Mexican employment law
- Quickly hire and onboard top talent without risk
- Operate legally, even without a registered entity in Mexico
Common Questions on EOR in Mexico
Yes, EOR arrangements are fully compliant when structured according to Mexican labor and tax laws, ensuring employees have proper contracts, benefits, and social security contributions.
Yes, businesses often use an EOR for short-term assignments, pilot operations, or project-based work before deciding whether to establish a permanent entity.
Technology, manufacturing, services, and startups expanding into Latin America benefit significantly, as they can scale teams quickly without complex entity setup.
Yes, an EOR ensures compliance not only with federal labor laws but also with state-specific payroll taxes and regulations where employees are based.
Yes, many businesses use an EOR as a bridge—once they establish their own legal entity in Mexico, employees can be seamlessly transferred while maintaining continuity of employment.
