Mexico is the second-largest economy in Latin America and is projected to be in the top 10 global economies by 2050. The opportunities for investment are endless, with an ever-growing selection of emerging industries offering good prospects for doing business. Depending on the nature of your business, you might find that hiring staff via a professional employer organization in Mexico is your best option. Note that a law introduced in 2021 placed limits on some types of outsourcing in Mexico.
A professional employer organization (PEO) will hire overseas staff on behalf of a client, allowing that client to avoid establishing a local entity, while securing an international workforce in just the time it takes to find the right workers. The PEO firm will oversee all aspects of the onboarding and management of salaries, and as such will often be referred to as a PEO payroll company. Mexico is one of the most popular destinations in Latin America for foreign investment, particularly from US investors. While the convenience of Mexico’s geographic proximity is one reason for that, the scale of its economy is another. With a gross domestic product (GDP) exceeding $1 trillion (all figures in USD), Mexico has the second-largest economy in Latin America behind only Brazil and in 2019 attracted more than $29 billion in foreign direct investment (FDI) inflows. Mexico is known as a major trade hub, with more than $1.7 billion in goods crossing its border with the United States each day, while major ports serve both the Pacific and Atlantic oceans, giving easy access to US ports on its west and east coasts, as well as to Asia-Pacific and Europe.
While Mexico is well-known for its large agricultural sector and industrial output, with a heavy concentration of manufacturing facilities along the border with the United States, the country is also home to a growing services industry, as well as hosting an increasingly influencial tech and innovation sector. As such, whatever type of business you are doing, Mexico has the human capital available. However partnering up with a local provider with a good understanding of the market and all aspects of employment law in Mexico will help you secure the best talent while remaining in full compliance with the law. For that reason, hiring via a professional employer organization in Mexico might be your best option.
When you hire through a PEO in Mexico, you hand over responsibility for the management of the salaries and benefits of those workers, with the PEO firm also able to assist with their recruitment and drawing up and processing all legal documentation, such as contracts. That is an attractive arrangement for anyone who only needs a small number of local respresentatives, handling sales or overseeing operations. It can also be a good arrangement when hiring a team for a short-term project — such as software developers delivering an individual project. Hiring through a professional employer organziation in Mexico is also a good way of getting to know the market before making a deeper commitment through full company incorporation.
As part of PEO payroll company services, your professional employer organization in Mexico will oversee the regulations and employee benefits, such as working hours, minimum wage, bonuses, profit sharing, vacation, sick leave, and parenthood leave.
If you found this article on finding a professional employer organization in Mexico of interest, you may want to check out the rest of our coverage of this North American country. Or contact Biz Latin Hub for support with your market entry and back-office services in Mexico.
