We are frequently asked how to find a job in Mexico. The simple answer is that it’s difficult for a foreigner to find employment in Mexico unless they are relocated by their company or have special qualifications that would favor them over a Mexican citizen. Special qualifications include jobs that require specific managerial, technical, or language skills. For example, a resort in Cancun may offer employment to a foreigner who is bilingual and has international training in hospitality management.
In truth, the best way to find a job in Mexico is to do what many Mexicans do, which is to start your own business. The majority of Mexicans are self-employed in some enterprise, either formally or informally.
Many foreigners have moved to Mexico and started successful businesses. Individual entrepreneurs start various kinds of businesses, such as opening a small hotel, managing a real estate agency, operating a tour company, or simply renting their vacation home. Others work for foreign employers, using the internet to telecommute to the office.
Regardless of the business you conduct in Mexico, however, any income earned while physically in Mexico is subject to Mexican taxation, whether the income is from a foreign or domestic source. For this reason, it’s important to know the laws and requirements for operating a business legally in Mexico. Those who ignore them today take the unnecessary risk of losing their business investment.
Restricted Business Activities for Foreigners in Mexico
There are some business activities in which foreigners are not allowed to participate. Only the Mexican Government can operate a business involved with oil exploration, extraction, or distribution (PEMEX). Another government-owned energy company is the Comisión Federal de Electricidad (CFE), which is Mexico’s electric company.
Some business activities require that all or some of the stockholders or members of the company be Mexican citizens, such as the mining and domestic transportation industries. But most business activities pursued by foreigners are not restricted. If you are unsure if your proposed business activity is restricted, contact us for clarification.
How to Get a Mexican Work Visa
The first step in starting a business in Mexico is to obtain the correct visa. Resident visas with provisions that allow the visa holder to earn income in Mexico are mandatory. The requirements for obtaining one of these visas are straightforward, and if the requirements are satisfied, approval is routine. For comprehensive information about current immigration laws and procedures, download our Immigration Guide.
Note: If you form a company in Mexico, actions taken by a foreigner as an officer of the company without proper visa status will have no legal effect. While the visa process is pending, a special delegate may be appointed to conduct major transactions on behalf of the company.
Understanding Your Mexican Tax Identity (RFC)
There are two types of tax identities in Mexico:
- Persona Física: An individual taxpayer. If you work independently and earn income directly from clients, you pay taxes under this designation.
- Persona Moral: A business entity, such as a corporation or LLC.
The Mexican tax authority is the Servicio de Administración Tributaria (SAT), a division of the Secretaría de Hacienda y Crédito Público (SHCP). They issue a Cédula de Identificación Fiscal bearing your Registro Federal de Contribuyentes (RFC), which serves as your official tax ID number.
Choosing the Right Mexican Business Structure
The business structure you choose will depend on your business activity, level of expected income, type of capital equipment, number of employees, and legal liabilities.
1. Independent Contractor (Persona Física)
If you are an individual providing services directly to clients (such as consultants, translators, photographers, or architects) and accept personal liability, you can conduct business as a persona física. As an independent contractor, you can issue formal tax-compliant invoices called facturas. Income received from these professional services is called honorarios.
Note: Foreigners wanting to perform regulated activities, such as legal or medical services, must validate their credentials (homologación) according to Mexican professional criteria.
2. Limited Liability Company (S. de R.L. de C.V.)
A Mexican LLC is called a Sociedad de Responsabilidad Limitada. Members are liable only for the amount of their investment. This business entity can issue facturas, hire employees, and own real property. Key characteristics include:
- Requires a minimum of two members.
- Members make an initial investment establishing their percentage of ownership.
- Decisions must be approved by a majority of member votes (representing more than 51% of the capital).
- The company can be managed by a single manager or a board of managers.
3. Corporation (S.A. de C.V.)
A Mexican corporation is called a Sociedad Anónima. Shareholders are not personally liable beyond their stock shares. The company can issue facturas, hold real property, and conduct wide commercial operations. Key requirements include:
- Requires a minimum of two shareholders.
- The company may be managed by a single individual (Administrador Único) or a board of directors (Consejo de Administración).
- Ordinary shareholder meetings must be held at least annually to approve financial statements and release directors.
According to the Ley de Inversión Extranjera (Foreign Investment Law), by becoming a shareholder of a Mexican business entity, you agree to be treated like a Mexican citizen regarding property ownership and business operations.
4. Other Business Structures (A.C. and S.C.)
Other business entities include non-profit organizations called Asociación Civil (A.C.), mostly used for charitable groups, and professional partnerships called Sociedad Civil (S.C.), generally comprised of accountants, lawyers, and architects sharing a practice. Contact us for more information on these structures.
Hiring Employees and Mexican Labor Law
One of the advantages of establishing a Mexican company is the ability to hire local staff. However, foreign entrepreneurs must be aware that Mexico’s labor laws strictly protect the employee. It is vital to understand fair treatment, mandatory benefits (aguinaldo, prima vacacional), and legal severance to protect your investment. We highly recommend downloading our Employment Guide before hiring.
Disclaimer: This article represents general information and does not constitute formal legal or accounting advice. Before taking corporate action, always consult with a certified Mexican lawyer or accountant familiar with current tax and commercial laws.
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