How to register a company in Mexico: Employers’ handbook

Unlock growth in Mexico, Latin America’s economic powerhouse.

Are you planning to expand your business into Mexico? As the second-largest economy in Latin America, Mexico’s strategic location makes it an ideal hub for international business. Thanks to the USMCA trade agreement, favorable operational costs, and a highly skilled workforce, Mexico stands out as a top destination for multinational companies that want to grow and tap into new markets.

While establishing your own company in Mexico can be a strategic move, it’s worth considering alternatives. One effective approach is to work with an Employer of Record (EOR). An EOR can facilitate your entry into the Mexican market by managing all the essential paperwork ensuring you comply with local laws related to employment contracts, minimum wage requirements, employee terminations, and other critical regulations.

The business benefits of registering your company in Mexico

With a robust and growing economy, Mexico is quickly becoming a prime destination for business expansion in Latin America. With a GDP of $1.3 trillion and strong growth projections, this nation offers businesses a wealth of opportunities. Here are some of the key advantages to consider:

1. Market access: Businesses can tap into an expanding consumer base both in Mexico and throughout Latin America. 
2. Trade opportunities: The USMCA offers enhanced trade possibilities with the U.S. and Canada, making cross-border business more efficient. 
3. Cost efficiency: Businesses can benefit from lower labor and infrastructure expenses, reducing overall operational costs. 
4. Skilled labor: Mexico provides access to a diverse and skilled workforce with expertise across various sectors. 

5.Government programs: Initiatives like IMMEX provide tax incentives that can be advantageous for manufacturing operations. 

While these benefits make the country a promising business hub,  setting up a business in Mexico is easier said than done and comes with regulatory complexities. This is where partnering with an Employer of Record (EOR) can prove beneficial.

What is the difference between standard company registration and expanding through an EOR?

Before diving into the registration process, it’s essential to compare the available market entry options in Mexico and choose what best aligns with your business goals.

Aspect	Standard registration	EOR solution
Purpose	Full company ownership and control	Hire employees and manage operations without setting up a legal entity.
Control	Full operational control	EOR handles legal and admin tasks
Cost	High initial investment ($5,000-$10,000+)	Predictable fee
Compliance	Must adhere to local laws, tax regulations, and labor laws.	Managed by EOR
Setup time	2-3 months	24-48 hours
Accessibility	Limited by local entity capacity	Flexible

How EOR simplifies company registration in Mexico

An Employer of Record (EOR) takes care of all legal aspects of employment, including contract creation, payroll, and benefits. You can relax knowing that all your hiring is in line with local Mexican laws.

The main advantages of using an EOR are: 

1. Fast market entry: You can start operations in Mexico within a few days instead of waiting for months. 
2. Legal compliance: Experts ensure adherence to Mexican labor laws and taxes, minimizing compliance risks. 
3. Cost savings: You can skip the high costs of setting up and maintaining a legal entity.
4. Risk management: Professionals take care of employment contracts and make sure workers are properly classified, reducing legal risks. 
5. Local knowledge: You gain access to specialists in Mexico who are well-versed in HR and legal matters, offering valuable guidance and support.

Despite these advantages, registering in Mexico may be essential for your business. Let’s delve into how companies can complete this process successfully.

A step-by-step guide to registering a company in Mexico in 2025

If you choose to establish a legal entity in Mexico, here is a step-by-step guide to ensure a smooth and compliant setup:

Step 1: Choose a business structure

Select the appropriate legal entity type, such as:

• Sociedad Anónima (SA) – Corporation
• Sociedad de Responsabilidad Limitada (SRL) – Limited Liability Company
• Branch Office – For foreign corporations

Step 2: Reserve a company name

Register your desired business name with the Ministry of Economy to ensure its availability.

Step 3: Draft and notarize incorporation documents

Prepare and notarize company bylaws, specifying business objectives, shareholder details, and operational guidelines.

Step 4: Obtain a tax identification number (RFC)

Register with the Mexican Tax Administration Service (SAT) to obtain your tax ID.

Step 5: Open a corporate bank account

Establish a local business bank account to facilitate transactions and payroll.

Step 6: Register with social security and labor authorities

Enroll employees in Mexico’s social security system (IMSS) and comply with labor laws.

Step 7: Obtain necessary business licenses

Depending on your industry, secure relevant permits and approvals from local authorities.

Step 8: Comply with accounting and reporting obligations

Staying compliant is an ongoing process. After you set up your entity in Mexico, you must continue to maintain financial records, file tax returns, and adhere to corporate compliance regulations.

While the registering a business in Mexico is fairly straightforward, it can take time and effort. Companies must consult local experts to ensure compliance at every step. Lets consider how much these steps can cost your business.

The real cost of registering a business in Mexico

Starting a business in Mexico is a great opportunity, but understanding the costs is vital for effective financial planning. Handling registration fees, legal requirements, and operational expenses can add up fast.

Initial costs:

• Name reservation: $100-200
• Notary fees: $1,000-2,000
• Minimum capital requirement: $3,000 (variable by structure)
• Government registration fees: $500-1,000

Ongoing costs:

• Annual accounting services: $3,000-6,000
• Corporate tax compliance: $2,000-4,000
• Statutory representation: $1,000-2,000
• Office space (if required): $200-500 per month

These costs may vary from time to time and from company to company. Using an EOR Can improve predictability and prevent the additional costs you may incur if compliance errors occur.

Cost comparison: Standard registration vs. EOR

When you choose traditional company registration over using an EOR, it can affect your budget and agility.

Let’s compare both options side-by-side:

Cost category	Standard registration	Employer of Record (EOR)
Initial setup	$5,000-10,000	None
Monthly operations	$2,000-4,000	$500-1,000 per employee
Annual compliance	$3,000-6,000	Included
Exit costs	$2,000-5,000	None

Without proper preparation, you might face delays or unexpected financial challenges. Partnering with an EOR like Multiplier provides cost predictability and minimizes administrative complexities so your company can grow cost-effectively and efficiently.

Grow your business in Mexico with Multiplier

Expanding into Mexico doesn’t have to be complicated. With Multiplier’s Employer of Record, you can confidently hire, manage payroll, and stay compliant without establishing a local entity. 

Benefits of Multiplier EOR platform:

• Local hiring expertise: Ensures legally compliant contracts and smooth onboarding.
• Hassle-free payroll management: Handles payroll, benefits, and tax compliance so your HR teams don’t have to take on additional administrative and legal burdens.
• Comprehensive HR solutions: Streamlines expense management, time-off tracking, and workforce administration.
• Compliance assurance: Ensures complete adherence to Mexican labor laws and tax regulations.
• Reliable support: Provides 24/7 support and expert guidance with dedicated managers and local experts.

Ready to expand into Mexico? Book a demo with Multiplier today to see how our experts can help you scale with ease.