It is important to remember that contracts or other legal documents signed in Mexico by persons who have not obtained the appropriate status to do business in Mexico, i.e. businessmen or persons doing business in Mexico and who do not have legal residence documents, may not be considered legally binding by the parties involved. Person or by mail, which significantly increases efficiency. Only domestic lawyers can be consulted in Mexico because NAFTA does not contain laws that allow U.S. lawyers to practice law in Mexico and are therefore not recognized by the courts if their defence is required. Therefore, U.S. companies must hire a local attorney to handle the process of settling in Mexico. The above requirements (a, b and 7, 8, 9) describe the need to have these documents legalized by the Mexican consulate or embassy in the respective jurisdiction and to have them translated into Spanish by a language expert. There are a variety of resources available to help professionals understand how to do business effectively in Mexico. A good place to start is to check out the following resources. One of the biggest concerns about business in Mexico is uncertainty about the future, especially with regard to ongoing discussions and talks on free trade agreements with the United States.
Its time zones correspond to the Central, Mountain, and Pacific time zones of the United States. Therefore, for a U.S. company doing business in Mexico, it is easy to make phone calls with Mexican business partners and resolve issues during normal business hours. In contrast, for trading partners in Asia, time zone delays and nightly meetings are a constant struggle. Instead of basing its legal system on common law – as is the case in the United States – Mexico follows the civil law tradition. Foreigners can own 100% of a Mexican company and open their business in Mexico. The Mexican legal system and corporate tax laws do not distinguish between foreign and Mexican companies. How risky is it to do business in Mexico? As in the United States, it seems to depend heavily on the geographical location of a company. In the American Chamber of Commerce`s survey of business security in Mexico, companies ranked their top five security concerns as “employee and family safety, information security, freight transportation, the impact of crime, and physical security of facilities.” As mentioned earlier, labor law is particularly difficult in Mexico. To employ employees in your company, you must register with several authorities, the relevant procedures of which must be carried out by a legal representative. Also, since local labor laws favor employees, there are laws that can affect your profits, such as paying certain payroll taxes, which are fully borne by the company. As in any other country in the world, many forms, permits and documents must be completed, read and processed before you can proceed with business transactions or business opportunities.
However, U.S. attorneys can register as legal counsel with a legal team in Mexico if the companies have a legal partner established in the United States. There are a variety of business opportunities in Mexico. According to Export.gov, the most promising industries for exporting to Mexico include agribusiness, airport and ground equipment, automotive parts and accessories, education and training services, franchising, housing and construction, packaging equipment, plastics, security equipment, technology, transportation and infrastructure equipment. If you are driving or renting a car in Mexico, make sure you have all the necessary documents, as the penalty for lack of proper documents can be particularly severe. Drivers who do not have the required documentation may be detained and their car confiscated until all claims are resolved. Given the heavy bureaucracy of the judicial system, their resolution can take a long time. Many U.S. and Canadian insurance documents have no legal effect in Mexico, and often those that offer minimal coverage. Mexico is home to several successful businesses that are also making waves beyond Mexico`s borders. Companies such as telecommunications giant América Móvil, beverage manufacturer FEMSA and food processing leader Grupo Bimbo are testament to Mexico`s power as a place to do business.
It is important to familiarize yourself with Mexican labor law. Foreigners doing business in Mexico should pay attention to their hiring practices and Mexico`s labor laws. Mexico has strict labor laws to protect employees, but a Mexican law firm can help you understand Mexico`s labor laws. In short, no. While there are several types of legal entities that can be considered, it may be in a company`s best interest to first determine whether the potential benefits of incorporation outweigh the risks. There are other options for companies interested in doing business in Mexico that do not require the formation of a legal entity. Fortunately, there are plenty of legal and tax advisors in Mexico and the United States to help you avoid minefields and stay on track for the profitability of your business initiatives in Mexico. So, just plan to include local consultant fees in the cost of doing business in Mexico. Although Mexico`s legal environment may not be familiar in the United States. Business people, fortunately, there is a good selection of Mexican tax and business advisory agencies in Mexico and the United States to help you take advantage of government policy and avoid trouble. Tax legislation in Mexico is not only complex, but can vary by industry. Companies operating in Mexico are required by the Mexican tax administration to set up an electronic accounting system to track all beneficiaries and transactions.
This can result in an overwhelming administrative burden. Equally tedious is the task of paying taxes in Mexico, as accounting and tax regulations have long required a certain level of personal contact.