Understanding Payroll Compliance in Mexico

Payroll compliance refers to the processes and systems that companies implement to meet their legal and financial responsibilities when paying employees. In Mexico, payroll compliance is multifaceted, involving federal and state-level tax laws, social security contributions, and employment regulations outlined by the Mexican Federal Labor Law (Ley Federal del Trabajo).

As an employer, you need to ensure that your payroll processes are set up correctly to avoid potential issues. Here are the core aspects of payroll compliance in Mexico:

Key Components of Payroll Compliance in Mexico

1. Employment Contracts

   Every employee in Mexico must have a formal employment contract. This contract should clearly outline the terms of employment, including job responsibilities, salary, benefits, and working hours. Without a valid contract, companies may face legal challenges.

2. Social Security Contributions (IMSS)

   Employers in Mexico are required to contribute to the Mexican Social Security Institute (IMSS). The IMSS provides medical, disability, and retirement benefits to employees. As part of payroll compliance, companies must calculate and remit these contributions accurately on behalf of their employees. The employer contribution ranges between 15-25% of an employee’s salary.

3. Payroll Taxes

   In Mexico, employers must comply with both federal and local tax regulations. Payroll taxes are levied on employee salaries and include:

   • Income Tax (ISR): Employers must withhold income tax (ISR – Impuesto Sobre la Renta) from employees’ salaries. The rates are progressive, ranging from 1.92% to 35%, depending on the employee’s income.
   • Value-Added Tax (VAT): While VAT (IVA – Impuesto al Valor Agregado) is not directly tied to payroll, it’s essential to understand its implications in other areas of the business.
   • Payroll Tax (ISN): This is a state-level tax that varies between 1% and 3% of the employee’s salary, depending on the state in which the employee works. Companies must register with local tax authorities in each state where they have employees to ensure compliance with this obligation.
4. Profit Sharing (PTU)

   Mexican law mandates that companies share a portion of their annual profits with employees. Known as PTU (Participación de los Trabajadores en las Utilidades), this requirement involves distributing 10% of the company’s taxable income to employees. PTU payments must be made within 60 days after filing the company’s annual tax return.

5. Employee Benefits

   Certain benefits are mandatory under Mexican labor law, such as:

   • Aguinaldo (Christmas Bonus): Employers are required to pay a Christmas bonus equivalent to at least 15 days’ salary by December 20th each year.
   • Vacation Pay: After one year of employment, employees are entitled to six paid vacation days. This entitlement increases by two days for each subsequent year, up to 12 days. After that, additional vacation time is awarded every five years of service.
   • Vacation Premium: In addition to vacation pay, employers must also provide a vacation premium equivalent to 25% of the employee’s salary for the vacation period.
6. Work Hours and Overtime Pay

   Mexican labor laws regulate the maximum number of working hours and require additional overtime pay. The standard workweek is 48 hours (six days), and any work beyond this must be compensated as overtime. Overtime rates are typically double the normal hourly wage, and if overtime exceeds nine hours per week, it must be paid at triple the normal rate.

7. Electronic Payroll Receipts (CFDI)

   In Mexico, employers are required to issue CFDI (Comprobante Fiscal Digital por Internet) for payroll payments. These are electronic tax receipts that document salaries, wages, and other payroll-related transactions. The CFDI system is part of the country’s tax digitization efforts, and failing to issue these receipts correctly can lead to significant fines.

8. Union Agreements and Collective Bargaining

   Many industries in Mexico have strong union representation. Union agreements, known as collective bargaining agreements (CBAs), can stipulate additional payroll conditions that go beyond the basic requirements of federal labor law. These may include higher pay scales, extra benefits, and specific working conditions. Companies must honor these agreements as part of their payroll compliance.

Payroll Tax Laws in Mexico: An Overview

Mexico has a dual tax system that incorporates both federal and state-level taxes. Payroll tax laws primarily include income tax (ISR), value-added tax (VAT), and local payroll tax (ISN). Let’s explore these in detail:

Income Tax (ISR)

The ISR is a federal tax levied on the income of both individuals and businesses. For employees, this tax is withheld by the employer and must be reported to the tax authority (SAT – Servicio de Administración Tributaria) monthly. The income tax rate in Mexico is progressive, ranging from 1.92% to 35%, based on an employee’s annual income.

Employers must use the SAT’s income tax tables to determine the correct amount of ISR to withhold from each employee’s paycheck.

Value-Added Tax (VAT)

The VAT (IVA) is another important tax in Mexico, but it is not directly related to payroll. However, companies must be aware of VAT obligations for other business transactions. The general VAT rate in Mexico is 16%.

Local Payroll Tax (ISN)

In addition to federal income tax, employers in Mexico must pay a payroll tax (ISN) at the state level. The rates vary by state but generally range between 1% and 3% of the employee’s salary. Employers must register with the state tax authority and ensure timely payment of these taxes.

Penalties for Non-Compliance

Non-compliance with payroll regulations and tax laws in Mexico can result in severe penalties. Some of the most common issues include failure to:

• Properly calculate and remit ISR or IMSS contributions.
• Issue CFDI receipts for payroll payments.
• Adhere to mandatory employee benefits or vacation pay requirements.

Penalties for non-compliance can range from monetary fines to more severe consequences, including legal action. For example, failure to pay ISR or IMSS contributions can result in fines of up to 100% of the unpaid amount. Employers may also be held liable for back pay and other damages if they fail to provide the correct benefits or misclassify employees.

Best Practices for Payroll Compliance in Mexico

To avoid potential legal issues and penalties, businesses operating in Mexico should follow these best practices:

1. Stay Informed About Local Tax Laws: Tax regulations in Mexico can change frequently, particularly at the state level. Ensure that your payroll team stays updated on any income tax rate changes, IMSS contributions, and state payroll taxes.
2. Invest in Payroll Software: Utilizing payroll software that integrates with Mexico’s CFDI system will help ensure that payroll records are accurate and compliant with tax authorities. Many payroll platforms offer automated ISR calculations, social security contributions, and electronic receipt generation.
3. Outsource Payroll Services: For companies without the internal capacity to manage payroll in-house, outsourcing payroll services to a local provider can be a smart option. These providers specialize in handling payroll compliance, ensuring that all legal and tax obligations are met.
4. Maintain Accurate Records: Proper record-keeping is essential for payroll compliance in Mexico. Keep detailed records of all employee contracts, wage payments, and tax remittances. This will help your business avoid disputes with employees and government agencies.

Navigating payroll compliance and local tax laws in Mexico is a challenging yet crucial part of doing business in the country. From understanding ISR and IMSS contributions to issuing electronic payroll receipts and staying compliant with state payroll taxes, employers must manage various responsibilities to avoid legal repercussions.

By staying informed, using reliable payroll systems, and following best practices, businesses can successfully meet their obligations and foster a compliant, productive workforce in Mexico.

Get Assistance from Easyco Experts!

Mexico is a great country to start your business, being a country open to foreign investment with a favorable legal structure for companies. Our experts can help you register your company in Mexico and assist with the formalities and compliance along the process.

• Appointment of legal representation

• Providing a registered office address

• Handling tax and accounting

• Hassle-free Payroll Services

• Manage your Trademark Registration

• Recruiting and Hiring Talent

• Corporate Legal Services

The post Payroll Compliance and Local Tax Laws in Mexico appeared first on Easyco.

In this blog post, we’ll delve into how technology is simplifying and accelerating the process of establishing a new business in Mexico, empowering entrepreneurs to navigate the registration landscape more efficiently and effectively.

The Rise of Digital Government Services in Mexico

Mexico has been at the forefront of embracing digital government initiatives, aimed at improving the ease of doing business and enhancing transparency for both local and foreign entrepreneurs. The country’s e-government efforts have led to the development of streamlined, online platforms for business registration, tax filing, and other key administrative tasks.

One such initiative is the Secretaría de Economía’s (Ministry of Economy) digital portal, which allows entrepreneurs to complete the entire company registration process entirely online. This includes reserving a business name, filing the necessary legal documents, and obtaining the required licenses and permits – all without the need for physical visits to government offices.

The Integration of Blockchain Technology

Building on its digital transformation initiatives, Mexico has also been exploring the integration of blockchain technology to further streamline the company registration process. The use of blockchain-based systems can provide several key benefits, including:

1. Increased Transparency: Blockchain-powered platforms can create a tamper-proof, decentralized record of all business registration transactions, enhancing transparency and reducing the risk of fraud or errors.
2. Faster Processing Times: Blockchain’s distributed ledger technology can facilitate the instantaneous verification and approval of registration documents, significantly reducing the time it takes to establish a new company.
3. Enhanced Data Security: The inherent security features of blockchain technology can help protect sensitive business and personal data involved in the registration process, providing an additional layer of protection for entrepreneurs.

The Impact of Digital Transformation on Entrepreneurs

The integration of digital technologies into Mexico’s company registration process has had a profound impact on entrepreneurs, both domestic and international, who are looking to establish a presence in the country. Some of the key benefits include:

1. Simplified Compliance: The digitalization of administrative tasks, such as tax filing and permit applications, has reduced the complexity and time-consuming nature of compliance, allowing entrepreneurs to focus on core business activities.
2. Improved Accessibility: Online registration platforms have made the process more accessible, particularly for entrepreneurs located outside of Mexico’s major urban centers, enabling them to register their businesses remotely.
3. Enhanced Efficiency: The streamlined, digital-first approach to company registration has resulted in faster turnaround times, allowing entrepreneurs to get their businesses up and running more quickly.
4. Cost Savings: The elimination of the need for physical document submissions and in-person visits to government offices has led to significant cost savings for entrepreneurs, further enhancing the overall feasibility of establishing a business in Mexico.

Leveraging Professional Guidance

While the digitalization of Mexico’s company registration process has made it more accessible and efficient for entrepreneurs, navigating the nuances of the system can still benefit from the guidance of experienced legal and financial professionals. These experts can provide valuable insights into the latest digital tools and platforms, ensure compliance with all relevant regulations, and help entrepreneurs maximize the benefits of Mexico’s digital transformation efforts.

Mexico’s embrace of digital transformation has had a profound impact on the company registration process, empowering entrepreneurs to establish their businesses more efficiently and effectively. By leveraging innovative technologies, such as blockchain and e-government platforms, the country is creating a more conducive environment for entrepreneurship and economic growth.

As Mexico continues to evolve its digital infrastructure and streamline administrative procedures, the opportunities for entrepreneurs, both domestic and international, will only continue to expand. By staying informed about the latest developments and seeking the guidance of knowledgeable professionals, entrepreneurs can navigate the registration landscape with confidence and position their businesses for success in this dynamic, technology-driven market.

Get Assistance from Easyco Experts!

Mexico is a great country to start your business, being a country open to foreign investment with a favorable legal structure for companies. Our experts can help you register your company in Mexico and assist with the formalities and compliance along the process.

• Appointment of legal representation

• Providing a registered office address

• Handling tax and accounting

• Hassle-free Payroll Services

• Manage your Company bank account opening

• Manage your Trademark Registration

• Recruiting and Hiring Talent

• Corporate Legal Services

The post Accelerating Business Growth in Mexico Through Digital Transformation appeared first on Easyco.

Taxation Overview in Mexico

Mexico’s tax system is managed by the Servicio de Administración Tributaria (SAT), the nation’s tax authority. New businesses must comply with various tax obligations, including corporate income tax, value-added tax (VAT), and payroll taxes. Here are the primary taxation requirements:

1. Corporate Income Tax (ISR):
   • The standard corporate income tax rate in Mexico is 30%.
   • Businesses must file annual tax returns and make monthly provisional payments.
2. Value-Added Tax (VAT):
   • VAT, or “Impuesto al Valor Agregado (IVA),” is levied on the sale of goods, services, and certain imports.
   • The standard VAT rate is 16%, with a reduced rate of 0% for specific items like basic foodstuffs and medicines.
   • Businesses must file monthly VAT returns and remit the collected tax to SAT.
3. Payroll Taxes:
   • Employers must withhold income tax from employees’ salaries and remit it to SAT.
   • Social security contributions are also mandatory, covering health, retirement, and other benefits.

Registration and Compliance

To comply with taxation requirements, new businesses in Mexico must undertake the following steps:

1. Obtain a Federal Taxpayer Registration (RFC):
   • Registering for an RFC with SAT is mandatory for all businesses. This unique identifier is used for all tax-related activities.
2. E-Signature (e.firma):
   • An electronic signature is required for various transactions with SAT, including filing tax returns and accessing government services.
3. Monthly and Annual Filings:
   • Businesses must file monthly tax returns for corporate income tax and VAT.
   • An annual tax return consolidating all financial activities must be submitted by March 31st of the following year.
4. Electronic Invoicing (CFDI):
   • Mexico mandates the use of electronic invoices (CFDI) for all transactions. This system enhances transparency and reduces tax evasion.

Accounting Standards and Requirements

Mexico’s accounting standards are aligned with the International Financial Reporting Standards (IFRS), ensuring consistency and transparency in financial reporting. Key accounting requirements include:

1. Bookkeeping:
   • Accurate and timely bookkeeping is essential. Businesses must maintain detailed records of all transactions, including sales, expenses, and payroll.
   • Records must be kept for at least five years and be available for SAT inspection.
2. Financial Statements:
   • Companies must prepare financial statements annually, including a balance sheet, income statement, and cash flow statement.
   • Financial statements must be audited by a certified public accountant if the business exceeds certain thresholds in terms of revenue or assets.
3. Electronic Accounting:
   • Businesses are required to submit electronic accounting reports to SAT. This includes the chart of accounts, trial balance, and journal entries.
   • Reports must be submitted monthly and are subject to SAT’s verification.

Common Challenges and Solutions

Navigating Mexico’s taxation and accounting requirements can be complex, especially for new businesses. Common challenges include:

1. Understanding Tax Obligations:
   • Tax regulations can be intricate and frequently updated. Engaging a knowledgeable tax advisor can ensure compliance and optimize tax planning.
2. Maintaining Accurate Records:
   • Inadequate record-keeping can lead to compliance issues and penalties. Implementing robust accounting software can streamline bookkeeping and reporting.
3. Meeting Filing Deadlines:
   • Missing tax filing deadlines can result in fines and interest charges. Setting up reminders and automated systems can help manage timely submissions.

In conclusion, understanding and complying with taxation and accounting requirements is vital for new businesses in Mexico. By obtaining the necessary registrations, adhering to filing deadlines, and maintaining accurate records, businesses can navigate the complexities of Mexico’s tax system effectively. Leveraging professional advice and digital tools can further enhance compliance and operational efficiency. As Mexico continues to attract entrepreneurs with its dynamic market, being well-prepared for the tax and accounting landscape will contribute significantly to the success and sustainability of new ventures.

By staying informed and proactive, new businesses can focus on growth and innovation, contributing to Mexico’s thriving economy.

Get Assistance from Easyco Experts!

Mexico is a great country to start your business, being a country open to foreign investment with a favorable legal structure for companies. Our experts can help you register your company in Mexico and assist with the formalities and compliance along the process.

• Appointment of legal representation

• Providing a registered office address

• Handling tax and accounting

• Hassle-free Payroll Services

• Manage your Company bank account opening

• Manage your Trademark Registration

• Recruiting and Hiring Talent

• Corporate Legal Services

The post Understanding Taxation and Accounting Requirements for New Businesses in Mexico appeared first on Easyco.

Why Trademark Registration Matters

In Mexico’s competitive business landscape, establishing a unique brand identity is essential for success. Trademark registration protects your intellectual property and confers exclusive rights, preventing unauthorized use by others.

The Registration Process

1. Pre-Filing Research: Before initiating the registration process, conduct thorough research to ensure the uniqueness of your trademark. The Mexican Institute of Industrial Property (IMPI) provides an online database for preliminary searches.
2. Choose the Right Classification: Classify your goods or services correctly. Mexico follows the NICE Classification system and accurately selecting the applicable classes is crucial for successful registration.
3. Prepare and Submit the Application: Compile the necessary documents, including a clear representation of your trademark. Apply IMPI either online or in person. Be prepared to pay the associated fees.
4. Examination and Publication: IMPI will examine your application for compliance. Once approved, your trademark will be published in the Official Gazette for third-party opposition. If no opposition arises, your trademark moves to the next stage.
5. Issuance of the Registration Certificate: After successfully navigating the opposition period, IMPI will issue your trademark registration certificate. This certificate grants exclusive rights to use the trademark in connection with the registered goods or services.

Maintenance and Renewal

Trademark registrations in Mexico are valid for ten years, and renewal is possible indefinitely. Regularly monitor your renewal deadlines to ensure continuous protection.

Enforcement and Protection

Having a registered trademark provides a legal basis for enforcement against infringement. Mexico’s legal framework supports the protection of intellectual property, allowing you to take legal action against unauthorized use.

Benefits of Trademark Registration

1. Exclusive Rights: Enjoy exclusive rights to your brand, building brand recognition and trust.
2. Legal Recourse: A registered trademark provides a legal basis for pursuing legal action against infringement.
3. Market Differentiation: Stand out in the market by securing a unique identity for your products or services.

Trademark registration in Mexico is a strategic move for safeguarding your brand in a competitive market. By understanding the registration process and leveraging the protection it provides, businesses can thrive and build a lasting presence in the Mexican business landscape.

Get Assistance from Easyco Experts!

Mexico is a great country to start your business, being a country open to foreign investment with a favorable legal structure for companies. Our experts can help you register your company in Mexico and assist with the formalities and compliance along the process.

• Appointment of legal representation

• Providing a registered office address

• Handling tax and accounting

• Hassle-free Payroll Services

• Manage your Company bank account opening

• Manage your Trademark Registration

• Recruiting and Hiring Talent

• Corporate Legal Services

The post Trademark Registration in Mexico appeared first on Easyco.

Regulatory Landscape in Mexico

Navigating the intricate web of tax regulations and compliance standards in Mexico can be a daunting task. From a legal and compliance perspective, outsourcing tax and accounting services can provide companies with a competitive edge. External experts well-versed in the nuances of Mexican tax laws can ensure that your business remains compliant while optimizing financial strategies.

Cost Efficiency and Resource Optimization

One of the primary motivations for outsourcing tax and accounting services is the potential for significant cost savings. By leveraging external expertise, companies can avoid the need to invest in extensive in-house teams and ongoing training. This not only reduces operational costs but also allows businesses to allocate resources more strategically, focusing on core competencies and business growth.

Access to Specialized Knowledge

Legal and compliance services providers bring a wealth of specialized knowledge to the table. In the context of Mexico, where regulations may evolve and present unique challenges, having experts who stay abreast of these changes is invaluable. Outsourcing ensures that your company benefits from the latest industry insights, minimizing the risk of non-compliance and associated penalties.

Flexibility and Scalability

Outsourcing tax and accounting services in Mexico provides businesses with the flexibility to scale their operations efficiently. Whether facing seasonal fluctuations or rapid growth, external service providers can adapt to changing needs. This scalability is crucial for companies seeking to maintain agility in response to market dynamics and regulatory shifts.

Risk Mitigation

Mitigating risk is a cornerstone of effective legal and compliance strategies. Outsourcing tax and accounting services in Mexico allows companies to transfer certain risks to external experts who specialize in managing and mitigating them. This risk-sharing arrangement not only enhances the overall risk management framework but also contributes to long-term sustainability.

The post Tax and Accounting Services in Mexico appeared first on Easyco.

Step 1: Choose the right bank

The first step in opening a corporate bank account in Mexico is to choose the right bank. It is essential to research various banks and compare their offerings to determine which one best suits your business needs. Some of the popular banks in Mexico are BBVA Bancomer, Santander Mexico, and Banorte.

Step 2: Gather the necessary documents

Once you have decided on the bank, the next step is to gather the necessary documents. The documents required may vary depending on the bank you choose, but the following are the general requirements:

• Proof of business registration in Mexico
• Identification documents of the company’s legal representative(s)
• Proof of address of the company’s legal representative(s)
• Tax identification number (RFC) of the company
• Financial statements of the company

It is advisable to contact the bank beforehand to confirm the documents required.

Step 3: Schedule an appointment

After gathering the necessary documents, the next step is to schedule an appointment with the bank to submit the documents and open the account. You can do this either by visiting the bank in person or through the bank’s website.

Step 4: Submit the documents

At the scheduled appointment, you will be required to submit the necessary documents to the bank. The bank representative will review the documents and verify their authenticity.

Step 5: Deposit initial funds

Once the bank representative has verified the documents, you will be required to deposit an initial amount to activate the account. The amount may vary depending on the bank, but it is generally around MXN 10,000 (approximately USD 500).

Step 6: Wait for account activation

After depositing the initial funds, you will need to wait for the account to be activated. The activation process may take a few days to a week, depending on the bank. Once the account is activated, you will receive the account details and can start using the account for business transactions.

In conclusion, opening a corporate bank account in Mexico requires careful planning and research. By following the steps outlined above and ensuring that you have all the necessary documents, you can successfully open a corporate bank account in Mexico and start conducting business operations in the country.

How to Register a Company in Mexico?

1. Select the appropriate type of company in Mexico
2. Request the company name from the Ministry of Foreign Relations (SRE)
3. Prepare the Articles of Incorporation
4. Obtain your Tax ID or RFC
5. Register the company in the Mexican Public Registry
6. Register the company with the Mexican Social Security Agency (IMSS)
7. Register the company in the Mexican Registry of Foreign Investment (RNIE)
8. Register with the other required Government organizations
9. Open a corporate bank account

The post How to Open a Corporate Bank Account in Mexico? appeared first on Easyco.

This can be a great way to reach new customers and expand your business into new markets. Here are the steps you need to take to get started:

1. Register for a Seller Account

To start selling on Amazon Mexico, you will need to create a seller account on Amazon’s website. There are two types of accounts available: individual and professional. The individual account is free, but you will be charged a fee for each item you sell. The professional account requires a monthly fee but has more benefits and lower per-item fees.

2. Set up your account information

After registering for your seller account, you will need to complete your account information. This includes your contact information, payment information, and tax information. You will also need to provide information about the products you plan to sell, including their categories and ASINs.

3. List your products

Once you have set up your account information, you can start listing your products on Amazon Mexico. You can do this manually, or you can use Amazon’s bulk upload tool to upload multiple products at once. You will need to provide product information such as the title, description, images, and price.

4. Fulfill your orders

When a customer places an order for one of your products, you will need to fulfill it. You can do this by either shipping the product yourself or using Amazon’s fulfillment services. If you choose to use Amazon’s fulfillment services, they will handle the shipping, packing, and customer service for you.

5. Manage your account

As your business grows, you will need to manage your account to ensure that everything runs smoothly. This includes monitoring your orders, managing your inventory, and handling customer service inquiries.

What do I need to start selling in Amazon Mexico?

In terms of requirements, you will need to have a tax ID number and a bank account in Mexico to sell on Amazon Mexico. You will also need to comply with Mexican tax laws and regulations.

When it comes to the information you find relevant, it is important to note that Amazon has a strict set of rules and guidelines that you must follow as a seller. These include requirements around product quality, shipping times, and customer service. It is important to read and understand these guidelines before you start selling on Amazon Mexico to ensure that you are providing a good experience for your customers.

In addition, you may want to research the competition in your product category to determine pricing strategies and identify potential gaps in the market that you can fill. It is also important to consider how you will market your products to reach potential customers.

How to obtain a Tax ID in Mexico?

In order to obtain a Tax ID (RFC) in Mexico, you’ll need to register a company. This is mandatory, there is no way of applying for a Tax ID without proof of the existence of a legal entity. Some of the documents the SAT or ‘Sistema de Administración Tributaria’ requires are:

• Certified copy of the Articles of Incorporation
• Proof of having an office address
• Certified copy of the Power of Attorney for the Legal Representative
• The ID of the Legal Representative

How to Register a Company in Mexico?

1. Choose the right type of company or legal structure
2. Provide the desired company name to the Ministry of Foreign Relations
3. Prepare the Articles of Incorporation
4. Submit the required documentation to the SAT to obtain a Tax ID
5. Register the company in the Mexican Public Registry
6. Register the company with the Mexican Social Security Agency
7. Open a Corporate Bank Account

The post How to Start Selling in Amazon Mexico? appeared first on Easyco.

However, handling the payroll of a company in Mexico can be tough and require a lot of attention and work. This applies to both, small and big companies since they have different requirements, types of work, regimes, and regulations. Payroll Outsourcing Services offer you the solution and a more economical alternative to doing all the processes with your Human Resources team.

Why Outsource the Payroll of your Company in Mexico?

Payroll Outsourcing means working with a company that is going to take on some of the responsibilities of the Human Resources Department, such as recruitment, but also the management and payment of the payroll. This is an option many companies have in consideration since it takes off a big workload of their teams and gives it to a group of specialized people that are going to make sure to comply with all local regulations and stay up to date with the latest laws.

Payroll Outsourcing is perfect for small, medium, and big companies, since it provides all the solutions in one place and considerably reduces the costs, compared to having a group of people handling the payroll in-house.

Easyco Payroll Outsourcing Services in Mexico

At Easyco, our goal is to make your company in Mexico run as smoothly as possible. That’s why we’ve compiled a list of payroll services designed to cater to all your business needs. Keep in mind that if you need any additional service we can also help you, just send us a message with your requirements and we’ll get back to you as soon as possible!

• Complete calculation of paycheck

• Direct deposit to multiple accounts

• Payroll tax comprehensive service

• Locality processing

• Reporting of employee benefits

• Usage tracking and accrual – Vacation, Holiday, Sick, Personal Time, PTO

• Digital checks in PDF format

• Garnishment disbursements

• Reports in a standard format and client-developed reports

• Guidance for employee insurance

• Customer support via e-mail or Whatsapp

Is Payroll Outsourcing the best option for my company in Mexico?

Outsourcing the payroll of your company in Mexico is the best option for companies that are first starting operations, as well as companies that are already established and are looking to optimize their processes, relief their team of the payroll workload and reduce costs.

This is also perfect if you’re based in Mexico but are looking to expand your business to other countries in Latin America, or if you’re just getting started and in the process of registering your company in Mexico.

Get Assistance from Easyco Experts!

Mexico is a great country to start your business, being a country open to foreign investment with a favorable legal structure for companies. Our experts can help you register your company in Mexico and assist with the formalities and compliance along the process.

• Appointment of legal representation

• Providing a registered office address

• Handling tax and accounting

• Hassle-free Payroll Services

• Manage your Company bank account opening

• Manage your Trademark Registration

• Recruiting and Hiring Talent

• Corporate Legal Services

The post Why Outsource the Payroll of your Company in Mexico? appeared first on Easyco.

What are the causes of company dissolution in Mexico?

These are some of the reasons accepted by the LGSM (Ley General de Sociedades Mercantiles) to support the dissolution of the legal entity:

• Expiration of the social contract

• Inability to carry out the corporate purpose

• By agreement of the partners or shareholders

• Lack of shareholders

• Loss of two-thirds of the capital stock

• Dissolution by an official resolution

What are the steps to dissolve and liquidate a company in Mexico?

1. Hold an Extraordinary Assembly with the Directors of the company

   The objective of the Extraordinary Assembly is to elaborate on the minutes in which the Board of Directors agrees to dissolve the company. The minutes must be elaborated with the agreement and signatures of the corresponding parties and it also has to be notarized and registered at the Public Register of Commerce.

2. Appointment of the liquidators

   At the Extraordinary Assembly, it is also necessary to appoint the liquidators that are going to be in charge of the procedure. The liquidators of the company play a very important role in the dissolution process and have the following faculties:

   • Termination of all pending social operations

   • Collection of the company’s assets

   • Sell the company’s goods

   • Collect what is owed and pay what the company owes

   • Prepare the final financial balance of the company (step 5)

   • Register the cancellation of the social contract in the RFC (step 7)

   • Keep the liquidation books and company documentation for 10 years, after the dissolution.

3. Presentation of the Annual Declaration

   Within 3 months of the Dissolution Agreement, the Annual Declaration has to be presented, with the information about the financial statements, starting on January 1st until the day of the Dissolution Agreement.

4. Submission of the Dissolution Certificate to the SHCP

   Within a month of the presentation of the Annual Declaration, the Dissolution Certificate (RX) has to be submitted to the Secretaría de Hacienda y Crédito al Público (SHCP). This government office is in charge of the collection of taxes and their distribution.

5. Elaboration and submission of the final financial balance

   The Annual Declaration must be published on the online platform of the ‘Secretaría de Economía’. All the partners and shareholders can review it and file a claim (if applicable), within 15 days of it being published. The shareholder Assembly has to approve the balance.

6. Hold the Final Settlement Agreement Assembly

   At the Final Settlement Agreement Assembly, the liquidators will report on all the legal, fiscal, and civil actions that were taken, as well as the information regarding the reimbursement of the stock to the shareholders.

7. Submission of the Cancellation Agreement to the RFC

   Submit the Cancellation Agreement to the RFC or ‘Registro Federal de Contribuyentes’ the month after the dissolution of the company to terminate the company’s fiscal obligations.

Would you like to liquidate and dissolve your company in Mexico? At Easyco we can help you!

At Easyco, we make the dissolution and liquidation of your company in Mexico easier for you and your shareholders; our team of corporate experts has vast experience in Mexico, with a proven track record of success across all of our services.

Additionally, Easyco provides services to guarantee your company’s compliance, which includes:

• Complete process of Company Registration

• Appointment of legal representation,

• Providing a registered office address

• Handling tax and accounting

• Hassle-free Payroll Services

• Manage your Company bank account opening

• Manage your Trademark Registration

• Recruiting and Hiring Talent

• Corporate Legal Services.

The post How to Dissolve and Liquidate a Company in Mexico? appeared first on Easyco.

In the past few years, Mexico has had considerable growth and is now the second-largest economy in all of Latin America, only after Brazil. The Covid-19 pandemic had a very strong effect in most Latin American countries, but 2022 is the perfect year to start a business in Mexico.

In this article, we have compiled a list of the 4 most common types of companies in Mexico, as well as some benefits and general requirements for the formation.

How to register a company in Mexico? What are the most common types of companies in Mexico? What are their differences? Which one is the best for my business?

1. Limited Liability Company

   The Limited Liability Company or “Sociedad de Responsabilidad Limitada” (S. de R.L) is one of the most popular foreign companies. It works as a partnership for companies in the US that want to reduce their tax liabilities.

   The incorporation of a Limited Liability Company in Mexico requires at least two partners with a minimum capital of 3,000 Mexican pesos and a maximum of 50,000 Mexican pesos.

   The company’s shares must not be freely transferable or traded publicly. There is no requirement to appoint a statutory examiner.

2. Corporation or Stock Company

   Corporations and Stock Companies in Mexico are also very common. This is because the shareholder’s liability is limited to their capital contributions and, in contrast with the LLC, the stock is freely transferable. This type of company can have an unlimited number of shareholders and needs a minimum of 50,000 Mexican pesos or 2,700 US Dollars. It is the legal structure that has the biggest potential for growth and profit.

   Benefits of a Corporation in Mexico:

   • Limited Liability

   • Continuity of life

   • Centralized management

   • Stock ownership is freely transferable

   • Lower tax rate

3. Limited Partnership

   The “Sociedad en Comandita Simple” (SCS) is a type of partnership that has the advantages of an LLC.

   There are two types of partners in a Sociedad en Comandita Simple:

   • Active partners that have unlimited liability

   • Silent partners are only liable for their capital contribution

4. Mexican Branch

   With a Mexican Branch, any foreign company can start working in Mexico through branch offices. These types of companies will keep all their original liabilities and characteristics. To start operating in Mexico, they need to be approved by the National Commission of Foreign Investments and the Ministry of Foreign Relations. They also need to be registered at the Public Registry of Commerce.

Would you like to register a company in Mexico?

Easyco can help you start your business in Mexico

If you are looking to start a business in Mexico, our company experts can help you register your company in Mexico and assist with the formalities and compliance along the process.

At Easyco, we make company formation in Mexico easy; our team of corporate experts has vast experience helping companies and individuals register their business in Mexico, with a proven track record of success across all of our services. Easyco aims to tackle the complex company formation processes across LATAM. We make business registration easy by providing a hassle-free online company registration experience.

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