Hire employees in Mexico from France (Complete Guide)

Can a French company hire in Mexico?

More French companies are expanding into Mexico to support nearshoring, LATAM growth, and cost-efficient operations. Mexico offers a skilled workforce, competitive labor costs, and strong industrial, technology, and service sectors that align well with French multinational and mid-market companies.

However, hiring employees in Mexico from France is not simple. Mexican employment law is strict, highly protective of employees, and very different from French labor and payroll systems.

French companies must navigate:

• Complex Mexican labor laws and mandatory employee protections

• Payroll and tax obligations under SAT and IMSS regulations

• Serious legal risk from contractor misclassification or non-compliance
  
  

In this guide, we explain the three lawful ways French companies can hire employees in Mexico: opening a local entity, hiring independent contractors, or using a Mexican Employer of Record (EOR).

Key Hiring Options for French Companies in Mexico

French companies entering the Mexican market have three practical hiring models available. Each option varies in legal exposure, setup time, operational complexity, and long-term suitability.

Understanding how each model functions under Mexican law is essential. Choosing the wrong structure can result in fines, labor claims, or forced severance payments.

The three legal hiring paths are:

• Opening a local Mexican legal entity

• Hiring independent contractors

• Partnering with an Employer of Record (EOR) in Mexico
  
  

Each option is explained below with its legal, financial, and compliance implications for French employers.

Option 1: Open a Local Mexican Entity

Creating a legal entity in Mexico gives French companies full operational control, but it is the most complex and resource-intensive hiring method. This route requires a long-term commitment and strong local legal and accounting support.

• Extensive legal procedures:
  The company must register with SAT (Tax Authority), IMSS (Social Security), and INFONAVIT (Housing Fund), execute a notarial deed, open local bank accounts, and complete multiple government registrations before hiring begins.
  
  

• Ongoing accounting and HR obligations:
  Monthly digital tax filings, payroll submissions, and benefit reporting are mandatory. Mexican authorities closely monitor compliance, and errors often lead to audits or penalties.
  
  

• Heavy compliance burden:
  Employers must follow the Federal Labor Law, issue CFDI payroll receipts, and comply with all applicable NOM workplace regulations.
  
  

This option is best suited for large French corporations planning a permanent, high-volume presence. For SMEs or companies testing the market, the administrative cost and legal exposure usually outweigh the benefits.

Option 2: Hire Independent Contractors

Hiring independent contractors may seem flexible, but it carries significant legal risk in Mexico. Under Mexican labor law, many contractor relationships are automatically reclassified as employment.

• High legal exposure:
  If a contractor works exclusively for your company or follows your instructions, the law presumes an employment relationship. Misclassification can trigger back pay, unpaid benefits, IMSS contributions, and a mandatory 90-day severance penalty.
  
  

• Strict independence requirements:
  Contractors must have multiple clients, issue CFDI invoices, control their work methods, and manage their own taxes. Few meet all criteria in practice.
  
  

• Not suitable for ongoing roles:
  Contractors should only be used for short-term, project-based, non-subordinate work. Using them for core or long-term roles violates Mexican labor law.
  
  

For French companies, contractor hiring is rarely appropriate. Even signed contractor agreements offer little protection if subordination exists.

Option 3: Use an Employer of Record (EOR) in Mexico

An Employer of Record (EOR) allows French companies to hire employees in Mexico without opening a local entity. The EOR becomes the legal employer, while your company directs day-to-day work and performance.

• Full legal compliance:
  The EOR handles employment contracts, payroll, IMSS registration, CFDI issuance, tax withholding, and statutory benefits under Mexican law.
  
  

• Faster time-to-hire:
  Employees can be onboarded in days or weeks instead of months, avoiding incorporation delays.
  
  

• Lower operating costs:
  No entity setup, no local accounting retainers, and no internal HR infrastructure are required.
  
  

• Guaranteed employee protections:
  All statutory benefits, including IMSS, vacation pay, Aguinaldo, and profit sharing (PTU), are managed correctly and on time.
  
  

For most French companies, the safest and fastest approach is using a REPSE-registered Employer of Record such as Human Resources Mexico (HRM), we operate with a fully local Mexican team and a compliant employment structure.

Legal and Compliance Framework in Mexico

Hiring employees in Mexico requires compliance with multiple overlapping legal systems that strictly protect employees and enforce fiscal transparency.

French companies must comply with the following frameworks:

• Federal Labor Law (LFT):
  Governs contracts, wages, working hours, severance, vacation, Aguinaldo, and profit sharing (PTU). It defines who is considered the legal employer.
  
  

• Social Security Law (IMSS and INFONAVIT):
  All employees must be registered for healthcare, pensions, disability coverage, and housing benefits. Contributions are mandatory and employer-paid.
  
  

• CFDI Payroll Receipts:
  Salaries must be issued through digital CFDI payroll invoices reported directly to SAT, creating a permanent fiscal record.
  
  

• REPSE Registration:
  After the 2021 outsourcing reform, any company providing employment services must hold REPSE authorization. Non-REPSE providers operate illegally.
  
  

• One-Employer Rule:
  Co-employment is prohibited. Each employee must have one legally responsible employer.
  
  

A REPSE-certified EOR like Human Resources Mexico (HRM) ensures compliance across all these obligations for French companies hiring in Mexico.

Employment Contracts and Labor Standards

Mexican law requires all employment relationships to be documented in writing. Verbal agreements have no legal validity and expose employers to automatic liability.

• Written contracts: Mandatory for all employees, defining salary, duties, benefits, and work hours. Without a contract, disputes are presumed in favor of the employee.
  
  

• Contract types: Indefinite-term contracts are standard. Fixed-term contracts are allowed only for justified, temporary roles and must be clearly defined.
  
  

• Mandatory clauses: Contracts must include benefits, vacation, confidentiality, IP ownership, termination terms, and IMSS coverage.
  
  

• Language requirement: Contracts must be in Spanish to be legally enforceable. Bilingual contracts are recommended for French employers.
  
  

• Labor standards: Employers must respect non-discrimination rules, union rights, statutory benefits, and workplace safety regulations.
  
  

Human Resources Mexico (HRM) handles contract drafting, translation, and enforcement to ensure all agreements meet Mexican legal standards.

Mandatory Employee Benefits in Mexico

Mexican employees are entitled to mandatory benefits that cannot be waived or negotiated away.

• Aguinaldo (Christmas Bonus): Minimum of 15 days of salary paid before December 20 each year.
  
  

• Vacation and vacation premium: Minimum six paid vacation days after one year, increasing with tenure, plus a 25% vacation premium.
  
  

• Public holidays and paid leave: Statutory holidays, maternity, paternity, and medical leave covered through IMSS.
  
  

• Profit sharing (PTU): Employees receive 10% of the company’s taxable profits annually.
  
  

• Social security and healthcare: IMSS and INFONAVIT provide healthcare, pensions, disability, and housing access.
  
  

These benefits are strictly enforced. An EOR like HRM calculates, files, and pays all benefits accurately for French employers.

Termination Rules and Severance Obligations

Mexico does not allow at-will termination. Employee dismissals are heavily regulated and high-risk if mishandled.

• Termination with cause: Allowed only for specific reasons listed in the Federal Labor Law and must be documented and delivered in writing. Failure to prove cause results in unjustified dismissal.
  
  

• Termination without cause: Requires severance of 90 days’ salary, plus 20 days per year of service, accrued benefits, unused vacation, and proportional Aguinaldo.
  
  

• Notice and procedure: Written notice and mandatory conciliation apply. Errors can lead to reinstatement or additional penalties.
  
  

For French companies unfamiliar with these rules, termination risk is substantial. HRM manages severance calculations and legal procedures to prevent disputes.

Independent Contractor Risks (Important for French Firms)

Mexico applies a strict “subordination” test to distinguish employees from contractors.

• Subordination explained: If a contractor follows instructions, works exclusively, or uses company tools, they are legally an employee.
  
  

• Retroactive claims: Misclassified contractors can claim wages, benefits, PTU, severance, and IMSS contributions retroactively.
  
  

• True contractor requirements: Multiple clients, own tools, CFDI invoicing, and tax independence.
  
  

Due to these risks, French companies are strongly advised to avoid contractor hiring in Mexico and use a compliant EOR structure instead.

Costs, Salary Expectations, and Market Outlook

Mexico offers major cost advantages for French employers while maintaining high skill levels.

• Average salary ranges: IT professionals earn MXN 35,000–60,000 monthly, administrative roles MXN 18,000–30,000, and finance roles MXN 25,000–45,000 depending on experience.
  
  

• EOR cost structure: Typically a 15–25% markup covering payroll, taxes, benefits, and HR compliance.
  
  

• Market comparison: Total employment costs remain 60–70% lower than France, even after statutory benefits.
  
  

Human Resources Mexico (HRM) applies a transparent percentage model with no hidden fees, unlike many global SaaS EOR platforms.

Why Employer of Record (EOR) Is the Best Route for French Companies

For most French companies hiring in Mexico, using a REPSE-registered Employer of Record (EOR) is the most practical, legally sound, and scalable solution.

It allows companies to operate in Mexico without exposing themselves to the administrative and legal burdens of entity formation or the risks of misclassification.

• Full legal employer responsibility:
  A compliant EOR assumes 100% employer responsibility under Mexican law. This includes issuing employment contracts, registering employees with IMSS and INFONAVIT, calculating taxes, issuing CFDI payroll receipts, managing statutory benefits, and handling labor authority interactions. The French company is insulated from direct legal liability.
  
  

• No local entity required:
  French companies can hire in Mexico without forming a legal entity, opening local bank accounts, or maintaining in-house accounting and HR teams. This removes months of setup time and ongoing fixed costs.
  
  

• Faster market entry and flexibility:
  Hiring through an EOR allows companies to onboard employees in days rather than months. This flexibility is ideal for pilot teams, regional expansion, nearshoring operations, and project-based scaling without long-term structural commitments.
  
  

• Accurate benefits and severance management:
  Mexican benefits such as Aguinaldo, PTU, vacation premium, and severance are complex and strictly enforced. An experienced EOR calculates and administers these correctly, reducing the risk of disputes, penalties, or retroactive claims.
  
  

• Clear operational separation:
  While the EOR is the legal employer, the French company retains full control over day-to-day work, performance management, and business strategy. This structure complies fully with Mexico’s single-employer rule.
  
  

Human Resources Mexico (HRM), as a REPSE-certified EOR with a physical presence and local team, provides French companies with a legally sound employment structure that global platform-based EORs cannot replicate.

Common Mistakes French Companies Should Avoid

French companies entering the Mexican market often underestimate how different Mexican labor law is from European employment frameworks. These misunderstandings lead to costly compliance failures that can derail expansion plans.

• Treating employees as contractors:
  Many French companies attempt to replicate EU-style contractor models in Mexico. This fails under Mexican law, where subordination automatically creates an employment relationship. Misclassification can result in retroactive wage claims, IMSS debts, profit-sharing liability, and mandatory severance.
  
  

• Using non-REPSE global platforms:
  Many international EOR platforms operate in Mexico without proper REPSE authorization or rely on undisclosed third-party entities. These arrangements are illegal under Mexico’s outsourcing reform and expose clients to labor audits, fines, and invalid employment contracts.
  
  

• Improper payroll practices:
  Paying salaries in foreign currency, skipping CFDI payroll receipts, or using offshore payment methods violates SAT and IMSS reporting rules. These practices commonly trigger audits and tax penalties.
  
  

• Underestimating termination risk:
  Mexico’s termination laws are far more protective than those in France. Failing to follow correct procedures or miscalculating severance can lead to reinstatement orders, litigation, and additional financial exposure.
  
  

• Incomplete or non-Spanish documentation:
  Employment contracts must be legally enforceable in Spanish. Relying on English-only agreements weakens the employer’s legal position during disputes or inspections.
  
  

Human Resources Mexico (HRM) prevents these issues entirely by acting as the lawful employer, managing payroll, benefits, documentation, and compliance in accordance with Mexican law.

Conclusion

Hiring employees in Mexico from France is achievable with the correct legal structure. A REPSE-registered Employer of Record offers full compliance without the burden of opening a local entity.

Human Resources Mexico (HRM) delivers bilingual, transparent, and fully managed EOR services backed by real local expertise.

French companies can hire confidently, compliantly, and quickly in Mexico with HRM as their trusted partner.

FAQs

Can a French company hire employees in Mexico without opening a local entity?

Yes. A French company can legally hire employees in Mexico without forming a local entity by using a REPSE-registered Employer of Record (EOR). The EOR becomes the legal employer in Mexico, handling contracts, payroll, taxes, and social security, while the French company manages daily work and performance.

How long does it take for a French company to hire in Mexico through an EOR?

Hiring through an Employer of Record is fast. Most French companies can onboard employees in Mexico within 3 to 7 business days once documentation is complete. The EOR manages contracts, IMSS registration, and CFDI payroll setup, avoiding the months-long delays of entity formation.

Is it legal for French companies to hire independent contractors in Mexico?

In most cases, no. Mexican labor law applies a strict subordination test. If a contractor works exclusively for a French company or follows its instructions, the relationship is legally considered employment. Misclassification can result in retroactive benefits, IMSS debts, and mandatory severance payments.

What taxes and social security contributions apply when hiring in Mexico?

All Mexican employees must be registered with IMSS and INFONAVIT. The legal employer is responsible for income tax withholding, social security contributions, housing fund payments, and issuing CFDI payroll receipts. When using an EOR, these obligations are handled locally and compliantly on the French company’s behalf.

What benefits must French companies provide to employees in Mexico?

Mexican law mandates benefits including Aguinaldo, paid vacation with a vacation premium, public holidays, profit sharing (PTU), and full social security coverage. These benefits are non-negotiable and strictly enforced. An EOR like Human Resources Mexico ensures benefits are calculated and paid correctly.

Why is a REPSE-registered EOR important for French companies?

REPSE registration is mandatory for any company providing employment services in Mexico. Using a non-REPSE provider exposes French companies to illegal outsourcing risk, audits, and invalid employment contracts. Human Resources Mexico (HRM) holds valid REPSE registration and operates as a real local employer in Mexico.