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Mexico: Operating a Business

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Sociedad de Responsabilidad Limitada (S. de R.L.) is: a Variable Stock Limited Liability Partnership (company) Minimum of 3,000 MXN. Each partner must bring in at least 50% at the time of its creation.	Minimum 2 Maximum: 50 Liability is limited to the amount contributed.
Sociedad en Nombre Colectivo is: a General Partnership No minimum capital.	Minimum 2 Liability is unlimited and joint responsibility.
Sociedad Anonima (S.A.) is: Limited Liability Company (or Corporation) also known as Joint Stock Company in USA 50,000 MXN. 20% released at the time of its creation.	Minimum 2. No maximum. Liability is limited to the amount contributed.
Sociedad Anonima de Capital Variable (S.A. de C.V.) is: a Variable Capital Limited Liability Company. 50,000 MXN. 20% released at the time of its creation.	Minimum 2. No maximum. Liability is limited to the amount contributed.

Enterprises Federation: Mexican Employers' Information System
Confederation of the Mexican Republic Employers

Business Setup Procedures

Setting Up a Company	Mexico	Latin America & Caribbean
Procedures (number)	6.00	9.30
Time (days)	9.00	56.70

Source: Doing Business.

For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Mexico.
National Business Information Registry
The Competent Organization: The National Business Information Registry.

Recovery Procedures

Minimum Debt-to-Capital Ratio Triggering Liquidation: When losses are two thirds of the social capital.
Bankruptcy Laws: General Law of Commercial Companies
Reorganization and Rehabilitation Laws: Merging, transforming and splitting of the companies is regulated by the General Law of Commercial Companies

The Active Population in Figures

	2010
Labor Force	46,990,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	61.40%
Men activity rate	80.60%	-
Women activity rate	43.20%	-

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2007
Agriculture, cattle and fishing	2.6%
Extractive Industries	0.6%
Transformation Industries	28.5%
Construction Industries	9.7%
Electric Industry	1.2%
Trade	20.8%
Transportation and Communication	5.5%
Enterprises, Personal and Home Services	24.2%
Social and Community Services	6.8%

Source: National Institute of Statistics and Geography

For Further Statistics: Statistics Information from the Mexican Government

Working Conditions

Opening Hours
Legal Weekly Duration: 48 hours per week (8 hours per day)
Maximum Duration: Maximum of three extra hours daily on a maximum of three times per week.
Night Hours: From 10 PM to 6 AM

Working Rest Day: From 6 AM to 8 PM
Paid Annual Vacation: After one year of work, without interruption, the employee has the right to six working days of paid vacation, it increases from two to twelve days for each year worked after that.
Retirement Age: 65 years old
Child Labor and Minimum Age For Employment: Minors, aged between 14 and 16 years old cannot work more than six hours per day, they do not have the right to work extra hours or holidays.
Informal Labor Market: According to the International Work Organization, there are 25.5 millions of persons in Mexico who work in the informal market (about 50% of the active population).

The Cost of Labor

Pay

Minimum Wage: 52.50 MXN in the geographical area A, 50.96 MXN in the geographical B, 49.50 MXN in the geographical C. Consult the site of minimum wages for the geographical zones since the minimum wages per hour are modified every month.
Average Wage: Average monthly gross earnings in Mexico is MXN 5,660 (USD 430). For more information, consult National Minimum Salaries Commission
Other Forms of Pay
Pay For Overtime: Overtime is paid double per each extra hour worked. It cannot exceed more than 9 hours per week.
Pay For Rest Days Worked: The worker is entitled to an additional 25% of his daily salary.
Pay For Night Hours: According to the minimum salary assigned to the geographical area, established by the National Minimum Salary Commission.
Pay For Overtime at Night: The extra night hours are paid double.

Social Security Costs

The Areas Covered: Health Insurance: Medical assistance, maternity, disability, death, retirement.
Contributions: Contributions Paid By the Employer: 2 %.
Contributions Paid By the Employee: 10.5 %.
Competent Organization: Mexican Institute of Social Security
Institute of Security and Social Services for the State Workers
Ministry of Health

Management of Human Resources

Recruitment

Method of Recruitment: Enterprises use specialized methods of recruitment, but personal recommendations by word of mouth are also frequently used. However, applying for a job by Internet is becoming more and more popular.
Recruitment Agencies: Occ, Trovit, Bumeran.
Recruitment Websites: Mexican Job Offers
Infojobs Mexico
Monster Mexico
Empleo.gob.mx

The Contract

Type of Contract: Employment contracts can be for a specific job assignment or for a fixed period of time. If there is no stipulation, it is for an indefinite period of time.

Breach of Contracts

Retirement

Reasons to break a job contract:

- False information given by the employee or the syndicate, fake certificates or references.

- Get involved in violent acts, lack of honesty or maltreatment against supervisors.

- Produce material damages intentionally during working hours.

- Reveal confidential information of the enterprise.

- Working under the influence of alcohol or drugs.

Dismissals

An employee can break his job contract anytime, with a justified reason and without incurring responsibility. Justified reasons are:
- Deception on the part of the supervisor or the management group.
- Violence, lack of honesty, threatenings against the employee or his family.
- Reduction of the employee's salary.
- Evidence of an existing danger to the employee's safety or health.

Labor Laws

Work Legislation

Dispute Settlement

Conciliation Process

Cases of Dispute

Working conditions, unfair dismissal, sexual and moral harassment, verbal violence, physical violence.

Legal Framework

Labor conflicts are regulated by the Federal Labor Law and the article 123 of the Mexican Constitution.

Procedure

Once the three representatives of the sectors (a government representative, an employee and one of the managers) are reunited at the Board of Conciliation, the situation is negotiated in order to reach a settlement convenient for all parties. The board can try to conciliate, but if they do not want or if they do not reach an agreement, they will initiate a process of arbitration.

For more information, consult Art. 123 of the Mexican Constitution

Judicial Structures

Legal Framework: The Federal Labor Law gives the power to the Federal Board of Conciliation and the Board of Conciliation and Arbitration, to act as conciliatory instances for the workers and their managers.
Competent Legal Body: The Board of Conciliation and Arbitrage and The Federal Board of Conciliation depend of the Ministry of Labor and Social Security.

Social Partners

Social Dialogue and Involvement of Social Partners: Mexican syndicates (or unions) are divided and organized by activity sectors and they have a relative power. Most of them are affiliated to The Confederation of Mexican Workers (CTM). It must be considered that the syndicates have been developed as institutions of 'social resistance' which prevent, in many cases, structural reforms as well as the economic development of the country.
Unionization Rate: 30 %.
Unions: Mexican Syndicates
Confederation of Mexican Workers
Regulation Bodies: Ministry of Labor and Social Security
Confederación Patronal de la República Mexicana (COPARMEX)

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