October 8, 2025 • 20 mins
Moving Abroad Resources:
👉 Moving Abroad Relocation Roadmap Guidebook that walks you through the five phases of moving abroad ($27): https://www.entrepreneurexpat.com/relocate
👉 Moving Abroad Relocation Blueprint Course which offers step by step guidance on everything from choosing the right country to immigration to taxes and everything in between: https://www.entrepreneurexpat.com/blueprint
👉 Want us to handle the details of your move abroad? Apply for our white-glove relocation services here: https://www.entrepreneurexpat.com/consult
👉 Free Moving to Mexico Guide: https://www.entrepreneurexpat.com/mexico
👉 Free Moving Abroad Checklist: https://www.entrepreneurexpat.com/abroad
Remote Work and Online Income Resources:
👉 Expat Income Accelerator course which shows you the multiple ways you can make money globally based on our 15+ years of experience in online business, investing internationally and living in multiple countries: https://www.entrepreneurexpat.com/income
👉 Get Your First High Paying Client Online Bootcamp which walks you through the first four foundational steps of creating and monetizing an online business based on 15+ years of experience in online business: https://www.entrepreneurexpat.com/firstclient-yt
👉 YouTube Mastery Workshop which shows you how we’ve built two YouTube channels that bring clients and passive income from digital course sales (including turning Entrepreneur Expat into a six-figure business in six months): https://www.YouTubeMasteryWorkshop.com
👉LinkedIn Mastery Workshop which shows you how to use LinkedIn to find remote work, clients and connect with recruiters based on Justin’s experience building a six-figure business and finding remote work on LinkedIn: https://www.entrepreneurexpat.com/linkedin
👉 Free Make Money From Anywhere Guide: https://www.entrepreneurexpat.com/money-guide
V I D E O S T O W A T C H N E X T :
Online Business Tips to Working and Traveling In Mexico: https://www.youtube.com/watch?v=9zGH0voCyOc&list=PLh3xKhkMgH_IA6s3KvB_g9Cc9Ze1eji8j&index=2
Moving to Mexico: 10 Reasons Why We Chose to Live in Guadalajara https://www.youtube.com/watch?v=dK23vD8_xjc&list=PLh3xKhkMgH_LAY7UV78YMgms-f2e1UcwN&index=23
Tips for Moving Overseas: Top 5 Remote Work Skills That Make Money: https://www.youtube.com/watch?v=bFzjCrlNAL8&list=PLh3xKhkMgH_IA6s3KvB_g9Cc9Ze1eji8j
--------------------------------------------
Inquiries: community@entrepreneurexpat.com
--------------------------------------------
#livinginmexico #movingtomexico #digitalnomad #makemoneyonline #expatsinmexico #digitalmarketingtraning #geoarbitrage #moveoverseasfromus #digitalmarketingcourse #guadalajara #costoflivingmexico #digitalnomadvisa #digitalnomadnews #workandtravel #locationindependentl
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Justin Keltner (00:36):
Trump's$100,000 fee for H one B Visa Applicants
has now gone into effect and ifyou're a US business owner
that's looking to hire talentand track talent from different
countries, this visa fee is agame changer, but not in a good
way.
(00:56):
In this video, we're gonna talkabout exactly what this H one B
fee is, how it works, and whyit's going to change the
landscape of both business andemployment in the us.
And we're in for a littlerollercoaster here.
This is not going to be whatpeople think.
Hi, I'm Justin Keltner and onthis channel Entrepreneur,
(01:17):
expat, we talk about everythingto do with global business,
global diversification andbuilding the life, the business,
and the lifestyle of your dreamsin a different country.
If that's something that you'reinterested in, if you're looking
for global investment tips, ifyou're looking for opportunities
abroad, if you're looking atgetting.
A second residency or even asecond passport, you're
(01:39):
definitely gonna wanna hit thatsubscribe button and that
notification bell.
We're coming out with multiplevideos a week, talking about all
of those different things.
And if you're a business ownerin the US and you're like.
There's some crazy stuffhappening right now, and I wanna
start to maybe build my Plan Bor even potentially relocate my
business overseas, and you'vegot a million dollars or more in
(02:00):
net assets, then you definitelywant to book a call with our
team so that we can talk aboutthose things.
One-on-one and give youpersonalized attention.
You can book thatcall@entrepreneurexpat.com slash
consult.
Or if not, you can also checkout all the free resources below
this video.
So what we're gonna dive intotoday specifically, is how this
(02:22):
H one B fee impacts businessesin the us, how it impacts.
The talent pool and specificallywhat some alternative options
are.
A lot of people now that this ispassed are saying.
You know what?
It's way too expensive for us topay this fee.
It just doesn't make any sensefinancially.
And then on top of that, they'renot able to find the talent that
(02:42):
they're looking for in the US orperhaps it's not competitive, or
perhaps there's so muchregulation and other red tape
around hiring people in theUnited States or even.
In Canada or elsewhere, right?
That we're dealing with this allover, especially the west.
So what are some alternativeoptions?
So we're also gonna talk abouthow to legally and effectively
(03:03):
hire talent in differentcountries, specifically in
Mexico, so that you can eitherwork with Mexicos here that are
already in Mexico, or perhapseven bring in talent from other
countries to live and work inMexico.
Like a ton of businesses in theUS and all.
Over the world have done.
So what has changed?
What is this new fee that's beenintroduced as of September of
(03:27):
2025?
On September 19th, 2025, Trumpsigned a proclamation that new H
one B petitions filed afterSeptember 21st must include a
hundred thousand dollars paymentby the sponsoring employer.
As a clarification, this is aone-time fee for new petitions.
It's not an annual fee, but thisis still a really big chunk of
change to any employer,especially those that are hiring
(03:49):
multiple people Under this H oneB Visa program, it applies to
petitions for workers that areoutside of the us.
Entering the US under that H oneB program, there are some
exemptions or gray areas.
This includes renewals, thisincludes existing H one B
holders, national interests andthings like that.
There's, there's several thingsthat are under dispute, but what
(04:10):
this really does is it makestrying to bring new foreign
talent into the US through H oneB uncertainly.
It makes trying to bring newtalent into the US through this
H one B program.
Extremely expensive and alsolegally uncertain.
And obviously the goal of thisprogram was to try to get us
(04:30):
employers to hire talentlocally, but in a lot of cases
that's just not viable.
And here's why.
This is actually pushingcompanies to hire remotely
instead.
What it seems like is happeningincreasingly more is that
companies are outsourcinginstead of bringing people to
(04:51):
the us.
In fact, this has been a trendfor many, many years.
You see call centers beingoutsourced, obviously to India.
You call Delta or or Chase orwhoever.
You get a Bangladeshi or Indianor, or a Filipino person.
On the other line, uh, perhapseven for developer talent,
there's a lot of businesses thathave entire teams in places like
India and places like Pakistan.
Instead of bringing thosepeople.
(05:11):
And this bill is now going topush talent, in other countries
to just work in those othercountries and from those other
countries and push businesses tooutsource all of those different
things.
So they're bringing the USoperations to them.
That's sort of the next bestoption.
They're creating this remote andthis distributed.
Workforce.
Of course, remote work avoidsthe visa issue completely if
(05:32):
those workers are residing outof the US now, of course.
And this is what we're gonnacover here in this video.
Remote does not mean no rules.
You must comply with local labortax employment laws where the
worker lives.
We're not giving you any legalor professional advice here.
This is just our opinion.
Always consult your payroll,your accounting, your legal
professionals if you havespecific questions.
(05:54):
And of course, if you want tohelp create a customized plan
for relocating yourself, yourfamily, and your business to
Mexico or elsewhere.
So that you can get out of allthe craziness and all the red
tape and all the politicalinstability in the US or if you
just want to dive in on thebusiness topics specifically and
get our advice and our team'sadvice.
Don't forget to book thatconsult right
here@entrepreneurexpat.com slashconsult.
(06:16):
Now, from Mexico specificallywhere we help a lot of people
start and grow companies, thereare obviously additional
constraints, additionalprotections under the
teleworking Labor laws, so hereare some of the legal models and
best practices.
The first one is that you hirepeople as independent
contractors or freelancers.
Of course, the pros to this isthat the overhead is relatively
(06:38):
low and that things are veryflexible risks.
Of course, just like in the USwith the IRS, you don't want to
have somebody that's actually afull-time employee in Mexico and
treat them like a contractor,right?
You can.
You can risk misclassificationand then.
Be charged a lot in the samefees you would've paid before,
plus more fees and other finesOn top of that like penalties
(07:00):
that those local authoritieswill impose if they end up
reclassifying those people asemployees.
You must use clear contracts,you've gotta have clear
contracts, local compliance,withholding and proof of
employer status.
Those are things that areimportant whenever you're hiring
somebody in Mexico.
If you are setting up anemployee model via a local
(07:21):
entity.
That's one of the things that'svery common.
Now, you can actually set up aMexican subsidiary or a branch.
You can register with Mexicantax and labor authorities, and
then you employ people directlyunder Mexican law.
So you're covering things likesocial security benefits,
severance, et cetera.
And of course, you're alsocomplying with.
Telework laws here in Mexico,like the remote workspace needs
(07:43):
to be documented and employermust cover certain expenses.
This is typically better forlarger organizations that have
those sorts of HR resources toreally cover all the different
angles because if not, it getsreally tricky.
You really do have to haveproper operations here in
Mexico.
You gotta make sure all your T'sare dotted, all of your i's are.
Your T's are crossed.
(08:03):
Your i's are dotted.
See?
See, that's exactly the kind ofproblem you get into if you're
not paying attention to thedetails.
Now another alternative if youdo want to classify them as
full-time employees, if they'reactually providing employee like
services, but maybe you don'twant to go through all the red
tape of setting up your ownorganization or subsidiary in
Mexico, is that you can have.
(08:24):
An employee of record, an EOR,or a professional employer
organization, or PEO, that EORlegally hires the worker in
Mexico on your behalf.
They handle things like payroll.
They handle the benefits, theyhandle compliance and taxes, but
you still retain operationalcontrol.
You define the work and youmanage the performance of those.
(08:46):
Employees, and this tends to bethe fastest, lowest risk route
for US companies expandingabroad.
Unless you're just usingcontractors and maybe you've got
a few hours here, a few hoursthere, and you're not, you know,
wanting to control like hoursthat they work and things like
that.
But in a lot of cases you dowant to be very careful, like I
mentioned before, not tomisclassify contractors, uh,
(09:06):
misclassify employees ascontractors.
Then an a further option is youcan also have a hybrid or local
contractor plus employment mix,so you can have contractors for
freelance tasks and then convertthem to full-time employees if
you are looking to work withthem full-time on a long-term
basis.
And you want to factor in thingslike work permits or immigration
(09:29):
for foreign nationals in Mexico.
Now, the cool thing is here inMexico, all you need to do is
set up that business, have theproper legal structure, and you
could start issuing visas forforeigners.
Let's say, uh, one, one example.
Actually, we see a lot, and thisis one of the reasons there's
such great Indian food where welive in Guadalajara or, or close
by now, we're, we're about anhour from Guadalajara.
There's Indian restaurantspopping up.
(09:50):
Everywhere.
And they have quite good food, Imust say.
And the reason is becausethere's a ton of people from
India now coming here to Mexicoto work.
It's almost like TechNearshoring.
Instead of these US and otherinternational companies bringing
people into their countries,where's there's a high cost of
living, they're paying highersalaries, and now on top of it
all, they've gotta pay this damna hundred thousand dollars H one
(10:12):
B Visa plan.
They bring people to a lowercost.
Country, just like Mexico, andthey issue their visas there.
There's a lot less red tape.
You can have an employee up andrunning potentially in 30 to 60
days instead of the months oryears that it takes to hire
people and sponsor them on thatH one B Visa program.
And you're not paying hundredsof thousands of dollars.
(10:33):
You're paying hundreds orthousands of dollars.
It's, it's a factor of 10 orless, right?
It's nothing like the red tapethat you'll face.
In the us.
So of course, if they want towork here from Mexico for your
company, they need that properauthorization that that
temporary residence and thatwork authorization.
But you can very easily issuethose work authorizations from
(10:54):
your company, get them approvedthrough immigration.
They'll get that one yeartemporary resident visa that is
renewable.
And the great benefit foremployees that wanna live here
long term is that unlike someother countries like perhaps
Columbia, where you might notget a direct path to citizenship
or even permanent residence, ifthey have that renewable one
year temporary residence here inMexico and they renew it and
(11:15):
they're working, let's say foryear company for a total of
about four years, they now canapply for permanent residence in
Mexico.
And you don't have to doanything else special for that.
That's a great benefit becausenow somebody from India or
somebody from another part ofthe world can come down here and
live in Mexico, bring theirfamily to Mexico, potentially
have a better quality of lifethan maybe they did back home in
(11:35):
India, and their entire familycan have a path.
To permanent residents andeventually Mexican citizenship
if they so choose versus the USwhere it's much, much more
complicated to do that, as youknow, and if the remote hires
are actually Mexican nationals,so if you're setting up shop
here, you're hiring Mexicannationals, this is much less of
a concern because they'vealready got that work
(11:58):
authorization being Mexicannational.
So you can use a combinationboth of Mexican employees.
And also people from othercountries that now come and work
and live here for your company.
Now we're gonna talk about somekey compliance and practical
considerations to doing this.
So number one is you've gotwhat's called a permanent
(12:19):
establishment risk.
So if you do have employees inMexico, then local tax
authorities might argue that youhave a permanent establishment,
which does trigger corporate taxobligations.
Another thing you've gotta bearin mind is labor protections and
benefits.
So the Mexican labor law is veryprotective of employees.
It's a little bit more focusedon employee protections than it
(12:41):
is in employer protections.
You need to make sure thatyou're always providing those
mandatory benefits, includingvacation, sometimes profit
sharing, social security, and somuch more for that, that
employee model.
And then telework laws in Mexicooblige you.
As an employer to supply certainequipment covering part of their
internet and maybe even theirelectricity if they're working
(13:01):
from home.
Make sure that you're inspectingthe workspace, making sure that
it's a good workspace to workfrom, that there are safety
standards in place and thingslike that.
This is why it's reallyimportant that you work with
professionals.
We do things like this all thetime, so if you haven't already
booked your concept below andyou are a business owner.
Or you're looking to start abusiness in Mexico, make sure
that you book thatconsult@entrepreneurexpat.com
(13:23):
slash consult and we can analyzeyour unique situation and help
you make sure that you'recompliant with all of these
different things and that you'realso optimizing your tax
situation across.
Different countries.
In addition to what I mentionedabout the telework space, you've
gotta make sure that you'reprocessing payroll here
properly.
You are looking at things likewithholding requirements just
like you would be in the us.
(13:44):
Contrary to popular belief, thisis not just some wild, wild west
free for all country where youcan do whatever you want.
There's, there's laws, there'ssystems that you need to make
sure that you're compliant with.
And if you're hiring people asemployees.
Then you're gonna have to have,as a corporation, a Mexican tax
ID or RFC.
And what you do when you formthat corporation is you
essentially become a personamorale under Mexican law.
(14:07):
So you have, uh, a, a corporateregistration that RFC, and
you're gonna have to withholdincome tax, social security, and
other contributions.
Now, if they're contractors,contractors must invoice you
under Mexican tax rules.
Typically they're going toregister as a persona, which
essentially means that they areindependent contractors.
(14:29):
There're there are individuals.
They don't have a registeredcorporate entity, but they are
contractors under Mexican lawand they're gonna be invoicing
you.
They're typically gonna besending you things like uras.
So there's a system, unlike theUS, where you just have a
receipt if you wanna writesomething off.
Here you have those proper CFDIinvoices or uras that are
interconnected.
So you send an invoice and thenthe tax authority sees that
(14:51):
invoice and then a companyreceives that invoice.
So there's actually, uh, it'salmost like a double ledger
accounting system whereeverything is balanced out so
that they keeps track of all ofthat tax activity within the
country for proper enforcement.
You also want to be aware.
Of the contracts and of thelocal laws, and use contracts
that conform to Mexican laborlaw.
(15:12):
Obviously you're not doingcontracts in English here.
Under the US law, you're doinglabor contracts, NDAs, and in
some cases intellectual propertyassignments.
Under Mexican law, you're gonnahave to be careful with
termination clauses andseverance rights because a lot
of those laws are very differentlike we mentioned before, than
they are from somewhere like theUS and factor in as well
cultural and operationalfactors.
(15:33):
So there's different.
Sorts of holidays.
For instance, in Mexico, there'sdifferent expectations in terms
of the hours that somebody wouldwork and overtime and things
like that.
And of course, if you are in adifferent time zone, make sure
that those things are aligned.
Uh, you're gonna wanna reviewcommunication norms because even
though there is a very similarculture here in a lot of ways to
the us, you're hiring peoplefrom a d.
(15:54):
Country, a different culture, adifferent background.
You wanna make sure that you'refollowing those communication
and cultural norms andexpectations.
And of course, you gotta betapped into the local labor
market dynamics.
So what are current wages?
Uh, how are you compensatingpeople?
What sorts of incentivestructures and things like that
are you offering to becompetitive with other employees
(16:14):
here?
And then if you are exiting thatbusiness or exiting Mexico and
that, that component of your, ofyour business.
How do you do that?
How do you scale down?
How do you plan as you scale orexit without any legal
surprises?
Now we're gonna dive into somereal world paths as well as case
studies.
From different types ofbusinesses and how they might go
about doing this.
(16:35):
So one example is a US SaaSfounder hires developers in
Guadalajara.
We see this all the time.
They're hiring Mexicans forsoftware engineering, for
DevOps, for infrastructuremanagement.
Whether they have moreoperations in, in a place like
Mexico that they're op operatinginfrastructure in, or they're
just trying to get benefits fromthat nearshoring and from
outsourcing of those positions.
(16:56):
So they hire that employee inGuadalajara through an EOR, that
employer of record, and thenthey scale the team without a US
entity, another example would bea US FinTech that will use a
mix, so maybe they usecontractors for design work here
in Mexico.
They use employees for coreengineering talent, converting
those people to full-timeemployees when needed so that
(17:17):
they can get that nice balanceof cost savings and also
compliance.
And of course, us salaries aresignificantly higher than
Mexican salaries.
You might be able to find talenthere for two to$3,000 per month
or even less, where that sametalent might cost$10,000 per
month or more in the us.
Plus you're dealing with that ahundred thousand dollars.
(17:40):
H one B visa cost now.
So it just kind of becomes a nobrainer if, if you're a mid to
large company, you are lookingat how to do this in Mexico and
how to do this in othercountries.
Because even when you factor inall of the local benefits that
you're paying that might beslightly higher as a percentage
than in the US and your employerof record fee and things like
that, you're still saving a tonof money.
(18:01):
And if you can deal with alittle bit of red tape, if you
can deal with navigating some ofthose cultural, uh, things and,
and setting the.
Systems upright to begin with interms of communication and time
zones and all that.
There are huge, huge benefits tohiring talent in Mexico, or even
bringing talent in from allsorts of other places in the
world to live and work fromsomewhere like Mexico.
(18:22):
They're in the, the similar timezone.
They're not working from Indiawhere you've got like a nine to
12 hour gap or somewhere in theMiddle East or in Pakistan.
Right.
They're, they're in a verysimilar time zone.
There's overlap directly betweenUS Pacific, all the way to US
central time, so there's a tonof benefits.
To be had from doing this sothat a hundred KH one B visa, so
(18:43):
that a hundred KH one B Visa isreally tipping the scales now
for a lot of US-based employersand they're making traditional
visa routes to bring talent intothe US so, so expensive.
But Mexico is now in a uniqueposition because a lot of
Mexicans are gonna be hired nowby US companies, and it's a more
viable and scalable strategy inthe long run.
(19:03):
If you want help structuringyour cross-border hiring or want
our plug and play partners herein Mexico, that can help you get
all of this established ifyou're a medium to large
business or even if you're just.
Starting and you're, you'relooking at, hey, how do we get
some contractors?
How do we get some employees inMexico to be able to do all of
this without us having to tap into workers from around the world
(19:26):
coming to the US and having tosponsor them and everything
else?
Then you definitely wanna bookthat call@entrepreneurexpat.com
slash consult, book that consultwith our team.
Now, if that isn't you, andmaybe you're just watching this
to inform yourself about what'sgoing on with H one B or the
laws or anything else, feel freeto check out our free resources
and courses in the description.
Of this video and make sure youhit that subscribe button, hit
(19:48):
that notification bell so thatyou don't miss any more content
on this topic.
We love that you are the bestpart of this community, the best
part of this channel.
We really thank you for watchingus all the time and give this
video a like as well, give thisvideo a thumbs up.
It helps us a ton with our goalof reaching a million
entrepreneur expats, andaspiring expats.
I'm Justin Keltner.
(20:08):
Thanks so much again for yourtime, and we look forward to
seeing you again very soon.
Bye for now.
Trump's$100,000 fee for H one B Visa Applicants
has now gone into effect and ifyou're a US business owner
that's looking to hire talentand track talent from different
countries, this visa fee is agame changer, but not in a good
way.
(00:56):
In this video, we're gonna talkabout exactly what this H one B
fee is, how it works, and whyit's going to change the
landscape of both business andemployment in the us.
And we're in for a littlerollercoaster here.
This is not going to be whatpeople think.
Hi, I'm Justin Keltner and onthis channel Entrepreneur,
(01:17):
expat, we talk about everythingto do with global business,
global diversification andbuilding the life, the business,
and the lifestyle of your dreamsin a different country.
If that's something that you'reinterested in, if you're looking
for global investment tips, ifyou're looking for opportunities
abroad, if you're looking atgetting.
A second residency or even asecond passport, you're
(01:39):
definitely gonna wanna hit thatsubscribe button and that
notification bell.
We're coming out with multiplevideos a week, talking about all
of those different things.
And if you're a business ownerin the US and you're like.
There's some crazy stuffhappening right now, and I wanna
start to maybe build my Plan Bor even potentially relocate my
business overseas, and you'vegot a million dollars or more in
(02:00):
net assets, then you definitelywant to book a call with our
team so that we can talk aboutthose things.
One-on-one and give youpersonalized attention.
You can book thatcall@entrepreneurexpat.com slash
consult.
Or if not, you can also checkout all the free resources below
this video.
So what we're gonna dive intotoday specifically, is how this
(02:22):
H one B fee impacts businessesin the us, how it impacts.
The talent pool and specificallywhat some alternative options
are.
A lot of people now that this ispassed are saying.
You know what?
It's way too expensive for us topay this fee.
It just doesn't make any sensefinancially.
And then on top of that, they'renot able to find the talent that
(02:42):
they're looking for in the US orperhaps it's not competitive, or
perhaps there's so muchregulation and other red tape
around hiring people in theUnited States or even.
In Canada or elsewhere, right?
That we're dealing with this allover, especially the west.
So what are some alternativeoptions?
So we're also gonna talk abouthow to legally and effectively
(03:03):
hire talent in differentcountries, specifically in
Mexico, so that you can eitherwork with Mexicos here that are
already in Mexico, or perhapseven bring in talent from other
countries to live and work inMexico.
Like a ton of businesses in theUS and all.
Over the world have done.
So what has changed?
What is this new fee that's beenintroduced as of September of
(03:27):
2025?
On September 19th, 2025, Trumpsigned a proclamation that new H
one B petitions filed afterSeptember 21st must include a
hundred thousand dollars paymentby the sponsoring employer.
As a clarification, this is aone-time fee for new petitions.
It's not an annual fee, but thisis still a really big chunk of
change to any employer,especially those that are hiring
(03:49):
multiple people Under this H oneB Visa program, it applies to
petitions for workers that areoutside of the us.
Entering the US under that H oneB program, there are some
exemptions or gray areas.
This includes renewals, thisincludes existing H one B
holders, national interests andthings like that.
There's, there's several thingsthat are under dispute, but what
(04:10):
this really does is it makestrying to bring new foreign
talent into the US through H oneB uncertainly.
It makes trying to bring newtalent into the US through this
H one B program.
Extremely expensive and alsolegally uncertain.
And obviously the goal of thisprogram was to try to get us
(04:30):
employers to hire talentlocally, but in a lot of cases
that's just not viable.
And here's why.
This is actually pushingcompanies to hire remotely
instead.
What it seems like is happeningincreasingly more is that
companies are outsourcinginstead of bringing people to
(04:51):
the us.
In fact, this has been a trendfor many, many years.
You see call centers beingoutsourced, obviously to India.
You call Delta or or Chase orwhoever.
You get a Bangladeshi or Indianor, or a Filipino person.
On the other line, uh, perhapseven for developer talent,
there's a lot of businesses thathave entire teams in places like
India and places like Pakistan.
Instead of bringing thosepeople.
(05:11):
And this bill is now going topush talent, in other countries
to just work in those othercountries and from those other
countries and push businesses tooutsource all of those different
things.
So they're bringing the USoperations to them.
That's sort of the next bestoption.
They're creating this remote andthis distributed.
Workforce.
Of course, remote work avoidsthe visa issue completely if
(05:32):
those workers are residing outof the US now, of course.
And this is what we're gonnacover here in this video.
Remote does not mean no rules.
You must comply with local labortax employment laws where the
worker lives.
We're not giving you any legalor professional advice here.
This is just our opinion.
Always consult your payroll,your accounting, your legal
professionals if you havespecific questions.
(05:54):
And of course, if you want tohelp create a customized plan
for relocating yourself, yourfamily, and your business to
Mexico or elsewhere.
So that you can get out of allthe craziness and all the red
tape and all the politicalinstability in the US or if you
just want to dive in on thebusiness topics specifically and
get our advice and our team'sadvice.
Don't forget to book thatconsult right
here@entrepreneurexpat.com slashconsult.
(06:16):
Now, from Mexico specificallywhere we help a lot of people
start and grow companies, thereare obviously additional
constraints, additionalprotections under the
teleworking Labor laws, so hereare some of the legal models and
best practices.
The first one is that you hirepeople as independent
contractors or freelancers.
Of course, the pros to this isthat the overhead is relatively
(06:38):
low and that things are veryflexible risks.
Of course, just like in the USwith the IRS, you don't want to
have somebody that's actually afull-time employee in Mexico and
treat them like a contractor,right?
You can.
You can risk misclassificationand then.
Be charged a lot in the samefees you would've paid before,
plus more fees and other finesOn top of that like penalties
(07:00):
that those local authoritieswill impose if they end up
reclassifying those people asemployees.
You must use clear contracts,you've gotta have clear
contracts, local compliance,withholding and proof of
employer status.
Those are things that areimportant whenever you're hiring
somebody in Mexico.
If you are setting up anemployee model via a local
(07:21):
entity.
That's one of the things that'svery common.
Now, you can actually set up aMexican subsidiary or a branch.
You can register with Mexicantax and labor authorities, and
then you employ people directlyunder Mexican law.
So you're covering things likesocial security benefits,
severance, et cetera.
And of course, you're alsocomplying with.
Telework laws here in Mexico,like the remote workspace needs
(07:43):
to be documented and employermust cover certain expenses.
This is typically better forlarger organizations that have
those sorts of HR resources toreally cover all the different
angles because if not, it getsreally tricky.
You really do have to haveproper operations here in
Mexico.
You gotta make sure all your T'sare dotted, all of your i's are.
Your T's are crossed.
(08:03):
Your i's are dotted.
See?
See, that's exactly the kind ofproblem you get into if you're
not paying attention to thedetails.
Now another alternative if youdo want to classify them as
full-time employees, if they'reactually providing employee like
services, but maybe you don'twant to go through all the red
tape of setting up your ownorganization or subsidiary in
Mexico, is that you can have.
(08:24):
An employee of record, an EOR,or a professional employer
organization, or PEO, that EORlegally hires the worker in
Mexico on your behalf.
They handle things like payroll.
They handle the benefits, theyhandle compliance and taxes, but
you still retain operationalcontrol.
You define the work and youmanage the performance of those.
(08:46):
Employees, and this tends to bethe fastest, lowest risk route
for US companies expandingabroad.
Unless you're just usingcontractors and maybe you've got
a few hours here, a few hoursthere, and you're not, you know,
wanting to control like hoursthat they work and things like
that.
But in a lot of cases you dowant to be very careful, like I
mentioned before, not tomisclassify contractors, uh,
(09:06):
misclassify employees ascontractors.
Then an a further option is youcan also have a hybrid or local
contractor plus employment mix,so you can have contractors for
freelance tasks and then convertthem to full-time employees if
you are looking to work withthem full-time on a long-term
basis.
And you want to factor in thingslike work permits or immigration
(09:29):
for foreign nationals in Mexico.
Now, the cool thing is here inMexico, all you need to do is
set up that business, have theproper legal structure, and you
could start issuing visas forforeigners.
Let's say, uh, one, one example.
Actually, we see a lot, and thisis one of the reasons there's
such great Indian food where welive in Guadalajara or, or close
by now, we're, we're about anhour from Guadalajara.
There's Indian restaurantspopping up.
(09:50):
Everywhere.
And they have quite good food, Imust say.
And the reason is becausethere's a ton of people from
India now coming here to Mexicoto work.
It's almost like TechNearshoring.
Instead of these US and otherinternational companies bringing
people into their countries,where's there's a high cost of
living, they're paying highersalaries, and now on top of it
all, they've gotta pay this damna hundred thousand dollars H one
(10:12):
B Visa plan.
They bring people to a lowercost.
Country, just like Mexico, andthey issue their visas there.
There's a lot less red tape.
You can have an employee up andrunning potentially in 30 to 60
days instead of the months oryears that it takes to hire
people and sponsor them on thatH one B Visa program.
And you're not paying hundredsof thousands of dollars.
(10:33):
You're paying hundreds orthousands of dollars.
It's, it's a factor of 10 orless, right?
It's nothing like the red tapethat you'll face.
In the us.
So of course, if they want towork here from Mexico for your
company, they need that properauthorization that that
temporary residence and thatwork authorization.
But you can very easily issuethose work authorizations from
(10:54):
your company, get them approvedthrough immigration.
They'll get that one yeartemporary resident visa that is
renewable.
And the great benefit foremployees that wanna live here
long term is that unlike someother countries like perhaps
Columbia, where you might notget a direct path to citizenship
or even permanent residence, ifthey have that renewable one
year temporary residence here inMexico and they renew it and
(11:15):
they're working, let's say foryear company for a total of
about four years, they now canapply for permanent residence in
Mexico.
And you don't have to doanything else special for that.
That's a great benefit becausenow somebody from India or
somebody from another part ofthe world can come down here and
live in Mexico, bring theirfamily to Mexico, potentially
have a better quality of lifethan maybe they did back home in
(11:35):
India, and their entire familycan have a path.
To permanent residents andeventually Mexican citizenship
if they so choose versus the USwhere it's much, much more
complicated to do that, as youknow, and if the remote hires
are actually Mexican nationals,so if you're setting up shop
here, you're hiring Mexicannationals, this is much less of
a concern because they'vealready got that work
(11:58):
authorization being Mexicannational.
So you can use a combinationboth of Mexican employees.
And also people from othercountries that now come and work
and live here for your company.
Now we're gonna talk about somekey compliance and practical
considerations to doing this.
So number one is you've gotwhat's called a permanent
(12:19):
establishment risk.
So if you do have employees inMexico, then local tax
authorities might argue that youhave a permanent establishment,
which does trigger corporate taxobligations.
Another thing you've gotta bearin mind is labor protections and
benefits.
So the Mexican labor law is veryprotective of employees.
It's a little bit more focusedon employee protections than it
(12:41):
is in employer protections.
You need to make sure thatyou're always providing those
mandatory benefits, includingvacation, sometimes profit
sharing, social security, and somuch more for that, that
employee model.
And then telework laws in Mexicooblige you.
As an employer to supply certainequipment covering part of their
internet and maybe even theirelectricity if they're working
(13:01):
from home.
Make sure that you're inspectingthe workspace, making sure that
it's a good workspace to workfrom, that there are safety
standards in place and thingslike that.
This is why it's reallyimportant that you work with
professionals.
We do things like this all thetime, so if you haven't already
booked your concept below andyou are a business owner.
Or you're looking to start abusiness in Mexico, make sure
that you book thatconsult@entrepreneurexpat.com
(13:23):
slash consult and we can analyzeyour unique situation and help
you make sure that you'recompliant with all of these
different things and that you'realso optimizing your tax
situation across.
Different countries.
In addition to what I mentionedabout the telework space, you've
gotta make sure that you'reprocessing payroll here
properly.
You are looking at things likewithholding requirements just
like you would be in the us.
(13:44):
Contrary to popular belief, thisis not just some wild, wild west
free for all country where youcan do whatever you want.
There's, there's laws, there'ssystems that you need to make
sure that you're compliant with.
And if you're hiring people asemployees.
Then you're gonna have to have,as a corporation, a Mexican tax
ID or RFC.
And what you do when you formthat corporation is you
essentially become a personamorale under Mexican law.
(14:07):
So you have, uh, a, a corporateregistration that RFC, and
you're gonna have to withholdincome tax, social security, and
other contributions.
Now, if they're contractors,contractors must invoice you
under Mexican tax rules.
Typically they're going toregister as a persona, which
essentially means that they areindependent contractors.
(14:29):
There're there are individuals.
They don't have a registeredcorporate entity, but they are
contractors under Mexican lawand they're gonna be invoicing
you.
They're typically gonna besending you things like uras.
So there's a system, unlike theUS, where you just have a
receipt if you wanna writesomething off.
Here you have those proper CFDIinvoices or uras that are
interconnected.
So you send an invoice and thenthe tax authority sees that
(14:51):
invoice and then a companyreceives that invoice.
So there's actually, uh, it'salmost like a double ledger
accounting system whereeverything is balanced out so
that they keeps track of all ofthat tax activity within the
country for proper enforcement.
You also want to be aware.
Of the contracts and of thelocal laws, and use contracts
that conform to Mexican laborlaw.
(15:12):
Obviously you're not doingcontracts in English here.
Under the US law, you're doinglabor contracts, NDAs, and in
some cases intellectual propertyassignments.
Under Mexican law, you're gonnahave to be careful with
termination clauses andseverance rights because a lot
of those laws are very differentlike we mentioned before, than
they are from somewhere like theUS and factor in as well
cultural and operationalfactors.
(15:33):
So there's different.
Sorts of holidays.
For instance, in Mexico, there'sdifferent expectations in terms
of the hours that somebody wouldwork and overtime and things
like that.
And of course, if you are in adifferent time zone, make sure
that those things are aligned.
Uh, you're gonna wanna reviewcommunication norms because even
though there is a very similarculture here in a lot of ways to
the us, you're hiring peoplefrom a d.
(15:54):
Country, a different culture, adifferent background.
You wanna make sure that you'refollowing those communication
and cultural norms andexpectations.
And of course, you gotta betapped into the local labor
market dynamics.
So what are current wages?
Uh, how are you compensatingpeople?
What sorts of incentivestructures and things like that
are you offering to becompetitive with other employees
(16:14):
here?
And then if you are exiting thatbusiness or exiting Mexico and
that, that component of your, ofyour business.
How do you do that?
How do you scale down?
How do you plan as you scale orexit without any legal
surprises?
Now we're gonna dive into somereal world paths as well as case
studies.
From different types ofbusinesses and how they might go
about doing this.
(16:35):
So one example is a US SaaSfounder hires developers in
Guadalajara.
We see this all the time.
They're hiring Mexicans forsoftware engineering, for
DevOps, for infrastructuremanagement.
Whether they have moreoperations in, in a place like
Mexico that they're op operatinginfrastructure in, or they're
just trying to get benefits fromthat nearshoring and from
outsourcing of those positions.
(16:56):
So they hire that employee inGuadalajara through an EOR, that
employer of record, and thenthey scale the team without a US
entity, another example would bea US FinTech that will use a
mix, so maybe they usecontractors for design work here
in Mexico.
They use employees for coreengineering talent, converting
those people to full-timeemployees when needed so that
(17:17):
they can get that nice balanceof cost savings and also
compliance.
And of course, us salaries aresignificantly higher than
Mexican salaries.
You might be able to find talenthere for two to$3,000 per month
or even less, where that sametalent might cost$10,000 per
month or more in the us.
Plus you're dealing with that ahundred thousand dollars.
(17:40):
H one B visa cost now.
So it just kind of becomes a nobrainer if, if you're a mid to
large company, you are lookingat how to do this in Mexico and
how to do this in othercountries.
Because even when you factor inall of the local benefits that
you're paying that might beslightly higher as a percentage
than in the US and your employerof record fee and things like
that, you're still saving a tonof money.
(18:01):
And if you can deal with alittle bit of red tape, if you
can deal with navigating some ofthose cultural, uh, things and,
and setting the.
Systems upright to begin with interms of communication and time
zones and all that.
There are huge, huge benefits tohiring talent in Mexico, or even
bringing talent in from allsorts of other places in the
world to live and work fromsomewhere like Mexico.
(18:22):
They're in the, the similar timezone.
They're not working from Indiawhere you've got like a nine to
12 hour gap or somewhere in theMiddle East or in Pakistan.
Right.
They're, they're in a verysimilar time zone.
There's overlap directly betweenUS Pacific, all the way to US
central time, so there's a tonof benefits.
To be had from doing this sothat a hundred KH one B visa, so
(18:43):
that a hundred KH one B Visa isreally tipping the scales now
for a lot of US-based employersand they're making traditional
visa routes to bring talent intothe US so, so expensive.
But Mexico is now in a uniqueposition because a lot of
Mexicans are gonna be hired nowby US companies, and it's a more
viable and scalable strategy inthe long run.
(19:03):
If you want help structuringyour cross-border hiring or want
our plug and play partners herein Mexico, that can help you get
all of this established ifyou're a medium to large
business or even if you're just.
Starting and you're, you'relooking at, hey, how do we get
some contractors?
How do we get some employees inMexico to be able to do all of
this without us having to tap into workers from around the world
(19:26):
coming to the US and having tosponsor them and everything
else?
Then you definitely wanna bookthat call@entrepreneurexpat.com
slash consult, book that consultwith our team.
Now, if that isn't you, andmaybe you're just watching this
to inform yourself about what'sgoing on with H one B or the
laws or anything else, feel freeto check out our free resources
and courses in the description.
Of this video and make sure youhit that subscribe button, hit
(19:48):
that notification bell so thatyou don't miss any more content
on this topic.
We love that you are the bestpart of this community, the best
part of this channel.
We really thank you for watchingus all the time and give this
video a like as well, give thisvideo a thumbs up.
It helps us a ton with our goalof reaching a million
entrepreneur expats, andaspiring expats.
I'm Justin Keltner.
(20:08):
Thanks so much again for yourtime, and we look forward to
seeing you again very soon.
Bye for now.
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