Latin America is a vast, diverse, and culturally rich territory — and so it’s unsurprising that in times of remote working, the number of US companies hiring contractors from countries like Mexico is increasing dramatically.
After all, Mexican contractors are highly educated, motivated, and keen to expand their professional experience beyond their home country. With the US just next door, there are numerous opportunities for both US companies and the Mexican contractors they could consider hiring — but only if a few logistical and compliance-related hurdles are overcome.
In this article, we explore everything that US companies should consider when hiring an independent contractor in Mexico, so that they can make the most of this mutually-beneficial opportunity in an optimal and compliant way.
The Benefits of Hiring Independent Contractors in Mexico
When choosing to hire independent contractors as a remote company, the world really is your oyster. However, for companies based in the United States, there are numerous benefits to hiring Mexican contractors.
These are some of the primary benefits of hiring Mexican contractors:
Mexican labor can often be less expensive than those in the U.S., which can help keep costs down for companies. A competitive living wage for a software developer living in Guadalajara, for example, is likely to be significantly less than for the same person operating out of Austin, TX.
Mexico is located next to the U.S., which can make it easier and more cost-effective for companies to connect in-person with teams based in Mexico. Traveling between Mexico and the U.S. is both convenient and inexpensive, and therefore is a fitting alternative to collaborating with contractors based in Europe or Asia for companies who want to benefit from in-person collaboration.
Mexico has a large and skilled workforce, particularly in industries such as technology and engineering. Mexican universities have placed considerable focus in recent years on upskilling highly accomplished students in fields such as software development and project management, and therefore U.S. companies can certainly benefit from Mexican contractors’ expertise.
For example, Mexican universities such as the National Autonomous University of Mexico (UNAM), Tecnológico de Monterrey, and the Universidad Iberoamericana are known for their strong engineering programs, particularly in areas such as mechanical, electrical, and computer engineering, as well as having strong business programs, particularly in areas such as finance, management, and economics.
- Trade Relationship
The U.S. and Mexico have a strong trade relationship, and many U.S. companies have operations in Mexico. Hiring independent contractors in Mexico can help to strengthen this relationship and create new business opportunities, while making the most of the connection that these neighboring countries already have.
- Cultural Understanding
Mexican contractors may have a better understanding of the culture and market in Mexico, which can be beneficial for companies that are looking to expand their business in the region. What’s more, there is little disparity between Mexican contractors and U.S. values, given the significant overlap in customs, culture, and ways of communicating. Therefore, many Mexican contractors can integrate seamlessly into U.S. company dynamics, which can sometimes be challenging when hiring from further afield.
- Quality of Work
Mexican contractors have a reputation of producing quality work, this can be a factor that companies take into account when deciding to hire a contractor. The commitment to quality and excellence is something which companies can both benefit from in terms of output, but also in terms of company culture, by encouraging similar standards among their existing workforce.
Considerations When Hiring Mexican Contractors
When hiring Mexican contractors remotely, there are several considerations that companies should take into account:
- Legal requirements
Companies should ensure that they are in compliance with all applicable laws and regulations related to hiring remote workers, including employment and immigration laws. What’s more, preparing for the U.S. Tax Forms which will still have to be filed for Mexican contractors, even despite them being nonresident aliens, is an important consideration for U.S. employers.
Remote work can present challenges when it comes to communication and collaboration. Companies should establish clear lines of communication and make sure that all team members, including remote contractors, have the necessary tools and resources to stay connected and productive.
- Time Zones
A key consideration when hiring remotely is time zones. Companies should be aware of the time zone differences between the U.S. and Mexico, and plan accordingly to ensure that work can be done efficiently and effectively. Mexico is spread across four time zones, ranging from UTC-5 to UTC-8. Given that the U.S. spans six time zones, there is potential conflict here if synchronicity is an important facet of your teams’ ways of working.
- Potential Cultural Differences
Companies should be aware of cultural differences and make sure that they have proper training and support to help remote contractors effectively integrate into the team. This is true for all distributed teams, and being mindful of the differences that exist between workers from different parts of the world can quickly be translated from a challenge to a benefit, weaving the diversity of thought and experience into the fabric of your company’s culture.
- Trust and Reliability
Companies should be mindful that hiring remotely may create a lack of trust and reliability, it is important to establish trust and reliability through a thorough evaluation of the contractor's qualifications, experience, and references, as well as regular check-ins and progress updates.
- Payment and Taxes
Companies should be aware of the different tax and payment requirements for remote workers and ensure that they are in compliance with all applicable laws and regulations. Another important consideration here will be the currency that your Mexican contractors are paid in — and the flexibility they have to manage their income. It’s recommended to use a purpose-built tool for your international payroll, as this can become messy very quickly.
- Cybersecurity and Data Protection
Companies should ensure that all remote workers—including contractors—have access to the necessary tools and resources to protect against cyber threats and data breaches. What’s more, your organization should provide adequate training and support to ensure that contractors understand what’s expected of them with respect to information security and data protection.
Onboarding Mexican Contractors
When working remotely, hiring employees and contractors is just the starting point. In order for these working relationships to truly flourish, you need to ensure that onboarding is straightforward and supportive, and that the individuals you collaborate with get access to the services and benefits they need in order for them to stick around.
RemotePass’ free Onboarding Guide can help you ensure that your working relationships get off on the right foot, and our experts are on hand to advise you along the way should you decide to implement a single, robust digital solution to take care of things.
How RemotePass Can Help
RemotePass is the most powerful remote onboarding and payroll solution, enabling you to hire, onboard, manage, and retain remote contractors in over 190 countries around the world. For companies who are working with Mexican contractors, RemotePass enables you to pay in a currency of the contractors’ choosing, and automates the tax collection and forms that are necessary in the United States, helping you avoid any nasty penalties for non-compliance.