FW speaks with Juan Carlos Aguilar Noble, a partner at Fragomen Mexico, S. de R.L. de C.V., about developments in corporate immigration in Mexico.
FW: Could you briefly outline the current legal and regulatory landscape for corporate immigration in Mexico? What trends and developments have you seen in recent years?
Noble: Mexico’s immigration policies have recently undergone significant change following the implementation of the 2012 Immigration Reform Act. Almost two years after the new Law was implemented, local authorities and companies are still working to define the scope and reach of the different processes that were introduced. This has been a steady, challenging and healthy process where areas of opportunity have been clearly identified and will continue to be improved as local authorities move on to work closely with the agents and companies that intervene in corporate immigration. This shows the effect of political willingness of the new government toward investment and development in Mexico. Some of the main issues that companies have found in recent years like delayed processing times and inconsistent application of the law have been a consequence of limited resources and a lack of standardised practices outside of Mexico City. Local immigration authorities, however, continue to actively work towards improving service and responsiveness. With significant changes to regulations being discusses, which will affect oil and gas, telecommunications and taxes, Mexico’s corporate immigration landscape looks promising for companies and agents willing to invest and bring talent into the country.
FW: To what extent do immigration policies in Mexico impact the ability of firms to hire, retain and transfer staff?
Noble: Hiring, transferring and retaining foreign talent are some of the core topics for discussion at present. Currently, our regulatory framework does provide companies with a fairly accessible process for transferring or assigning foreign nationals into Mexico and on-boarding foreigners who are already in the country under ‘temporary resident’ status once a local presence in Mexico has already been established. Hiring a foreign national in Mexico implies the existence of a local partner or sister entity already operating in the country. This company needs to be registered with local immigration authorities by means of a ‘corporate registration certificate’. Corporate registration significantly facilitates the process for applying new visas and needs to be updated on a yearly basis. Since foreigners are granted work visas under the sponsorship of a duly registered company, this becomes an instrument for retaining talent while the employee’s work authorisation in Mexico is linked to the company. The process for transferring foreign employees from one local entity to another, or hiring a foreign national in Mexico who is already authorised to work has also been simplified. This process is called a ‘change of employer notification’ and it serves as a mere notification to immigration, not a request for authorisation.
FW: What is the process for third-party contractors obtaining work permission in Mexico?
Noble: Third-party contractors obtaining work permission in Mexico should follow the same application process as all foreign nationals seeking work authorisation in the country. The company holding their payroll should sponsor them with immigration. Companies allowing foreign third-party contractors into their facilities need to make sure that these resources have proper work authorisation and are legally rendering services in Mexico. This can be achieved through ‘temporary FMM business visitor status’ – which allows a wide range of activities to be performed, provided no remuneration is covered in Mexico – or by means of a ‘temporary residence’ for longer assignments. Sub-contracting or outsourcing services is a common method for bringing in resources and talent, but companies operating with such resources need to make sure that labour and immigration regulations are being met in order to prevent liabilities or co-responsibility from an immigration or labour perspective.
FW: Would you say that corporate immigration policies in Mexico are relatively open or closed to foreign nationals? What are the underlying reasons behind this?
Noble: Corporate immigration policies in Mexico are open for foreign nationals who apply with the assistance and sponsorship of duly registered Mexican legal entities. The corporate registration process that the company needs to follow is a one-time registration with local immigration authorities, and this will allow companies to file for and obtain work visas into Mexico. Some of the underlying reasons for these open policies are the execution and implementation of international agreements and treaties, flexible regulations for immigration in North America, a recent change of government and continuous efforts to attract foreign investment into Mexico, supported by corporations and social agents. More flexible policies and accessible regimes have been accompanied by a continued effort from the authorities to standardise polices and improve processing times for visa applications and post-arrival registrations. New officials are being trained on best practices and compliance at the same time that new offices and resources are being put in place to improve and aid the existing system.
FW: What penalties can firms expect to face if they are found to be in breach of Mexico’s corporate immigration laws?
Noble: The Mexican Immigration Law does provide penalties for both the company and the foreign national when found in breach of current regulations. This can happen when assignees perform non-authorised activities or if the company allows access to their facilities or hires foreign nationals who do not yet posses the correspondent work authorisations. For the company that breaches immigration regulations or is found to be in non-compliance with local requirements, the suspension or cancellation of the corporate registration certificate could apply. Foreign nationals are also subject to fines or the cancellation of their status in Mexico. If a foreign national has been found to be performing remunerated activities in Mexico without proper authorisation, they could be compelled to leave the country within a certain time period and even face deportation.
FW: What considerations should companies make when designing programs and procedures to control and monitor their immigration strategy?
Noble: Companies should always consider keeping an updated corporate registration certificate with immigration in Mexico as a priority, along with having detailed information available on case or work visa specific requirements, eligibility and timeframes. When designing programs and procedures for immigration in Mexico, making sure that the company is able to sponsor such procedures is critical for efficient and time-effective relocations or transfers. Another key part of any immigration strategy is the maintenance of the legal status of all employees. Having an accurate database of expiration dates both for the assignee and their dependents are critical points for maintaining compliance and legal status in Mexico. In addition, companies should make sure their immigration strategy is aligned with their tax and labour policies. Finally, having constant feedback and information from local experts on trends and important changes within immigration also important to setting realistic expectations and defining business plans.
FW: How, if at all, is new technology assisting Mexican companies with their immigration needs?
Noble: In connection with the implementation of new technologies at local immigration offices, the National Immigration Institute has continued its longstanding efforts to include new technologies and processes with the implementation of online applications and email notifications, which help streamline all processes and response times. It is intended that the Mexican government will continue to include new technologies and solutions as they implement newly created regulations – especially within the immigration system.
FW: Mexico allows many non-US citizens to enter Mexico as business visitors without having to obtain visas, but with certain limitations on what they can do. How can business activities be impeded by ‘business visitor’ status?
Noble: Under current regulations all business activities can be performed in Mexico while on ‘business visitor status’ as long as the assignee is not receiving any kind of remuneration or benefits from a Mexican source, and as long as they do not surpass the 180 days per visit limit. There are some limitations that can apply for business visitors, especially when they are intended to perform ‘offshore activities’ – for example, render services in oil-rigs or vessels – or if they will perform activities which can be considered of a ‘professional nature’ and that would require a professional license to be issued, such as in the case of lawyers and doctors, among others. In all cases, companies should verify whether their assignees are visa-exempted nationals or visa nationals. Visa nationals should request a ‘visitor visa for non-remunerated activities’ directly at the Mexican consular post nearest to their current place of residence, in order to be able to enter Mexico. Other than this, all business related activities are permitted under the business visitor status in Mexico, and assignees shall be granted with the Multiple Purposes Immigration Form (FMM immigration form) at the port of entry, which is valid for up to 180 days per visit.
FW: Compared with many countries, Mexican authorities allow ‘stealth business travellers’ to perform a broad range of activities as long as they are not being paid in Mexico. What considerations should individuals make before travelling to Mexico in this capacity?
Noble: Any business visitor should first make sure that they qualify for the business visa waiver program. This is always best confirmed by a local counsel who is aware of the different nationalities that can apply for this benefit. Nowadays, business visitors travelling with valid passports issued by the US, the EU, Canada, Japan and several other countries, are able to enter Mexico under business visitor status without a previously issued visa which allows a wide range of activities to be performed while in Mexico. It is important to note that tax and labour contingencies should be taken into account at the time the company determines the type of visa to be obtained. If the foreign national will receive salary or economic benefits of any kind from the Mexican company or if the assignee will remain in Mexico for over 180 days per year, then the assignee shall apply for a work visa in order to prevent negative effects like the creation of a ‘permanent tax establishment’, or becoming subject to more rigorous admission processes.
FW: How important is it that foreign companies seek external, local advice on the regulatory framework for immigration, and their compliance obligations, when operating in Mexico?
Noble: Having local expert advice is critical for companies seeking to expand or maintain operations in Mexico, especially taking into consideration that immigration is the key to a country’s market. Making sure that a companies’ workforce is legally entitled to work within any given country is the first step towards making sure that compliance policies, anti-bribery regulations and country-specific regulatory frames are being observed. Additionally, having expert advice will always assist in sorting out specific cultural differences and setting up realistic timeframes. A company’s strategy and business plan is always best prepared and addressed when assisted by local experts, who will help with elaborate plans and define a course of action that correlates to the business needs.
Juan Carlos Aguilar Noble is a partner at Fragomen’s Mexican office, which he co-founded in November 2012. Fluent in both English and Spanish, Mr Noble is widely experienced in providing strategic immigration planning to multinational companies doing business in Mexico. He played a formative role in helping to develop the recent changes to Mexico’s immigration laws and regulations. Mr Noble is a member of different chambers and associations, including the Mexican Bar Association and the Canadian Chamber of Commerce. He can be contacted on +52 55 5955 4400 or by email: email@example.com.
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