Managing a globalized network of employees is quite difficult for many companies. Dealing with Business visitors, permanent residents and stealth employees could bring hidden and unknown risks to employers. In this blog we will identify some of the factors that could triggers an issue in regards to immigration law, tax and compliance.
While U.S. companies can send their U.S. citizen employees to Mexico easily and quickly without having to obtain visas, it is important for HR and Global Mobility Managers to remember that while holding Business Visitor Status an individual is very limited in what he or she can do, which can seriously impede an individual’s daily activities.
Business Visitors may participate in business activities (such as business meetings, visits to install or repair machinery or equipment, or providing technical assistance at a client or affiliate company) for up to 180 days per visit as long as they are not paid by a Mexican entity.
Visitors will not be authorized to
- Receive payment in Mexico
- Open a Bank Account
- Secure loans
- They will not be allowed to apply for other countries’ Visas while in Mexico.
Stealth business travelers – or employees who work outside their home country, but who are not part of a business’s formal international assignment or global mobility program. This type of employee will typically not be tracked by the human resources (HR) department as a global employee and will often work in a foreign location for varying lengths of time without HR’s knowledge. Compared with many countries, including the United States and Canada, Mexican authorities allow individuals to perform a broad range of activities as long as they are not being paid in Mexico.
Doing business in Mexico can also trigger Mexican social security requirements as an employee might be required to contribute to both the U.S. and the Mexican social security systems.
- It is important, however, that pre-departure discussions are held with employees to make sure they understand what they can and cannot do while in Mexico as a business visitor, particularly considering that certain activity can have serious adverse effects.
- Please remind your employees that U.S. tax advisors should advise them on their U.S. tax compliance.
This blog was made using information from Grant Thornton LLP and Greenberg Traurig, LLP.