Plan contractor hiring in Mexico

Use a written contrato de prestación de servicios profesionales that fixes deliverables, acceptance, fee, CFDI timing, invoice currency and due date, then settle accepted work against the contractor's SAT-sealed CFDI XML. Mexican civil law lets parties agree the remuneration for professional services, while federal tax law requires the Mexico-resident issuer to produce the electronic tax document. Onboarding should confirm the exact RFC name and current tax regime before the first invoice.

Sources: Cámara de Diputados, Código Civil Federal, Cámara de Diputados, Código Fiscal de la Federación

If the line is crossed

If the actual work is subordinated, the foreign business using the services becomes the employer for the Mexican labor relationship and must treat the individual as a worker. The relationship then carries worker rights such as paid vacation and aguinaldo, while mandatory social insurance applies to remunerated, personal and subordinated service. The Social Security Law requires an employer to register, enroll the worker and report changes within five business days. An offshore employer needs a Mexico-specific route for payroll and social-security enrollment, so pause contractor renewals and implement a compliant arrangement before the subordinated work continues.

Sources: Cámara de Diputados, Ley Federal del Trabajo, Cámara de Diputados, Ley del Seguro Social

Constancia de Situación Fiscal con Cédula de Identificación Fiscal

Tax Status Certificate with Tax Identification Card

This SAT-generated certificate is the onboarding record for the contractor's registered identity, RFC location and tax characteristics. Ask the contractor to provide a current copy voluntarily, then use it to enter the exact legal name and issuer regime expected on CFDI 4.0. The contractor generates it through SAT when needed; the payer does not issue it. It confirms registered tax data and does not certify independent-contractor status, good standing or the IVA result for a particular service, so keep the services agreement and transaction records separately.

Issued by: Generated by the contractor through SAT

Timing: Before the first CFDI and again when the contractor reports a registered-data change

Sources: SAT, Constancia de Situación Fiscal procedure

Comprobante Fiscal Digital por Internet (CFDI) 4.0

Internet Digital Tax Receipt

This is the contractor's Mexican electronic tax invoice for the service, and the SAT-sealed XML is the operative file the payer should retain. The contractor sends the electronic file after validation and should provide a readable representation for accounts-payable review. Validate the folio and certificate status through SAT before release, then match the UUID, issuer, receiver, service, currency, amount and IVA presentation to the approved work. A readable representation alone only presumes the CFDI exists and cannot replace the XML, SAT check or commercial acceptance record.

Issued by: The Mexico-resident contractor through SAT-authorized validation

Timing: For the invoiced service under the contractor's applicable CFDI timing and collection facts

Sources: Cámara de Diputados, Código Fiscal de la Federación, SAT, CFDI 4.0 Anexo 20 technical standard

The contractor must issue CFDI 4.0, and 0% IVA is available for an independent personal service only when the foreign customer has no Mexican establishment and the service is used wholly abroad. Work performed from Mexico starts as a service supplied in Mexican territory, so a foreign customer address alone cannot establish the export rate. If 0% applies, align the contract, Exportacion field, service description and IVA presentation, and keep records showing receipt into the contractor's account at a Mexican credit institution from the foreign resident's account at a foreign financial institution. Mixed Mexican use needs a fresh IVA analysis before invoice approval.

Sources: Cámara de Diputados, Ley del Impuesto al Valor Agregado, Cámara de Diputados, Reglamento de la Ley del Impuesto al Valor Agregado, Cámara de Diputados, Código Fiscal de la Federación

What an invoice has to show

• Mexican issuer RFC, exact legal name, tax regime, issue place and SAT seals

  These fields identify the Mexico-resident contractor and show that SAT validated the invoice under the issuer's registered tax position. Match the RFC, name and regime to onboarding data; confirm the issue place and date, folio, issuer seal and SAT seal in the XML; and validate the folio and certificate status through SAT. A mismatch can make the CFDI unusable for the contractor's tax records and leaves the payer with a document that does not cleanly identify the party that signed and performed the services agreement.

  Sources: Cámara de Diputados, Código Fiscal de la Federación

• Foreign customer name and generic RFC XEXX010101000 when the customer is outside the RFC

  This receiver setup identifies the actual foreign customer where the buyer has no Mexican RFC registration. Use the buyer's exact legal name and the generic foreign-resident RFC XEXX010101000, then complete the receiver configuration and any applicable foreign-residence or foreign tax-identity fields under CFDI 4.0. Do not substitute an unrelated Mexican group company because that changes the documented recipient. If the buyer later obtains a Mexican RFC, the contractor must reassess the receiver fields rather than keep using the generic key by habit.

  Sources: SAT, Resolución Miscelánea Fiscal para 2026, SAT, CFDI 4.0 Anexo 20 technical standard

• Exportacion field and IVA presentation that match actual foreign use

  This pairing shows whether the CFDI covers an export operation and whether the invoice's IVA position follows the service facts. CFDI 4.0 requires Exportacion, while the 0% rate for independent personal services depends on complete use abroad by a foreign resident without a Mexican establishment. Approve the invoice only after the service owner confirms where the output is used and the contractor has aligned the export field with the IVA rate. A foreign address or foreign-currency price cannot cure Mexican use of the service.

  Sources: SAT, CFDI 4.0 Anexo 20 technical standard, Cámara de Diputados, Ley del Impuesto al Valor Agregado

• Catalog service key, standardized unit, service description, value, currency and TipoCambio when required

  These concept fields connect the CFDI to the delivered service and make a foreign-currency amount readable under Mexican tax rules. The contractor should choose a catalog service key and standardized unit that fit the actual work, describe the accepted deliverable specifically, and state the unit value and total. Moneda is required; when the currency is neither MXN nor XXX, TipoCambio must show the number of Mexican pesos for one unit of that currency. Match the commercial invoice currency and amount to the contract before approval.

  Sources: SAT, CFDI 4.0 Anexo 20 technical standard

The contractor should bill with a SAT-validated CFDI, and the payer should release settlement after matching its XML to the accepted service, contract amount and invoice currency. On these facts, this payer does not apply LISR Article 106 or 113-J retentions or LIVA Article 1-A withholding because it has no Mexican entity, PE, IVA establishment or taxable activity; reassess if those facts change. Mexican IVA for services follows actual collection and each amount collected, so the contractor's receipt date matters to the tax record even where the verified rate is 0%. If the export rate is used, retain the contract and proof of receipt into the contractor's account at a Mexican credit institution from the foreign resident's account at a foreign financial institution. Keep approval, settlement and tax-document identifiers together so later corrections can be reconciled to the same transaction.

Sources: Cámara de Diputados, Código Fiscal de la Federación, Cámara de Diputados, Ley del Impuesto al Valor Agregado, Cámara de Diputados, Ley del Impuesto sobre la Renta, SAT, Anexo 3 de la Resolución Miscelánea Fiscal para 2026, Cámara de Diputados, Reglamento de la Ley del Impuesto al Valor Agregado

When invoices are settled

Put the settlement due date and acceptance trigger in the contract instead of assuming one market term applies to every Mexican contractor. If Mexican federal civil law governs a professional-services agreement and the parties leave timing open, Article 2610 places payment at the provider's residence immediately after each service or after the entrusted work concludes. That fallback may produce a much earlier due date than an accounts-payable cycle. State the governing law, payment place, milestone, invoice trigger and disputed-invoice process together so the contractual term displaces avoidable uncertainty.

Sources: Secretaría de Gobernación, Código Civil Federal Article 2610, Cámara de Diputados, Código Civil Federal

The currency on the invoice

A contractor may express the CFDI in a foreign currency supported by the CFDI catalog, and a non-MXN currency other than XXX makes TipoCambio mandatory. That field records the number of Mexican pesos equal to one unit of the stated currency. Put the same invoice currency in the services agreement and acceptance record, and define any commercial conversion rule separately. Accounts payable should compare Moneda, TipoCambio and total in the XML with the agreed price, since an accurate foreign-currency total paired with the wrong peso conversion creates a formally inconsistent Mexican tax document.

Sources: SAT, CFDI 4.0 Anexo 20 technical standard

Local currency rules

Foreign-currency debts payable in Mexico have two Article 8 outcomes: a peso-equivalent discharge rule generally, and delivery of the foreign currency when the receipt originates abroad and is handled by Banco de México or a credit institution. Specify the payment place, currency and receipt setup after Mexican advice because those facts select the outcome. Separately, a contractor applying 0% IVA to exported independent personal services should retain proof of receipt into the contractor's account at a Mexican credit institution from the foreign resident's account at a foreign financial institution. Address both issues in contract, invoice and settlement review.

Sources: Cámara de Diputados, Ley Monetaria de los Estados Unidos Mexicanos, Cámara de Diputados, Reglamento de la Ley del Impuesto al Valor Agregado

Treating a foreign customer as automatic proof of 0% IVA

A foreign customer alone does not justify 0% IVA; using that rate without complete foreign use and a customer without a Mexican establishment can leave the contractor's CFDI inconsistent with the service facts. Ask where the deliverable is consumed, whether any Mexican team or operation uses it, and which foreign entity contracted the work. When the export position applies, retain the agreement and the records linking the foreign customer's originating account to the contractor's Mexican receiving account. If use is mixed or unclear, have the contractor obtain Mexican tax advice before issuing the CFDI rather than approving an assumed export rate.

Sources: Cámara de Diputados, Ley del Impuesto al Valor Agregado, Cámara de Diputados, Reglamento de la Ley del Impuesto al Valor Agregado

Approving the readable copy without validating the CFDI XML

A readable invoice copy alone does not establish a valid CFDI, so paying from that copy can leave the payer without the operative Mexican tax document. Require the SAT-sealed XML, verify the folio and certificate status, and match the UUID, issuer, receiver, currency, total and IVA presentation to the accepted work. The visual representation is useful for review and only presumes that the CFDI exists. Keep both representations with the commercial approval, and return mismatched or invalid files for proper correction before releasing settlement.

Sources: Cámara de Diputados, Código Fiscal de la Federación

Turning deliverable oversight into continuing managerial command

Continuous orders about where, when and how the individual works can create subordinación jurídica and expose the foreign business to employer obligations despite a contractor agreement and CFDIs. Keep direction focused on scope, security, deadlines, acceptance criteria and correction of deliverables. Avoid imposing an employee schedule, day-long availability, permission-based absences or a standing duty to obey a line manager. Reassess the role when operating needs require those controls; if the facts are already subordinated, move to a compliant Mexican employment and social-security arrangement before continuing the work.

Sources: Cámara de Diputados, Ley Federal del Trabajo, Semanario Judicial, jurisprudencia I.6o.T. J/96, Semanario Judicial, tesis 248087