Labor Law And Transfer Pricing

Background

In Mexico there are many companies engaged in rendering personnel, administrative or specialized services. These services could be provided by related or unrelated parties within a multinational Group. The most common services include provision of administrative (accounting, tax, legal, financial, human resources, among others), IT, marketing, technical and manufacturing services.

Operating companies hired services from these service providers. Such service structures, as they are commonly referred to, were a business strategy for operating entities, since personnel, legal, social security, among other risks related to hiring directly their personnel was relieved, given that the personnel were hired directly by service companies that rendered the required activities or services, therefore, assuming the burden arising from the labor perspective.