The Executive Who Stayed Too Long: When Global Mobility Creates A Permanent Establishment In Mexico

The assignment looked perfectly managed. The executive had immigration status. Payroll had reviewed requirements, tax filings were on schedule, and travel days were tracked. However, one question had been overlooked: had the executive quietly brought the foreign enterprise into Mexico?

Permanent establishment (PE) is often treated as a real estate issue, a branch, office, or factory. In practice, it can begin with a person. A foreign executive extends a stay in Mexico, works from an affiliate’s office or home, leads operations, negotiates terms, directs personnel, or secures approvals that headquarters endorses. Together, these facts may show that the foreign company is conducting business in Mexico through a fixed place or dependent agent.