The Next Generation of R&D in Mexico: an EOR Model Built for Export

Mexico’s Evolving Innovation Landscape

Mexico is no longer defined only as a manufacturing powerhouse. It’s quickly becoming a hub for research, development, and innovation (R&D). With growing investment in engineering, design, and technology, the country is attracting global companies that want to innovate closer to production and access a deep, cost-competitive talent pool.

According to the OECD and CONACYT, Mexico’s R&D sector has grown steadily in the past decade, supported by expanding foreign direct investment (FDI), university–industry collaboration, and nearshoring trends. States such as Nuevo León, Querétaro, Jalisco, and Guanajuato have become magnets for research and innovation in advanced manufacturing, aerospace, biotechnology, and energy.

Yet one question often arises for foreign firms:

How can we build and manage R&D teams in Mexico without creating a full legal entity?

That’s where the Employer of Record (EOR) model comes in.

The EOR Model: A Strategic Framework for R&D Growth

An Employer of Record (EOR) enables foreign companies to legally hire and manage employees in Mexico without establishing a local subsidiary. This model provides an agile, compliant way to build engineering, R&D, and service teams, allowing organizations to focus on innovation while their EOR service provider manages HR, payroll, and labor compliance.

For the R&D sector, this flexibility is crucial. The EOR model allows companies to:

• Quickly assemble specialized innovation teams in Mexico.

• Maintain compliance with Mexican labor, tax, and social security regulations.

• Avoid permanent establishment risk.

• Scale up or down as projects evolve.

• Access incentives under the IMMEX Program when exporting services or technology.

In short, the EOR model bridges talent and compliance, enabling companies to develop and export intellectual capital from Mexico with minimal administrative burden.

Mindfacturing®: The Binational EOR Solution for Innovation

Prodensa’s proprietary solution, Mindfacturing®, takes the EOR model one step further.
It is a binational Employer of Record built specifically for companies leveraging Mexico’s IMMEX Program to perform exportable services such as:

• Engineering and product design

• Software development and IT support

• Testing and quality assurance

• Data analytics and digital transformation projects

Under Mindfacturing®, companies can:

• Hire Mexican professionals compliantly under an IMMEX-registered structure.

• Export their R&D or service output while maintaining U.S.-Mexico tax alignment.

• Protect intellectual property and maintain seamless binational collaboration.

• Accelerate time-to-market through flexible, locally managed teams.

Mindfacturing® embodies the evolution from manufacturing to mindfacturing, where Mexico’s industrial foundation meets knowledge-based innovation.

The R&D Sector in Mexico

Mexico, a nation rich in culture, history, and resources, has in recent years been positioning itself as a burgeoning hub for research and development (R&D). With a strategic geographic location, a growing economy, and a skilled workforce, Mexico presents a fertile ground for both domestic and international activities in the R&D sector in Mexico.

The Nature of R&D in Mexico

The landscape of the R&D sector in Mexico is diverse, encompassing a broad range of fields:

Agricultural Research

Given Mexico's agricultural history, there's significant research into improving crop yields, sustainable farming practices, and the development of new agricultural technologies. Some of the private sector companies engaged in the agricultural R&D sector in Mexico include:

• Gruma: Known for its global leadership in corn flour and tortilla production, Gruma invests in agricultural research to enhance corn varieties, improve farming practices, and ensure a consistent supply of quality maize.
• Grupo Bimbo: While primarily a bakery company, Grupo Bimbo is involved in the sustainable sourcing of wheat and other grains. They invest in research related to sustainable farming, grain quality, and agricultural supply chain management.
• Bayer Crop Science: As a global leader in the agrochemical and seed industry, Bayer has a presence in Mexico with a focus on research related to crop protection, seeds, and digital farming solutions tailored to the Mexican market.
• Syngenta: Another global agribusiness company, Syngenta has operations in Mexico that focus on developing crop protection products, seeds, and technologies suited for Mexico's diverse agricultural landscape.
• Monsanto (now part of Bayer): Before its acquisition by Bayer, Monsanto had research activities in Mexico focusing on plant genetics, biotechnology, and sustainable agriculture solutions.
  

Biotechnology & Pharmaceuticals

The Biotech R&D sector in Mexico is focused on areas like genetic research, drug development, and medical devices. Among the private sector companies and public sector organizations engaged in R&D activities in the areas of biotechnology and pharmaceuticals are:

Private Sector Companies

• Liomont: Based in Mexico City, Liomont is one of Mexico's leading pharmaceutical companies. They specialize in the development, manufacturing, and commercialization of pharmaceutical products, including biotechnological drugs.
• Silanes: Another prominent Mexican pharmaceutical company, Silanes, has a diverse portfolio of products and is involved in R&D activities focused on drug development and innovation.
• Landsteiner Scientific: With a presence in both Mexico and other Latin American countries, Landsteiner Scientific is engaged in the development, manufacturing, and commercialization of pharmaceuticals, including biologics and biosimilars.
• Rimsa: Known for its research capabilities, Rimsa develops and manufactures a wide range of pharmaceutical products and has been involved in collaborations for the development of new drugs.

Public Sector Organizations:

• National Institute of Medical Sciences and Nutrition Salvador Zubirán (INCMNSZ): This prestigious institution in Mexico City conducts cutting-edge research in various medical fields, including biotechnology and pharmacology. They collaborate with other research institutions and international partners on R&D projects.
• National Council of Science and Technology (CONACYT): As the main governmental body promoting scientific research in Mexico, CONACYT plays a pivotal role in funding R&D initiatives in biotechnology and pharmaceuticals. They offer grants, scholarships, and support for research projects across the country.
• National Institute of Genomic Medicine (INMEGEN): Located in Mexico City, INMEGEN focuses on genomic research, including the study of genetic factors related to diseases and the development of personalized medicine approaches.
• Mexican Social Security Institute (IMSS) and Mexican Institute of Social Security and Services for State Workers (ISSSTE): These institutions, responsible for providing healthcare services to a significant portion of the Mexican population, also engage in R&D activities, clinical trials, and the evaluation of new pharmaceutical products and treatments.

Automotive Manufacturing

With the presence of major automotive companies, R&D in this sector is focused on electric vehicles, automation, and advanced manufacturing processes.

• General Motors (GM): One of the world's largest automakers, GM has multiple manufacturing facilities in Mexico and conducts R&D activities related to vehicle design, engineering, and technology integration.
• Ford Motor Company: Ford has a longstanding presence in Mexico, with manufacturing plants and R&D facilities focusing on vehicle development, innovation, and technology solutions tailored for the Mexican and global markets.
• Fiat Chrysler Automobiles (now part of Stellantis): With operations in several Mexican states, Stellantis (formed by the merger of Fiat Chrysler Automobiles and PSA Group) has activities in the R&D sector in Mexico related to vehicle design, engineering, and advanced technologies.

• Nissan: Nissan has significant operations in Mexico, including manufacturing facilities and R&D centers. The company conducts research and development activities focusing on vehicle design, technology, and innovation for the global market.
• Volkswagen (VW): Volkswagen has manufacturing plants in Mexico and conducts R&D activities, including engineering, design, and technology development, to support its global operations and product lineup.
• Audi: As a subsidiary of Volkswagen Group, Audi has a presence in Mexico with manufacturing facilities and R&D activities focusing on vehicle development, design, and innovation.

Renewable Energy

As the world shifts towards cleaner energy sources, Mexico is investing in R&D related to solar, wind, and hydroelectric power. Numerous public and private entities are engaged in research and development activities focused on renewable energy. Among them are:

Universities and Research Institutions

• National Autonomous University of Mexico (UNAM): UNAM has research centers and institutes dedicated to energy studies, including renewable energy technologies, solar power, wind energy, and biofuels.
• Monterrey Institute of Technology (ITESM): ITESM researches renewable energy, sustainable technologies, and energy management, collaborating with industry partners and government agencies.
• National Institute of Electricity and Clean Energies (INEEL): Located in Cuernavaca, Morelos, INEEL is a leading research institution focusing on energy research, including renewable energy technologies, energy efficiency, and grid integration.

Governmental Organizations and Agencies:

• National Renewable Energy Center (CENER): As part of the Ministry of Energy (SENER), CENER plays a key role in promoting renewable energy R&D, providing technical support, and fostering innovation in the renewable energy sector.
• National Commission for Energy Efficiency (CONUEE): CONUEE is involved in promoting energy efficiency and renewable energy technologies through R&D, capacity building, and policy development.

Industry and Private Sector Initiatives:

• Solar and Wind Energy Research Centers: Several private companies, including those involved in the solar and wind energy sectors, have established research centers and facilities in Mexico to develop and test renewable energy technologies, optimize system performance, and explore new applications.
• Collaborative Projects and Partnerships: Industry-academia collaborations, public-private partnerships, and international initiatives play a crucial role in advancing renewable energy R&D in Mexico. These collaborations often involve joint research projects, technology development, knowledge exchange, and capacity-building activities.

Renewable Energy Test and Demonstration Sites

• Solar and Wind Farms: Mexico has numerous solar and wind farms that serve as test sites and demonstration facilities for renewable energy technologies. These facilities provide valuable insights, data, and opportunities for R&D activities, technology validation, and performance assessment.
• Bioenergy Research Centers: Research centers focusing on bioenergy, including biofuels and biomass, contribute to the development and optimization of renewable energy sources derived from organic materials, agricultural residues, and waste resources.
  

R&D Hotspots Driving Mexico’s Innovation Momentum

R&D activities in Mexico aren't evenly distributed; certain regions have emerged as key hubs:

• Mexico City: As the capital and academic center, Mexico City hosts major universities, research institutions, and a growing number of tech startups.
• Monterrey: Known for its industrial prowess, Monterrey is a hub for automotive, manufacturing, and tech-based R&D.
• Guanajuato and Querétaro: These states are emerging as automotive and aerospace R&D hubs due to their strategic location and infrastructure.
• Tijuana and Ciudad Juarez: these cities are maquiladora powerhouses with integrated R&D operations to stay at the cutting edge of consumer technology.

Linking R&D and IMMEX: From Manufacturing to Service Exports

Mexico’s IMMEX Program has traditionally supported manufacturing for export, but in recent years, it has also become a platform for service-based exports, including engineering, IT, and design.

Through Mindfacturing®, companies can perform exportable R&D services under IMMEX registration, unlocking benefits such as:

• VAT exemption on exported services.

• Streamlined import/export of digital assets and technology.

• Simplified reporting and compliance through a registered operator.

This model enables innovation to flow across borders with the same efficiency as physical goods — redefining nearshoring for the digital era.

The Road Ahead: Building Mexico’s Knowledge Economy

The country’s innovation capacity, combined with binational workforce structures like Mindfacturing®, allows companies to integrate R&D teams seamlessly across the region, and strategically into their production footprint.

From automotive electrification and semiconductor design to renewable energy technologies and biotech, the EOR model in Mexico provides the agility global companies need to innovate where it matters most.

Ready to Build Your R&D Team in Mexico?

Whether you’re scaling an innovation center, launching an engineering project, or exploring service exports, Prodensa’s Mindfacturing® helps you bridge the gap between U.S. strategy and Mexican execution.