Starting a Business in Mexico

Starting a Business in Mexico

We not only moved to Mexico, but we started a business in Mexico. While many of the steps to working legally in Mexico are easy to find on most forums, we thought it would be helpful for us to explain what we did – and why.

There are two ways to legally work in Mexico. You can get a work visa if a company (Mexican or foreign) proves to immigration that they need your expertise. They take care of the paperwork and costs. Perhaps this might happen in your case, but it isn’t that likely.

The second, and most common method, is to own a business. You could have a Mexican partner who handles the paperwork and we were told there are advantages to this as far as paying taxes. But, there are potential pitfalls, not least of which is that you have a partner.

If things go badly with your partner, do you (as a foreigner) really want to have a legal dispute with a Mexican national, or have to sue a Mexican national? We didn’t. If decide to set up your business with a partner, have an attorney that you trust draw up a bilingual contract to protect your investment.

We decided to start our own corporation. This will require filing legal papers in Spanish. They will be created by a notario, who has more power and responsibilities than a notary in the U.S. The best advice we received was to hire a good attorney who had experience with this type of legal work and who is fluent in English (since we are not fluent in Spanish).

Our attorney came highly recommended and we liked her immediately. She had experience setting up corporations and helping people apply for working FM3 visas. First you create the corporation. Once that is completed, you then apply to immigration for the right to work for your corporation. She also advised us to create an Limited Liability Corporation (LLC) (in Mexico S. de R.L. de C.V.) since it is less expensive to create and the tax liabilities are not as great.

Your corporation will need an accountant to set up your account and file your taxes with the Mexican tax authorities (Hacienda). We didn’t select an accountant quite as easily as our attorney.

The first two we interviewed probably weren’t crooks, but we heard different stories about procedures from each. One told us we would be required to transfer anything we earned to a U.S. account (with him getting a % each time), then access our money by using an ATM. This was bogus and we walked quickly from his office.

Finally, as usually happens in Mexico, we interviewed a good friend’s nephew and he was the real deal and spoke clearly about our obligations and procedures.

After our corporation was approved and our papers were issued (about 4 – 6 weeks depending on when and where you file), we applied with immigration for “working” FM3 visas. These took about six weeks. Our attorney prepared the applications, we had to present copies of our corporate papers, our college diplomas and letters of reference or recommendations. Since we are photographers, we even included a book that I had photographed for National Geographic with our application.

We started our process in mid-November, which might be one of the worst times of the year to begin. In our case, the process was interrupted by the Christmas and New Year holidays. Government offices shut down for 2 -3 weeks and we practiced the art of patience.

Our attorney also accompanied us to the immigration offices for our interviews.

Total costs for getting all of this completed break down like this:

Attorney fees, notario fees, government filing fees for Limited liability corporation: $2,200 usd

Attorney fees, immigration fees for two Working FM3s: $1,200 usd

Accountant fees for setting up paperwork with SAT for taxes: $875 usd

VERY IMPORTANT ! ! ! ! DO NOT ATTEMPT TO WORK UNTIL YOU HAVE YOUR PAPERS IN ORDER.

We know one American on the island who has had several visits from immigration in the past couple of years, because jealous competitors complain to immigration that she is working without a permit. Of course, she isn’t, but that’s just an example of the risks you run working illegally. You don’t want to get caught without the proper paperwork!

Has anyone dealt with these problems? Please add your experiences or correct any of my errors.

Posted by Michael and Jennifer Lewis, Cozumel Photographers and bloggers on Latin Journeys.net

Posted in Personal ExperiencesComments (0)

Moving to Mexico, Pt. 2

Moving to Mexico, Pt. 2

After more than twenty-five years of dancing around the idea of being an expat, a year ago I became one.

In the previous post, we mentioned several things that we love about Mexico after living here for one year.

It occurred to me that I should tell you why. Why did we move? Why do we love it?

Flash back to 2008. My 16-year marriage had just ended and the photography world was changing faster than I was. I sat alone in a new apartment, in a new town for three months and tried to figure out where my life was headed.

I’ve had quite a life: traveled to more than 45 countries, lived in Paris, hiked the Himalayas, criss-crossed India by train, skied expert runs in Colorado, and indulged myself with good food and wine at every opportunity. I have made a comfortable living as a photographer since 1981. I have traveled into the Sahara, been swarmed by bugs in the Cameroon rain forest and boated down the Niger River for National Geographic; shot assignments for books and magazines; and have always been grateful for my photography career.

But, here I was, single and middle-aged (hell, late 50s is middle-aged if you are going to live past 100!). The thought of dating in my 50s was about as much fun as being nibbled to death by ducks. The economy at that time didn’t add to my overall mood.

Jennifer and I had met in a small mountain town in Colorado a few years before we started dating. She was leaving as I was arriving, making changes to her life at the time. Jennifer had worked for several years as a massage therapist and owned a day spa. She wanted to pursue her dreams of travel and photography and was leaving Creede for Brooks Institute in California.

Three years later, I spotted her, loaded down with camera gear, working a 4th of July parade. I asked her out on a date, she said yes, and we have been together since the summer of 2009. Business partners, life partners, best friends.

After a couple of months of dating, we talked about living in a Spanish-speaking country. The U.S. was feeling less like home and we both wanted something new, someplace we would be passionate about, a place to start a new life and a new business. A three-month road trip (rental cars, buses and trains) through Peru, Bolivia and Argentina gave us wonderful experiences and a decent library of photos to submit to National Geographic, but no great prospects for a new home.

A series of discussions and inquiries led to a drive through Mexico, with the intention of living on the island of Cozumel for six weeks, working, shopping and test driving the town, island and country. My travels over the years have taken me to Oaxaca, Michoacan, Chiapas, much of the Yucatan, Zacatecas, Guanajuato, Cabo, D.F. (Mexico City) and numerous trips to Cozumel for diving. I already had a serious love affair going with the country. It was Jennifer’s first visit. Luckily, she fell in love, too.

What We Love and Why

We love the architecture and setting of San Miguel de Allende. Our first meal was posole and chile rellenos at the rooftop terrace at La Posadita. The quality of the food and the setting across from the Parroquia has made this our obligatory stop when we are there.

Posole at La Posadita, San Miguel de Allende, Guanajuato

We have been to Chiapas twice together. Hands down, it is our favorite place away from the ocean. The small, charming, cosmopolitan city of San Cristobal is a visual and edible feast. It has Argentine, Italian and Mexican restaurants; wine bars with good wine, bocaditos and fair prices (don’t get me started on a rant about inflated wine prices at restaurants) and great coffee bars. Surrounded by mountains and permeated by a rich, indigenous culture, there is something about the place that keeps pulling us back. We hope to be there soon. If there was Caribbean water within a couple of hours, we would probably live there and not here. (see December 2010 posts)

Real de Guadalupe, San Cristobal de las Casas, Chiapas

But, we are here – in or on (I’m never sure which is right) the island of Cozumel. Why?

It’s the water: warm, calm and clear with stunning coral reefs on the leeward side; wild and treacherous on the unspoiled, windward side. We like looking at it, being in it, being on top of it and being underneath it. There is not enough money in the world to get me to live in a humid climate (reared in Missouri, college in Florida) if there is not an ocean and ocean breezes to moderate that climate.

North lagoon, Cozumel

Artificial reef, Dzul ha, Cozumel

There are interesting people here, too. Not just the usual tropical, hard-living beach bums, but people who are artists, creative cooks/chefs, and entrepreneurs. The relaxed pace of life seems a world away from the hustle of Cancun and Playa del Carmen.

The free salsa music in the plaza on weekends, the astounding quality of the costuming and dancing at the Carnaval parties and parades, and the feeling that the island is large enough to be diverse, but small enough to feel intimate are a few more reasons why we live here.

We followed our dream. We took some chances.

In the summer of 2009, neither of us imagined that two years later we would be living on an island in the Caribbean. Many times, I have imagined I would live in an apartment in Paris or a villa in Italy, or on an island in the Caribbean, but I never believed I would.

We started a Mexican corporation and have been busy promoting our photography business. We are shooting destination weddings, family portraits, advertising jobs for resorts and restaurants, and we still contribute images to National Geographic. We have never been happier.

Family portrait session, Cozumel

So, here come the cliches: follow your dream, take risks, open your heart to love, don’t fear failure, work and play hard, and live every day as if it is your last. I used to place a saying at the bottom of my emails, but I stopped because I think everyone had seen it.

“Work like you don’t need the money, love like you’ve never been hurt and dance like nobody is watching.”

That is how we try to live everyday and it works for us.

Posted in Mexico in General, Personal Experiences, Quintana RooComments (0)

One Year in Mexico

One Year in Mexico

EIGHT THINGS WE HAVE LEARNED LIVING IN MEXICO

One year ago, Jennifer and I left the United States with a fully-loaded Toyota 4Runner and moved to Mexico.

Our first year as expats was eventful and full of surprises. Looking back, we have wonderful memories, several new friends and an enthusiasm for the future.

Jennifer had more experience with the expat life than me. She had lived in Germany and London for four years during high school, but attended international schools and never quite became an expat. My summer in a Paris apartment hardly qualified me as an expat, but I did get a taste of it and wanted more.

We have been content to rent a house on the island of Cozumel while we went about the business of setting up our photography business. We interviewed lawyers and accountants and started the process of creating a Mexican corporation, which would allow us to work here legally. While the paper work was making its way through the system, we attended language classes in Chiapas, saw some of Mexico and made new friends. One month after arriving on the island we got married. So, a big year.

Here are a few of the high points and things we have learned in the last year:

1) We loved driving here, have done it three times, and highly recommend driving as the best way to see this beautiful country. Get a Guia Roji, the best road map for Mexico, a Mexican chip for a Garmin GPS (sometimes helpful, sometimes woefully inaccurate) and plan your trip carefully. We were coming from New Mexico, so we could essentially cross the border at a number of places. We crossed early on a Sunday morning at Laredo. A quick pass through customs, then immigration, then getting our car permit and we were on the road by 8:30am, arriving in San Miguel de Allende before dinner. More than 80% of our route was on four lane roads, many of them cuotas (toll roads). A bit more expensive, but you make good time. Our second night in Fortin de las Flores, third night in Palenque (if the road to Villahermosa isn’t flooded – it was last year at this time, see the blog post of Oct. 1, 2010) and we catch the 6:00pm ferry to Cozumel on the fourth day.

We NEVER drive at night. We don’t know the roads, there might be a few vehicles on the road without lights, there are pedestrians (sometimes inebriated), animals and hundreds of topes. Plus, eight hours a day should be enough. Slow down, the journey can be as enjoyable as the destination.

You don’t want to see the room!

If, for some unseen circumstance, you don’t end up in the town where you planned to stop and it is getting dark, look for a “Love Motel”. You’ll recognize them by the fence that obscures the entire motel and the curtain or garage door that covers the parking area for each room. Created for couples who want privacy, the rooms are available for four hours or for the entire night. The secure parking for an auto full of your stuff is invaluable.

2) We lived here as locals for a six-week test run before moving. Being here as a local, going about your work, shopping at the markets and stores, arranging for cable tv, a cell phone, etc. will help you to decide if you will like living in the place where you had only previously vacationed. We made the decision to rent until our business will support us. The island is loaded with houses and condos for sale by people who bought while on vacation and then decided that the expat life was not for them.

3) When setting up a corporation, ask other expats who they have used, then interview a couple of attorneys and accountants. You will need both. If you don’t speak Spanish well, make sure your accountant and attorney are fluent in English. You don’t want miscommunications when setting up your company. Our entire process was smooth and we now shoot destination weddings, advertising photos and contribute travel photos to the National Geographic Image Collection.

Mark & Miranda on the east side of Cozumel after their wedding.

4) Learn the language!!!!! Take classes, read the newspapers, keep a dictionary close by, watch television in something other than English. Change the language settings on DVD movies and watch it in the language you are learning while using English sub-titles.

5) Travel and discover the amazing country of Mexico. Long coastlines, rugged mountain ranges, vast deserts, mysterious jungles, lush rain forests, bustling modern cities and beautiful colonial cities, are only a few of the reasons to leave your comfortable home and see Mexico. I am constantly amazed at the number of expats on my island who don’t try to speak Spanish or who have never seen any of the country.

Descending into Fortin de las Flores on the road from Puebla

6) We love: the island of Cozumel with its relaxed atmosphere, colorful Carnaval celebrations and clear Caribbean waters; small, lesser known Mayan ruins like Ek Balam and Calakmul; the architecture and sophistication of San Miguel de Allende and Guanajuato; the vast number of Reservas de las Biosferas; everything about Chiapas; tacos al pastor, Bohemia beer, Centenario tequila, sopes for breakfast, jamaica, pork any way it is cooked, Campeche camarones, warm handshakes and cheek kisses when we greet our friends; the love shown to children; salsa music; and the general love of life that permeates the country.

Dance competitions during Cozumel’s Colorful Carneval

Uxmal, Yucatan – Palacio del Gobernador

Mexico’s Bicentenario in San Miguel de Allende

Downtown San Cristobal de las Casas, Chiapas

Las Gemelas Antojitos in Cordoba – open 24 hours

7) If you are an animal lover, adopt a pet. Although don’t be surprised if one adopts you first. While more and more Mexicans have pets and are responsible pet owners, there is an overpopulation problem, due to the lack of a spay and neuter program in most places. You can practice your Spanish on the dog or cat who shows up on your doorstep.

Squirt, the bilingual cat

8) Don’t be in a hurry to get things done (mañana doesn’t mean tomorrow, it just means “not today”), don’t compare habits, rituals, government, service providers or drivers to the country you have left. Prepare yourself for a change in thinking to go with your change in address.

Fiesta of the Virgin of Guadalupe in San Cristobal, Chiapas

Let us know if you have any questions about living in Mexico!

“This guest post was written by Michael & Jennifer Lewis, Cozumel, Mexico travel and wedding photographers. Their travel blog, Latin Journeys, is mostly about their life in Mexico.”

 

Posted in Mexico in General, Personal Experiences, Quintana RooComments (4)

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