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Starting a Business in Mexico

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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 Off on Starting a Business in Mexico

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