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Working in Mexico
This question is asked over and over. The answer is always; "It is difficult,
but not impossible." The first thing you must know is that it is illegal unless
you have received your FM-3 by using a letter from a prospective employer
stating why and for what exact job he wants to hire you. Many of the timeshare
companies hire gringos (a slightly derogative reference to any non-Mexican
from north of the border) and take care of all the FM-3 details for them. Other
employers often hire, but usually just give you the letter and expect you to get
the FM-3--it costs about $120 U.S. Even if you're married to a Mexican citizen
you must have the FM-3 with the proper permission to work for him or her.
The timeshare sales are the easiest route, but not many people work long in
that business--it's very high pressure.
Forming your own corporation in Mexico under a tourist permit (FM-T) is
possible, but unless you get the properly documented FM-3 you will not be
able to receive any pay except for bonuses or dividends or be able to work at
the location of the business. The corporation must hire either Mexican
employees or properly documented (FM-3 stating that they are allowed to
work for your corporation in a specific capacity) foreigners.
You can be self-employed by getting an FM-3 using a letter from you to the
Immigration Dept. (Instituto Mexicano de la Migración), requesting permis-
sion by stating the name, address, and the activities of the business (e.g., book-
store, restaurant, etc.) and your position in that business. Then you must apply
at Hacienda (The Mexican tax folks) for a tax number (R.F.C.) and a Mexican
Social Security number (C.U.R.P.)--lots of paperwork, but no cost for the
Hacienda part of things. A number of people have become self-employed by
purchasing a large home and renting apartments or converting it to a Bed and
Breakfast operation. In any case you have an obligation to pay the 15% Value
Added Tax (IVA), the 35% income tax, and the various withholding and other
taxes for your employees, e.g., maids. A good accountant is absolutely neces-
sary as he will keep you legal--and usually get you off for considerably less
than the 35%.
I know of some people that don't bother to tell the Mexican government of
their venture, but they are risking both seizures of their assets and deportation.
Many U.S. citizens don't report their Mexican income to the U.S. Internal
Revenue Service (they're supposed to, by U.S. law), as they consider that the
IRS has more important matters to consider and won't know anyway.
Whether you're self-employed or forming a corporation there are some
businesses foreigners aren't allowed to be in. It's best to hire an accountant
before you start the process as he can help you get through the paperwork and
M a z a t l a n I S P a r a d i s e