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I moved to Mexico from Europe - Tax Optimization?

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alexx999

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Apr 7, 2023
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#1
Hello,

I'm Italian and my girlfriend has found a job here in Mexico. I will receive my 4-year temporary residency in May.

I plan to register in my home country to move my residency here. Taxes are quite high, but still better than in my country, at a rate of 35%.

I self-publish on Amazon and receive US royalties. There's a 10% withholding tax, and then a 35% taxation in this country...

Now... Most people say that no foreigners pay taxes here. They suggest that the country is "relaxed" towards expats and that they do not enforce tax laws. I think this might be true, as even lawyers here have expressed similar sentiments. They looked at me and said, "You are too used to your European country where everything is so precise and everything is done by the book. Here, nobody cares about you as long as you bring your USD or EUR into the country."

And I think that it's true because they are offering a residency permit that doesn't ask for any documents other than a passport. No criminal check, no solvency check, nothing. You just need to have an expired tourist permit and an entry into the country (even only for 1 day) from 2015-2022.

I also asked if I could travel outside the country for more than 6 months, and they said that by law I would lose my residency. But the immigration lawyer said that nobody checks or cares (is it like the old Wild West here?)

This is part of a program called "regularization," which was supposed to last during the COVID pandemic to allow tourists who couldn't return to their country to regularize their stay. Well, it's now 2024 and it's still ongoing.

However, I am a bit wary of this and I'm okay with paying taxes, especially because I guess there could be some legal loopholes, structures, or deductibles that would significantly reduce the taxable amount.

Is there any expert here who could share some insight into this situation? Should I follow the "local expert" advice? Does anyone know someone trustworthy who can give me some advice in loco? My fear is that sooner or later this situation might be revisited retroactively, which could be very bad and might lead to penalties, fines, or even criminal consequences.
 
#4
CaymanCruiser said:
My experience with LATAM countries is that you're better off just existing as a ghost rather than declaring anything to the government. Nobody declares anything so declaring something will paint a big red target on your back.
Click to expand...
I'm laughing but this is 100% true, especially if you are a foreigner. It's like you are invisible or something :rolleyes:

But OP, it's good and safe that you are trying to pay.
 
#5
alexx999 said:
Hello,

I'm Italian and my girlfriend has found a job here in Mexico. I will receive my 4-year temporary residency in May.

I plan to register in my home country to move my residency here. Taxes are quite high, but still better than in my country, at a rate of 35%.

I self-publish on Amazon and receive US royalties. There's a 10% withholding tax, and then a 35% taxation in this country...

Now... Most people say that no foreigners pay taxes here. They suggest that the country is "relaxed" towards expats and that they do not enforce tax laws. I think this might be true, as even lawyers here have expressed similar sentiments. They looked at me and said, "You are too used to your European country where everything is so precise and everything is done by the book. Here, nobody cares about you as long as you bring your USD or EUR into the country."

And I think that it's true because they are offering a residency permit that doesn't ask for any documents other than a passport. No criminal check, no solvency check, nothing. You just need to have an expired tourist permit and an entry into the country (even only for 1 day) from 2015-2022.

I also asked if I could travel outside the country for more than 6 months, and they said that by law I would lose my residency. But the immigration lawyer said that nobody checks or cares (is it like the old Wild West here?)

This is part of a program called "regularization," which was supposed to last during the COVID pandemic to allow tourists who couldn't return to their country to regularize their stay. Well, it's now 2024 and it's still ongoing.

However, I am a bit wary of this and I'm okay with paying taxes, especially because I guess there could be some legal loopholes, structures, or deductibles that would significantly reduce the taxable amount.

Is there any expert here who could share some insight into this situation? Should I follow the "local expert" advice? Does anyone know someone trustworthy who can give me some advice in loco? My fear is that sooner or later this situation might be revisited retroactively, which could be very bad and might lead to penalties, fines, or even criminal consequences.
Click to expand...

just so you know, tax data in MX is public.
That means the cartel can see it too.

up to you
 
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#12
alexx999 said:
Hello,

I'm Italian and my girlfriend has found a job here in Mexico. I will receive my 4-year temporary residency in May.

I plan to register in my home country to move my residency here. Taxes are quite high, but still better than in my country, at a rate of 35%.

I self-publish on Amazon and receive US royalties. There's a 10% withholding tax, and then a 35% taxation in this country...

Now... Most people say that no foreigners pay taxes here. They suggest that the country is "relaxed" towards expats and that they do not enforce tax laws. I think this might be true, as even lawyers here have expressed similar sentiments. They looked at me and said, "You are too used to your European country where everything is so precise and everything is done by the book. Here, nobody cares about you as long as you bring your USD or EUR into the country."

And I think that it's true because they are offering a residency permit that doesn't ask for any documents other than a passport. No criminal check, no solvency check, nothing. You just need to have an expired tourist permit and an entry into the country (even only for 1 day) from 2015-2022.

I also asked if I could travel outside the country for more than 6 months, and they said that by law I would lose my residency. But the immigration lawyer said that nobody checks or cares (is it like the old Wild West here?)

This is part of a program called "regularization," which was supposed to last during the COVID pandemic to allow tourists who couldn't return to their country to regularize their stay. Well, it's now 2024 and it's still ongoing.

However, I am a bit wary of this and I'm okay with paying taxes, especially because I guess there could be some legal loopholes, structures, or deductibles that would significantly reduce the taxable amount.

Is there any expert here who could share some insight into this situation? Should I follow the "local expert" advice? Does anyone know someone trustworthy who can give me some advice in loco? My fear is that sooner or later this situation might be revisited retroactively, which could be very bad and might lead to penalties, fines, or even criminal consequences.
Click to expand...

If you want to protect yourself in case one day the SAT changes and they try to come after you, my humble advice is don't open a bank account in Mexico. If you open a bank account, the bank will give you a CRUP (Tax ID) and that could open the door to get investigated down the line.

Right now, you are only subject to the 10% withholding, so enjoy your life!
 
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#13
Radko said:
If you want to protect yourself in case one day the SAT changes and they try to come after you, my humble advice is don't open a bank account in Mexico. If you open a bank account, the bank will give you a CRUP (Tax ID) and that could open the door to get investigated down the line.

Right now, you are only subject to the 10% withholding, so enjoy your life!
Click to expand...
Brilliant advice rooted in battle-ground experience!

PS. If you open one for whatever reason, "remain" poor in the account. I have some for a few EU countries (had them before the EU adopted the €) but I only use them for either groceries, cheap SIM-chip activation, or cheap restaurants. Nobody has ever bothered me or called me. None of those accounts have ever topped €3K per year. Same as with some Latin American countries. ;)
 
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#14
jafo said:
Brilliant advice rooted in battle-ground experience!

PS. If you open one for whatever reason, "remain" poor in the account. I have some for a few EU countries (had them before the EU adopted the €) but I only use them for either groceries, cheap SIM-chip activation, or cheap restaurants. Nobody has ever bothered me or called me. None of those accounts have ever topped €3K per year. Same as with some Latin American countries. ;)
Click to expand...

That's the way to do it!

The Tax man doesn't care about the Poor man, appearing to be living had to mount is the best tax advice anyone can follow, Lol.
 
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#15
Radko said:
If you want to protect yourself in case one day the SAT changes and they try to come after you, my humble advice is don't open a bank account in Mexico. If you open a bank account, the bank will give you a CRUP (Tax ID) and that could open the door to get investigated down the line.

Right now, you are only subject to the 10% withholding, so enjoy your life!
Click to expand...
I already have a CURP since when I was here in 2021 or 2022 I need It for the vaccine, the CURP is similar to an ID Card, I think what you meant is an "RFC", here's the extract from a website on what you can do with the CURP:

  • For registering as a natural person with the Federal Taxpayer Registry (RFC) at the SAT.
  • For registering with the IMSS and for a vaccination record (including SARS COV 2 at this stage of this pandemic).
  • For requesting a passport, military ID, driver’s license, etc.
  • For requesting your degree certificate, academic transcript, school record, etc.
  • For requesting your birth, marriage, adoption certificate, etc.
  • For job applications, personal work records, pay slips, etc.

So, having a CURP doesn't necessarily means you are "inside" the registry, the important part is the RFC, which I don't have... However, what is your advice for a bank account? I need to receive USD from Amazon so what would work? LLC + Wise or any US Bank that can be opened online or do you suggest some other solutions?
 
#16
alexx999 said:
I already have a CURP since when I was here in 2021 or 2022 I need It for the vaccine, the CURP is similar to an ID Card, I think what you meant is an "RFC", here's the extract from a website on what you can do with the CURP:

  • For registering as a natural person with the Federal Taxpayer Registry (RFC) at the SAT.
  • For registering with the IMSS and for a vaccination record (including SARS COV 2 at this stage of this pandemic).
  • For requesting a passport, military ID, driver’s license, etc.
  • For requesting your degree certificate, academic transcript, school record, etc.
  • For requesting your birth, marriage, adoption certificate, etc.
  • For job applications, personal work records, pay slips, etc.

So, having a CURP doesn't necessarily means you are "inside" the registry, the important part is the RFC, which I don't have... However, what is your advice for a bank account? I need to receive USD from Amazon so what would work? LLC + Wise or any US Bank that can be opened online or do you suggest some other solutions?
Click to expand...

Generally your RFC is associated to your CURP.
You can check if you have an RFC associated to your CURP here:

.


My humble advice is don't bring too much money into one single account. Once you have an account they can easily track your money, and as you know Mexico taxes foreign income.

If you open an account with let's say Charles Schwab, you will also get a debit card that you can use in Mexico, and all the fees that you'll be charged by the Mexican ATM machines, will be reimbursed to you by Schwab (so it's a debit card with zero fees, you can use that debit card all over the world).
 
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#17
Radko said:
If you open an account with let's say Charles Schwab, you will also get a debit card that you can use in Mexico, and all the fees that you'll be charged by the Mexican ATM machines, will be reimbursed to you by Schwab (so it's a debit card with zero fees, you can use that debit card all over the world).
Click to expand...
#Bingo!
And have a few credit cards & debit cards too, so you can rotate them. Use each for a maximum of [maximum visa-allowable stay minus 1 week], hereinafter referred to as the Casper Strategy (as in Casper the friendly ghost ;) ). To err on the side of caution, I create virtual credit cards and load the VC on Google Pay and Apple Pay to pay via NFC while adhering to & respecting the Casper Strategy ;)
To get access to Google or Apple's data, the weaker "gang members" of other countries will have to file a lawsuit in the USA and that is going to cost a pretty penny...NOT to mention that they will be exposed to discovery and NOBODY wants to be exposed in a Subpoena Duces Tecum & deposition in an adversarial & confrontational system like the one in the US. Discovery in the US has NO limits! And ALWAYS ask for a trial by jury! Can you imagine a bunch of "officials" from Latin America trying to convince a jury of Americans why they need information from a European "vacationing" in Latin America? :rolleyes: - If you just put a picture of Natalee Holloway, you win before the trial even started :cool:
 
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#18
jafo said:
#Bingo!
And have a few credit cards & debit cards too, so you can rotate them. Use each for a maximum of [maximum visa-allowable stay minus 1 week], hereinafter referred to as the Casper Strategy (as in Casper the friendly ghost ;) ). To err on the side of caution, I create virtual credit cards and load the VC on Google Pay and Apple Pay to pay via NFC while adhering to & respecting the Casper Strategy ;)
To get access to Google or Apple's data, the weaker "gang members" of other countries will have to file a lawsuit in the USA and that is going to cost a pretty penny...NOT to mention that they will be exposed to discovery and NOBODY wants to be exposed in a Subpoena Duces Tecum & deposition in an adversarial & confrontational system like the one in the US. Discovery in the US has NO limits! And ALWAYS ask for a trial by jury! Can you imagine a bunch of "officials" from Latin America trying to convince a jury of Americans why they need information from a European "vacationing" in Latin America? :rolleyes: - If you just put a picture of Natalee Holloway, you win before the trial even started :cool:
Click to expand...

Awesome!! Casper the ghost comes to the rescue!!

I'm not sure the Mexican tax authorities are checking debit and credit card transactions, I need to do some research on that.
 
#19
jafo said:
#Bingo!
And have a few credit cards & debit cards too, so you can rotate them. Use each for a maximum of [maximum visa-allowable stay minus 1 week], hereinafter referred to as the Casper Strategy (as in Casper the friendly ghost ;) ). To err on the side of caution, I create virtual credit cards and load the VC on Google Pay and Apple Pay to pay via NFC while adhering to & respecting the Casper Strategy ;)
To get access to Google or Apple's data, the weaker "gang members" of other countries will have to file a lawsuit in the USA and that is going to cost a pretty penny...NOT to mention that they will be exposed to discovery and NOBODY wants to be exposed in a Subpoena Duces Tecum & deposition in an adversarial & confrontational system like the one in the US. Discovery in the US has NO limits! And ALWAYS ask for a trial by jury! Can you imagine a bunch of "officials" from Latin America trying to convince a jury of Americans why they need information from a European "vacationing" in Latin America? :rolleyes: - If you just put a picture of Natalee Holloway, you win before the trial even started :cool:
Click to expand...
Interesting, as of now, I mainly use Wise, followed by a Wirex card and another Wise Card that is at the name of one of my family, I pretty much try to rotate them, all of them are tied to my actual residency which is still Italy, I should receive my residency in less than 1 month here, what is the advice of experts here, should I just try to move the residency of my accounts to Mexico, should I try to create bank accounts for my LLC (Which is taking forever to receive an EIN anyway)... Or what? I ll Google if it is possible to open personal bank accounts remotely in the US as a private non resident and actually receive a debit card... In Mexico Most places doesn't even have NFC Pos, most places I go to doesn't even have the POS at all so it's only cash... Might also use some cryptos since there's a P2P community here that does exchange Crypto for Cash.

I would like to register a new account on kucoin, Is it a problem to use the new Mexican KYC / data after I'll receive the residency? I plan just to play around with crypto with less than 10k probably
 
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#20
alexx999 said:
Interesting, as of now, I mainly use Wise, followed by a Wirex card and another Wise Card that is at the name of one of my family, I pretty much try to rotate them, all of them are tied to my actual residency which is still Italy, I should receive my residency in less than 1 month here, what is the advice of experts here, should I just try to move the residency of my accounts to Mexico, should I try to create bank accounts for my LLC (Which is taking forever to receive an EIN anyway)... Or what? I ll Google if it is possible to open personal bank accounts remotely in the US as a private non resident and actually receive a debit card... In Mexico Most places doesn't even have NFC Pos, most places I go to doesn't even have the POS at all so it's only cash... Might also use some cryptos since there's a P2P community here that does exchange Crypto for Cash.

I would like to register a new account on kucoin, Is it a problem to use the new Mexican KYC / data after I'll receive the residency? I plan just to play around with crypto with less than 10k probably
Click to expand...
Which country is your GF from?
 
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