Mexico 4 year residence program with minimal requirements

[SusanSharandon]

Looks like there's a program grating 4 year temp residence in Mexico if the following reqs are met: entry before 2020, expired 6month tourist visa, some (managable) beuricratic costs and proof of rent. It's been discussed on Telegram Expat groups and confirmed by a few immigration spacialists, although I have no trustworthy contacts to vouch for this. Anybody know something about this? And assuming it's legit, is there any hidden risk associate with it? Are they just trying to attract the money spending tourists who flee the covid restrictions from the other countries? Any tax trap that one may fall into? AFAIK, residence =/= tax residence right? But at the same time spending more than 6 months here might make one a tax resident?

 

[backpacker]

entry before 2020,

We are in 2022. Anybody using this program would only have another 1 1/2 year.

expired 6month tourist visa,

This sounds like a simple program to legalize overstaying "tourists".

Are they just trying to attract the money spending tourists who flee the covid restrictions from the other countries?

A bit late for that. In most parts of the world (China being the notable exception) COVID hysteria is coming to an end.
Now Monkeypox is en vogue!

But at the same time spending more than 6 months here might make one a tax resident?

If somebody stays there under the rules you posted, he would be in the country for 2+ years. After such a long time of uninterrupted stay, tax residency is inevitable.

 

[SusanSharandon]

We are in 2022. Anybody using this program would only have another 1 1/2 year.

Sorry for not being more specific: I meant an entry before 2020 which ended, like a 1 week vacation in 2018 for instance. I don't know why this apparently random requirement.

 

[backpacker]

Sorry for not being more specific: I meant an entry before 2020 which ended, like a 1 week vacation in 2018 for instance. I don't know why this apparently random requirement.

Random, indeed.
The entire procedure appears illogical and far too convoluted for a government that intends to attract foreigners.
Add to it that on -> Temporary and Permanent Residency in Mexico a one week old article does not mention this regulation with a single word (commentators included), I would dismiss it as confused talk by a group of bored (Telegram) expats.

 

[void]

yes, this is a legit program and heavily used by mostly US/CAN immigrants, the rules are changing pretty quickly - you need an overstayed FMM card with 180 days and (right now) one visit of Mexico of any kind between 2015-2020 (I think )

technically Mexico has residence based taxation however you cannot get taxed without RFC (local tax id) and you will not get one assigned unless you really want to - there are literally hundreds of thousands of Americans, Canadians and other expats (mostly covid refugees) living all year long in Mexico and paying no taxes - avoid conducting local business and remittance of foreign income to Mexican banks and you will have zero problems - basically perpetual tourists paying local VAT and spending money

this is what every Mexican tax consultant and accountant tells you...

 

[backpacker]

you cannot get taxed without RFC (local tax id) and you will not get one assigned unless you really want to -

Things are changing fast -> Tax reform requires expats to obtain taxpayer registration by July 1

 

[SusanSharandon]

Things are changing fast -> Tax reform requires expats to obtain taxpayer registration by July 1

This is no bueno. Not sure if this is me trying to keep my rosy glasses on, but getting assigned a tax id does not necessarily mean becoming a tax resident right? Could I just get the number and then mind my own business?
Wondering if this was the plan all along with this program - luring the tourists in and then hitting them in the head with the tax reform.

 

[daxbr]

Things are changing fast -> Tax reform requires expats to obtain taxpayer registration by July 1

Obtaining RFC does not automatically oblige a resident to file and pay taxes.

 

[backpacker]

Obtaining RFC does not automatically oblige a resident to file and pay taxes.

Absolutely correct.
My reply in post #6 was focussed on this ->

you will not get one assigned unless you really want to

----------+++----------+++----------+++-----------+++----------+++-----

Could I just get the number and then mind my own business?

Sure - As long as it is in line with applicable laws.

I just wanted to make clear that even in developing nations things are getting tougher.
All these countries are in urgent need of money and it definitely shows.

 

[04372]

The Mexican government is so inefficient that unless you remit big amounts to Mexican banks they wont know what you are doing. I know of at least 50 people who have been living in Mexico for years and paying 0 taxes while there.

Just don't draw attention to yourself.

 

[void]

Things are changing fast -> Tax reform requires expats to obtain taxpayer registration by July 1

heh, yes, they are completely unpredictable - this doesn't look as a good sign but I can't imagine that all the expats living in Mexico will suddenly get taxed on their world wide income, no matter how desperately the government needs new sources of money

 

[erni]

The Mexican government is so inefficient that unless you remit big amounts to Mexican banks they wont know what you are doing.

that does not come to my suprise. In regards to taxes it must be the best legal tax haven on earth.

 

[botero]

that does not come to my suprise. In regards to taxes it must be the best legal tax haven on earth.

Mexico is in a sweet spot for certain expats in that regard. It is a trusted OECD jurisdiction with plenty of tax treaties with the developed world. Your home country won't be suspicious that you're moving there compared to the Bahamas or Panama.

Since their taxation of expats is relaxed, you're left alone as if you're in a tax haven unless you bring attention to yourself. This can be a pain for expats who want to have a local bank account (which can be necessary), buy a car, or simply spend more money to maintain a decent standard of living. In actual tax havens you can spend your money as you wish and not have to worry about being on the radar.

When I lived in Mexico, I didn't see a way to live in my situation without being on the radar. I sent and received many local and international transfers, signed up for many services, got a driver's license, bought a car, got married, had a baby, etc.

Now that Mexico will require all residents to obtain a tax ID after July, it's possible that things could change and it will be harder staying off the radar.

 

[04372]

Since their taxation of expats is relaxed, you're left alone as if you're in a tax haven unless you bring attention to yourself. This can be a pain for expats who want to have a local bank account (which can be necessary), buy a car, or simply spend more money to maintain a decent standard of living. In actual tax havens you can spend your money as you wish and not have to worry about being on the radar.

When I lived in Mexico, I didn't see a way to live in my situation without being on the radar. I sent and received many local and international transfers, signed up for many services, got a driver's license, bought a car, got married, had a baby, etc.

Now that Mexico will require all residents to obtain a tax ID after July, it's possible that things could change and it will be harder staying off the radar.

I think my comment requires some clarification.

By being 'on the radar' I meant buying million + homes when you are supposed to be 'poor'.
Owning a car, having a DL, a local bank account, etc is ok. Just don't send yourself hundreds of thousands of dollars.

On the other hand I also know people who doesnt give two shits about any of this and they just spend their money while still not paying any tax and they are doing ok.

As I said, Mexico is inefficient af so if you keep most of your affairs outside of the country it'll prolly be fine.

 

[WorldCitizen99]

Looks like there's a program grating 4 year temp residence in Mexico if the following reqs are met: entry before 2020, expired 6month tourist visa, some (managable) beuricratic costs and proof of rent. It's been discussed on Telegram Expat groups and confirmed by a few immigration spacialists, although I have no trustworthy contacts to vouch for this. Anybody know something about this? And assuming it's legit, is there any hidden risk associate with it? Are they just trying to attract the money spending tourists who flee the covid restrictions from the other countries? Any tax trap that one may fall into? AFAIK, residence =/= tax residence right? But at the same time spending more than 6 months here might make one a tax resident?

I got a 4-year temp residency using this mechanism in Dec 2021. It is called regularizacion. I think the program acronym was RNE if I remember. It only kicks in once a 180-day tourist visa expires. (So make sure you get 180 days bc they are often giving tourists less than 30 days unless they show evidence that they NEED 180 days). Then you can go to any INM immigration office in Mexico and apply. It is much easier if you use a service. I used a lady named Martha Sandoval whose office is right next to INM in Los Cabos. There is a requirement for having visited Mexico twice prior to a certain year - I can't remember if it was 2020 or 2021. I visited many times in the last 10 years so I can't recall exactly what the criteria were that made me eligible. No financial records were needed which is a huge plus! It cost approx 12,000 pesos ($600 USD) if I remember correctly. You will need to provide a Mexican address however. There are ways to get around this if you can't provide one. Ms Sandoval could probably help you with this.

 

[WorldCitizen99]

I got a 4-year temp residency using this mechanism in Dec 2021. It is called regularizacion. I think the program acronym was RNE if I remember. It only kicks in once a 180-day tourist visa expires. (So make sure you get 180 days bc they are often giving tourists less than 30 days unless they show evidence that they NEED 180 days). Then you can go to any INM immigration office in Mexico and apply. It is much easier if you use a service. I used a lady named Martha Sandoval whose office is right next to INM in Los Cabos. There is a requirement for having visited Mexico twice prior to a certain year - I can't remember if it was 2020 or 2021. I visited many times in the last 10 years so I can't recall exactly what the criteria were that made me eligible. No financial records were needed which is a huge plus! It cost approx 12,000 pesos ($600 USD) if I remember correctly. You will need to provide a Mexican address however. There are ways to get around this if you can't provide one. Ms Sandoval could probably help you with this.

Sorry - correction: INM in cabo san lucas - (down the road from los cabos)

 

[daxbr]

I got a 4-year temp residency using this mechanism in Dec 2021. It is called regularizacion. I think the program acronym was RNE if I remember. It only kicks in once a 180-day tourist visa expires. (So make sure you get 180 days bc they are often giving tourists less than 30 days unless they show evidence that they NEED 180 days). Then you can go to any INM immigration office in Mexico and apply. It is much easier if you use a service. I used a lady named Martha Sandoval whose office is right next to INM in Los Cabos. There is a requirement for having visited Mexico twice prior to a certain year - I can't remember if it was 2020 or 2021. I visited many times in the last 10 years so I can't recall exactly what the criteria were that made me eligible. No financial records were needed which is a huge plus! It cost approx 12,000 pesos ($600 USD) if I remember correctly. You will need to provide a Mexican address however. There are ways to get around this if you can't provide one. Ms Sandoval could probably help you with this.

Did you have any problems with mx banks as temp resident?

 

[WorldCitizen99]

Did you have any problems with mx banks as temp resident?

No, once I got the temp res card I was easily able to open 2 accounts in Mexico City. I chose Scotia and Santander but I'm confident you could open one with just about any bank. (There was one bank that told me they required perm res). You need to provide a utility bill with a local address but they will tell you that it can be anyone's address. A friend lent me his electricity bill. You can choose paperless option so nothing gets mailed to that address.

They'll give you a debit card and you can take out 9000 or 10,000 pesos per day depending on the bank. Use Wise to get best conversion rates from dollars to pesos then transfer to the Mexican bank and the accounts I chose have no ATM fees. You won't get a credit card right away.

My spanish expression is not bad but my comprehension is much weaker. However, at neither bank have they ever spontaneously switched to english in order to explain something so I suspect clients who do not speak spanish will be at a disadvantage. They might speak some english but their willingness to do so was low.

 

[Suzy Emerald]

Getting a bank account is indeed not difficult with a temp res. Be sure to take you passport with you. They can make a fuzz when your signature in your passport doenlsnt look the same as the one on your res. Card. Just try another branch office. Ask about minimum balance to hold, monthly fees. Bbva works pretty good with no fees and a ok app.

 

[SusanSharandon]

Turns out the 4 year temp residence program with minimal requirements is still up and running, so far so good.
Regarding bank accounts - I know this has been discussed before, but I'm always a bit paranoid- is it hassle free to receive a tiny foreign source income in a Mexican bank account? The tax is paid at source (in the country where I own a small real estate), would I have to declare it in Mexico too? Not sure why there's so little info(in English) on this online.
Also, if I show up at the Mexican bank branch with small cash regularly(I play poker), can I deposit it without being asked the source or worry about tax?
I know my questions are always severely under the average IQ of this forum, thanks everyone for accepting me here