How to Apply for a Temporary or Permanency Visa for Lucrative Activities
By Patricia Ann Talley, MBA, and Editor; and Agustin Galindo, Attorney at Law*
In the past, most foreigners moved to Mexico to retire. But today, there is a new generation of Expats moving to Mexico who, by using technology, can work from “home” anywhere in the world. Also, Mexico is an economically developing country and provides many new opportunities for creative entrepreneurs.
The most common visas that Expats obtain are Travel Visas (FMM), which are good for up to 180 days, and Temporary or Permanent Residency Visas. But to work, conduct business, or rent your property in Mexico, you will also need to apply for a Temporary or Permanent Residency Visa for Lucrative Activities.
Scenarios when you do not need a Visa for Lucrative Activities
Jobs in Your Home Country: Expats who have jobs back in the US or other countries and, by using technology, can work from “home” anywhere in the world, do not need a special “work” visa in Mexico.
Travel or Other Service Agents: Expats who are travel agents or who offer other services, like group and convention assistance, relocation assistance, etc., to customers back in the US or other countries and, by using technology, can work from “their office” anywhere in the world, do not need a special “work” visa in Mexico. These professionals assist their foreign customers to identify local Mexican businesses and service providers.
Owning Property in Mexico for Personal Use Only: Foreigners who want to purchase property, even in “restricted zones” (50 kilometers inland and from the borders) for their personal use only and not for rental purposes, can do so through a bank trust (“fidecomiso”), and do not need a special “work” visa in Mexico. Foreigners can also acquire property by forming a Mexican corporation and the corporation (a Mexican citizen) purchases and owns the property. Expats can own a Mexican corporation without a special visa; but in order to act as a representative, i.e., as a member of its board of directors or sole administrator, a Temporary or Permanent Residency Visa is required.
Scenarios when you need a Visa for Lucrative Activities
Job Working & Earning Pay in Mexico: To work in Mexico, you need a special “work” visa, but there are other considerations. By law, only 10% of a Mexican company’s workforce can be comprised of foreign immigrants. For example, an American Expat with a Permanent Residency Visa wanted to work as a tour guide for a Mexican friend who had a tour operator’s license and van. He obtained his Mexican chauffeur’s license, and with a job offer from his friend, he went to immigration to apply for a Permanent Visa for Lucrative Activities. He was automatically declined because his friend would have to employ 9 other Mexican workers to legally employ 1 foreign immigrant.
Operating a Business, Selling Products or Services, or Renting Your Property in Mexico: Expats need a Temporary or Permanent Residency Visa for Lucrative Activities to conduct any kind of business within Mexico – selling T-shirts, CDs, art, or any other product; operating a hotel or restaurant; providing professional services, etc.; or if you rent your property when not in use.
Process for Obtaining a Temporary or Permanent Residency Visa for Lucrative Activities
If you are a foreigner and you want to work, operate a business, sell products or services, or rent your property legally in Mexico without any problems, you need to do the following:
A. Apply for Temporary or Permanent Residency in Mexico (a green card)
You can vacation in Mexico for up to 180 days with a Tourist Visa (FMM), but if you are going to work, conduct business, or rent your property when not in use, you must apply for Temporary or Permanent Residency status (a green card). To apply, you must file an application at the nearest Mexican Consulate in your home city abroad. Once you get the authorization from the Mexican Consulate in your home country, you have 180 days to come to Mexico; and once you are here, you have 30 days to activate your Temporary or Permanent Residency at the closest Immigration Authority (Mexican Immigration Institute) office.
B. Hire an Accountant and Obtain Legal Authorization to Conduct Lucrative Activities
Mexico now requires foreign residents to obtain an “R.F.C.” number (Federal Contributor Registry) from SAT (Servicio de Administración Tibutaria), and a “Constancia de Situacion Fiscal” to conduct business legally in Mexico. You will need it to open a bank account and to obtain other services.
If you plan to work, conduct business, or rent your property when not in use, you must apply for a Temporary or Permanent Residency Visa for Lucrative Activities.
To do this, you need to hire an accountant who will help you to change your R.F.C. status at SAT (Servicio de Administración Tibutaria) and obtain your Constancia de Situatcion Fiscal. Then, you can return to the local Mexican Immigration Authority and apply for a Temporary or Permanent Residency Visa for Lucrative Activities. In addition, you may have to present supporting academic or professional documents.
The accountant will also help you obtain official tax invoices for your clients, called “facturas”, which must be issued through a Federal Digital Internet Invoice. You will also collect “facturas” for all tax-deductible expenses.
C. Pay your Taxes
The accountant will file monthly tax reports, due by the 17th of each month, and the annual tax declaration on the income generated from your business activities in Mexico. The taxes that you pay for renting your property are more complicated and we refer you to the article below.
We advise you to get legal assistance to assist you in working, conducting business, or owning property in Mexico.
*About the Authors:
Patricia Ann Talley holds a master’s degree in Strategic Marketing Planning from the University of Michigan, and a Bachelor of Science in Financial Investments & Accounting from California State University in Long Beach. A former marketing executive from Chicago, she has owned and operated businesses in Mexico for over 20 years and is a dual (American-Mexican) citizen.
Agustin Galindo is a Mexican Attorney at Law with a master’s degree in International and Comparative Law from Southern Methodist University in Texas and holds a tax degree from ITAM in Mexico City.
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