Mexico Is Tightening Supervision of Foreigners’ Visas and Local Income

Several people have sent me a link to the recent Yucalandia article about how Mexico is tightening supervision of foreigners’ visas and local income.

Nothing in this article is new or a surprise to me. It just says what I’ve been saying since I first came to Mexico — the old timers need to get with the times and the new timers need to learn the new rules and stop relying on and trusting old advice. Mexico is modernising at a rapid pace and keeps better records that can be accessed from anywhere in the country thanks to new computer databases. Foreigners need to stop treating Mexico like their playground and start treating it with respect.

In particular, this article deals with how many foreigners/expats are cheating the tax system by not declaring their income in Mexico. Read the article for more all the details.

I’m not sure why people keep feeling a need to send me this link. Maybe because I’ve talked a few times about starting an Airbnb business here? Well, let me reassure you all that after years of not being able to follow Canadian laws (while still doing the very best to fulfil my tax obligations), I am super happy to be in a country where I can live the life I want and I have every intention of complying with the laws to the best of my ability. That means no Airbnb business until I gain “lucrativo” status, which would allow me to start a business here and earn income. I am going to ask at residente temporal visa renewal time if that would be possible or, worst case, I’ll wait until I’m granted permanent residency, at which point I’ll automatically get the right to work and earn money in Mexico.

But wait, some of you say. Aren’t you working in Mexico? Technically yes.

I don’t like to talk about financial matters in great details because everyone’s situation is so different, but I will say that there is no question at all that I am complying with Mexican law at this time. In Mexico’s eyes, I am not working in Mexico. I am physically in Mexico, yes, but doing work for a Canadian company for non-Mexican clients. All my money comes from outside of Mexico and only comes to Mexico after first going through US and Canadian banks. For them, my job is just like retirement income. I fully declared what I do to get my money and all my documents were examined at the consulate in Montreal and accepted. When I came here, I put on my paperwork that I’m a freelance transcriptionist and both the immigration offices in Progreso and Mexico City accepted that as well.

It is an inevitability that I will eventually start a company here since doing so would reduce my tax burden in Canada. I just need to let my immigration status settle a little and do a bit more research about how to do what I want to do. I will consult with a lawyer and accountant when that time comes.