They’re drawn in by beautiful beaches, laidback living, and welcoming locals, and by more practical matters, too. Let’s take a quick look at three of the main ones; health care, residency, and taxes…
Health Care
The best facilities have first-rate technology, English-speaking doctors, and low prices. Private facilities are the best option for expats. They’re similar to what you’re used to in the U.S. or Canada.
Medical tourism is a fast-growing industry, with more Americans choosing to cross the border to seek quality, affordable health care in Mexico every year, and many Mexican doctors are trained in the U.S., Europe, or Canada and speak English fluently.
Costs here are low, typically just one-third the cost you’d pay for comparable care in the United States.
Residency
Mexico offers straightforward paths to residency, although it doesn’t offer a retiree-specific, golden, or digital nomad visa.
You can apply for temporary or permanent residency. To qualify for temporary residency, you’ll need to show that you receive $4,295 per month in income or have a minimum of $71,375 in savings.
Mexico is unique in that it allows you to jump straight to permanent residency, which is a more solid residency status. To do this, you’ll need to show that you receive $7,075 per month in income or $284,089 in savings.
Note that the exact qualifying amounts can vary from consulate to consulate.
Our Latin American correspondent Lee Harrison is a permanent resident of Mexico, and he found the process to be simple, straightforward, and fast.
All it took to get a residency visa was a single consular visit, where he was helped by an English-speaking agent. And even better, they accepted his English-language documents at the consulate with no translations.
He also didn’t need apostille certifications of his income, social security, or banking information… although if a couple applies as a family unit they will require that you apostille your marriage or birth certificate.
Best of all, there’s no lawyer required… although if you do not speak English or Spanish, you’ll need to bring a translator.
The biggest thing that stands out about Mexico is that they allow you to use savings in lieu of income when qualifying for a visa. This is great for people who have savings (like a 401k) but don’t have a formal pension.
Qualification thresholds have become high, at least for now. This is because income requirements are based on multiples of the Mexican minimum wage, which has gone up dramatically in recent years. There are plans to correct this calculation, so that thresholds are more reasonable… but no timetable as to when it will happen.
Most of the people we hear from choose to qualify with savings, using an IRA or a 401(k). Then they switch to permanent residency after four years, with no required proof of income.
No minimum stay time is required to maintain your visa. You do not need to live in Mexico to maintain residency, however you do need to be there to renew your residency if you have a residency which expires.
Of course you may not even need residency in Mexico, thanks to their liberal tourist-entry policies. You can get a 180-day stay when you enter the country, which is usually enough for a part-year resident. And if you leave Mexico during your stay, you get another 180 days when you return.
You can import your household effects duty-free as a new resident. The nearest consulate will give you the permit upon request.
Taxes
Mexico has the lowest tax burden among all OECD countries (a group of the world’s 35 wealthiest nations).
You are a tax-resident of Mexico if you have established your primary home or center of business there. Unlike most jurisdictions, they do not use time-in-country to determine tax residency.
Non-tax-residents are subject to tax on their Mexican-source income only, paying zero, 15%, or 30%, depending on your income. Capital gains for non-tax-residents are taxed at either 25% of the sale, or 30% of the gain (the highest tax bracket), whichever is less.
Tax-residents are subject to tax on their worldwide income, although much of your income may be exempt for various reasons. (For example, any income that had tax withheld is considered final, and not declared on a Mexican return.)
Also, Mexico has tax treaties with the U.S. and Canada, designed to prevent double-taxation. Otherwise, tax brackets run from zero to 35%. Capital gains for tax-residents are taxed as ordinary income.
There is no inheritance tax or wealth tax in Mexico.
Until next time,
