Key Points to Consider When Planning Your Investment in Mexico
Mexico is not only a popular tourist destination but also a smart investment for foreigners looking for impressive returns on investments in real estate, opening a business, or opening a branch of an existing business. With common-sense laws designed to protect investors and an experienced legal team to support you, Mexico is also a safe investment.
What is the best way to invest in Mexico?
It depends mostly on what kind of business you are looking for, but there are two popular ways to invest your money in Mexico. The first and most common is purchasing real estate and renting the property or properties for a profit. The second and increasingly popular way is to start a business in Mexico or open a branch of an existing business in Mexico.
Real Estate Investment
Over the last decade, real estate investment in Mexico has been booming in tourist areas like Playa del Carmen and Tulum. And, it’s continued to be an excellent source of return on investment in the more established markets of Puerto Vallarta and Los Cabos. An increasing number of investors are purchasing multiple properties, taking advantage of the popularity of these locations for Mexican and international tourists and the vastly popular hosting platforms such as Airbnb.
If you are planning on purchasing multiple properties and renting them for either short term vacation rentals or long term rentals, you should consider opening a Mexican corporation. While this seems like a daunting task, it is actually quite a straight-forward process once all the necessary documentation is collected (powers of attorney and/or corporate documentation duly notarized, apostilled, and translated). Mexlaw can typically have the documents ready to sign within 3-5 days of receiving all your paperwork. Once the Mexican company is incorporated, it must be registered as a tax payer with SAT, the Mexican tax authority. The timeline for this process is completely dependent on SAT.
The benefits to establishing a corporation when owning multiple properties include:
- Being able to purchase land or properties in the restricted zones without having to set up a bank trust (fideicomiso), saving you money on the annual bank trust fees
- Complete control over your investment without restrictions of the bank trust
- No limit to the number of properties you can own
- Tax savings and benefits
- Aid in the process of obtaining residency (if desired)
Opening a Business in Mexico
Whether you are opening a new business or opening a branch of your existing business from another country, you will need to create a corporation in Mexico. Opening a corporation for your business will allow you to:
- Legally operate your business
- Open corporate bank accounts
- Hire employees
- Import and export goods and services
- Purchase property without the need of a fideicomiso
- Aid in the process of obtaining residency (if desired)
As in the case of opening a corporation for real estate investment, you will need the guidance of an experienced Mexican corporate attorney. They will help determine what type of corporation will work best for your business, including from a tax perspective.
More information
We recently posted an article with more details about creating an LLC or Corporation in Mexico. The article includes important information about how to start the incorporation process and the importance of having your documentation ready (translated, notarized, and apostilled).
Contact a Highly Experienced Team
Our team of Corporate attorneys have created hundreds of corporations for clients who have invested in real estate and opened businesses in Mexico. Over the years, we have established an efficient and effective process for helping foreigners navigate each step. If you are interested in learning more about investing and starting a business in Mexico, please contact us.