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Baja13

Dec 7, 2016, 12:33 AM

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Working for yourself

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I was wondering if anybody has worked for themselves as an independent contractor in Mexico. I'm considering managing a few properties and know I must register with SAT to pay federal taxes. Also, I'm assuming I will have to apply for a local business license. Am I missing anything?



sparks


Dec 7, 2016, 1:10 AM

Post #2 of 14 (10329 views)

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Re: [Baja13] Working for yourself

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Check with your accountant about employees and Seguro unless you are going to do maintenance yourself

Sparks Mexico Blog - Sparks Costalegre


YucaLandia


Dec 7, 2016, 6:31 AM

Post #3 of 14 (10305 views)

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Re: [Baja13] Working for yourself

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Side questions: Would you just be a manager, or would you own the properties?


I ask, because property management here in Yucatan has been notoriously low paying ... as owners here want to pay just 10%.

Since the peso weakened by 55% (dropping from 13:1 now at 20:1) getting just 10% of very weak-peso denominated low rents & low cost repairs, it's very tough to make any decent $$ as a property manager here (in Yucatan), especially if you NOB bills or a NOB lifestyle.

Our rents here have not kept pace (at all) with the 55% loss in MXN peso values.

~

~ Alternately, if you are planning on buying rental properties, this might be a great time to buy Mexican rentals, because MXN denominated property prices have not much reacted to the MXN peso's falling values.

??

If you are buying properties, there's a whole bunch of other issues (related to good/bad Notarios, SAT~Hacienda, Catastral, etc) worth knowing about.


Happy Trails,
steve
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Read-on MacDuff
E-visit at http://yucalandia.com


YucaLandia


Dec 7, 2016, 6:36 AM

Post #4 of 14 (10304 views)

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Re: [YucaLandia] Working for yourself

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Implied in my post above:

Are these effects just Yucatan-specific, or are they nationwide:

Implied questions for other parts of Mexico:

~ How are Property Management fees determined in other parts of Mexico? (10% ... 15% ... or flat fee?)

~ How have rents changed in your area since the MXN peso weakened from 13 :1 ... to the current 20.5 : 1 ?

~ How have property purchase prices changed in your area since the MXN peso weakened from 13 :1 ... to the current 20.5 : 1 ?


~ Are there 2 tiered pricing ... w/higher prices for gringos ?

.
and no, I don't think these questions are hijacking the thread, but instead may offer the OP some good insights on how to operate his planned business.
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Happy Trails,
steve
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Read-on MacDuff
E-visit at http://yucalandia.com


playaboy

Dec 7, 2016, 7:08 AM

Post #5 of 14 (10298 views)

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Re: [YucaLandia] Working for yourself

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Most of your questions don't apply. You are working under some false assumptions.

What if Baja13 originally came from Venezuela? Would you be relating his financial life, and pesos to bolivars, negatively? Not at all.

You can't relate these things to USD's. You are in MX.


YucaLandia


Dec 7, 2016, 1:15 PM

Post #6 of 14 (10266 views)

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Re: [playaboy] Working for yourself

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Good points.

My US/NOB bias is showing.

If he is from Venezuela, Mexico would appear to be an island of great stability.

Happy Holidays,
steve
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Read-on MacDuff
E-visit at http://yucalandia.com


Baja13

Dec 9, 2016, 9:39 AM

Post #7 of 14 (10199 views)

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Re: [YucaLandia] Working for yourself

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Thanks for the responses! I'm from the U.S., so no Bolivares for me! I live in Los Cabos, and most everything here pertaining to real estate is in USD here. I'm just trying to get some advice to working independently. My biggest concern is hiring a maid or maintenance people on sporadic occasions. I don't know if they would be considered an employee in this case. I'm only looking to manage a few properties, just something to do to keep busy and wonder if setting up an official business is necessary. I know I'm liable to pay taxes to SAT or the Hacienda and know about IVA taxes and getting a local business license.


sparks


Dec 9, 2016, 10:29 AM

Post #8 of 14 (10194 views)

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Re: [Baja13] Working for yourself

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You should have a working Visa and anyone working for you requires Seguro Guess you could work in the shadows but I could lead to problems. Talk to a lawyer/accountant

Sparks Mexico Blog - Sparks Costalegre


rvgringo

Dec 9, 2016, 10:29 AM

Post #9 of 14 (10193 views)

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Re: [Baja13] Working for yourself

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Yes, you will need to do all of those things, and you will need a Residente Permanente Visa, or Temporal with a Lucrativa endorsement to work, RFC, CURP, etc. If you hire people for more than a casual one-time task, they may be considered an employee, with rights to IMSS and all the other employer‘s obligations. You will also need an accountant to handle your tax payments and bookkeeping, etc. You will also have to be able to issue electronic facturas for payments received. Will it be worth it for just a few properties?


Baja13

Dec 9, 2016, 12:09 PM

Post #10 of 14 (10184 views)

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Re: [rvgringo] Working for yourself

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I'm a permanent resident with a CURP and an RFC. I do have an appointment with a lawyer on Tuesday. The biggest concern for me would contracting people out and who is considered an employee under the law.


sparks


Dec 9, 2016, 2:47 PM

Post #11 of 14 (10177 views)

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Re: [Baja13] Working for yourself

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According to our lawyer anyone that works for you is an employee. For the guys doing the house building we had to go 4+ hours north to Vallarta to sign them up for Seguro. Lawyer went with.

We're taking a chance with the roof with two large crews coming in. They both are in and out in one day.

The lawyer will give you the scoop

Sparks Mexico Blog - Sparks Costalegre


minga

Dec 18, 2016, 6:54 PM

Post #12 of 14 (10052 views)

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Re: [Baja13] Working for yourself

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If you didn't want the hassle of employees, seguro for them, Xmas bonus, vacation pay and termination pay if you don't want them to work for you anymore, you could consider this option if it exists in your area. Instead of hiring a maid and a gardener privately, use a cleaning service and a gardening service which has their own employees. Then they are the contractors who are responsible for those employees, not you. Might be a little more expensive than private hiring, but probably not in the long run considering you wouldn't have those extra expenses and paperwork.

You would need to check them out to make sure they are indeed a registered business, with business license, RFC, SAT inscription, etc. and get in writing that you would not be expected to pay all those things you need to with an employee. And if they are a legitimate business, they would also be able to issue you official facturas which you could use as a business deduction.


Baja13

Dec 20, 2016, 12:37 PM

Post #13 of 14 (9987 views)

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Re: [minga] Working for yourself

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Very good advice, Minga! Thanks!


minga

Dec 25, 2016, 9:56 PM

Post #14 of 14 (9905 views)

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Re: [sparks] Working for yourself

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That is not exactly correct, Sparks. If, for instance, you hire a building contractor who comes with his own crew, he is the contractor and is responsible for paying Seguro, finiquito, etc, for his employees. You pay him weekly, or whatever you have agreed upon, and he in turn pays his crew. Of course, he would build the seguro, finiquito, etc into the price he quotes you, but you are not specifically and personally responsible for getting seguro, etc. for him or his crew.

If you instead just hire a bunch of guys to build for you, as I did, and you are instructing them as to what you want and how you want it done, then yes, they are your employees and you are responsible for all of these payments.

Same with maid service. If you hire a woman to clean for you, she is your employee and you are responsible for those payments. But if you use a cleaning service, which sends someone out from their stable of workers, those workers are their employees, not yours.
 
 
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