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AzChileheads

Dec 27, 2004, 3:38 PM

Post #1 of 19 (2223 views)

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any advice on opening a small business??

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Hola All!

I'm new here and have been reading some of the interesting posts. I have been visiting Mexico for years and intend to move to this lovely country and start a small business and would like to get any input I can from anyone who had opened a bar or resteraunt. Does anyone know about what a liquor license will cost and what kind of torture I can expect to get one?

I know I have to hire a Mexican attorney/accountant, but would like to get any advice and information I can from gringos who have done it before. We would like to open a bar in Puerto Penasco (Rocky Point) and expand later to different locations if it is a success. I'm planning a trip in the next few weeks and would like to be armed with as much info as possible. I would appreciate any input.

Thanks!

Terri Vittal

Marlene

Dec 27, 2004, 5:41 PM

Post #2 of 19 (2195 views)

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Re: [AzChileheads] any advice on opening a small business??

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Explore your area carefully and check out your target market. And bring money, lots of it. And patience.

Carol Schmidt

Dec 27, 2004, 8:42 PM

Post #3 of 19 (2162 views)

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Re: [AzChileheads] any advice on opening a small business??

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The standard advice is, if you want to make a small fortune in Mexico, bring a large fortune and open a restaurant.

You've done searches of this site on the Mexican economy and employment practices and labor law? You know that the Mexican minimum wage is a little over 50 cents an hour, and something like 40% of the population makes less than that? You know that labor laws are very much pro the employee and you have a great many laws and requirements that are very different from the States? You know that Mexican law overall is very different from the U.S? Read De Mente's "Mexican Etiquette and Ethics" for one viewpoint on understanding the psychological and cultural differences between doing business in the U.S. and Mexico.

I can't give you any advice because I haven't opened a small business here, though my partner and I did in the U.S., and I can see it's quite different here. Do lots of research, that's my only advice.

Carol Schmidt

AzChileheads

Dec 28, 2004, 7:48 AM

Post #4 of 19 (2129 views)

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Re: [Carol Schmidt] any advice on opening a small business??

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Thanks for the advice - from my research so far, I know there will be a ton of laws and was surprised how many were pro-employee, which is a good thing I suppose. I was wondering what the minimum wage was - couldn't really find it on the web.

The hubby thinks I'm a bit batty, but he's as ready for a change as I am. The area we are looking at is REALLY booming tourist-wise, 15% last year with no end in sight. The local government is hoping to make it the next Cabo and is doing a good job at it. Rocky Point is a mere 1 hour from the border at Sonoyta and closer to Phoenix than many destinations here in AZ! I've heard from American home builders there that people are selling their homes in Cabo and buying there - it's much less expensive and so much closer.

There is almost a complete lack of decent bars there - we keep looking, but have really given up. If you go out at night, it's bumper to bumper in town on the main drag. I think it will be really successful if we can navigate through the maze of laws, regulations, and customs.

Thanks,
Terri

Carron

Dec 28, 2004, 9:26 AM

Post #5 of 19 (2109 views)

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Re: [AzChileheads] any advice on opening a small business??

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Hate to discourage you, but I tend to agree with your husband.

Re-read Carol's insightful post about how to lose a fortune; and flay the skin off your back with a barbed whip as you repeat the mantra: to live in Mexico you must have income from your native country. . .to live in Mexico you must have income from your native country. . .to live in Mexico you must have income from your native country. . .

That said, I have lived in Mexico long enough to know that it is a country that fulfills the dreams of many foreigners (including myself and our family) and one never knows for sure until one tries it!!!!

Kimpatsu Hekigan

Dec 28, 2004, 2:46 PM

Post #6 of 19 (2072 views)

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Re: [AzChileheads] Getting a liquor license in Sonora is virtually impossible...

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You might want to post your question about opening a restaurant/bar on the Alamos News mailing list and on the Viva San Carlos bulletin board to get some feedback from gringo owners of food service businesses in those areas:

<http://groups.yahoo.com/group/alamosnews/>
<http://www.vivasancarlos.com/bulletin/index.html>

My general impression is that the State of Sonora will almost never grant a liquor license to a newly established business in which a non-Mexican has a greater than 50% ownership stake. Rocky Point (Puerto Peñasco) may be an exception because of the State's efforts to promote it as a tourist destination. Also, new rules under NAFTA regarding cross-border investment might make a difference, too.

Purchasing a bar/restaurant that already has an existing license to serve liquor is a different story...

Buena suerte,

-- K.H.

Before enlightenment: Chop wood, haul water.
After enlightenment: Chop wood, haul water.

AzChileheads

Dec 29, 2004, 7:58 AM

Post #7 of 19 (2017 views)

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Re: [kimpatsu_hekigan] Getting a liquor license in Sonora is virtually impossible...

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Thanks for the websites, I'll check them out.

I expected there would be roadblocks everywhere, I'll try not to drown myself in a vat of Negro Modelo just yet. Maybe just a good cry in it for now............................

I do find it odd that they would make foreign investment so difficult in such a poor country. It may be different in Puerto Penasco because there are loads of Americans there doing business. I'll let you all know what I find out. Any other input is much appreciated.

Terri

AzChileheads

Dec 29, 2004, 1:15 PM

Post #8 of 19 (1983 views)

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Re: [Carron] any advice on opening a small business??

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Carron - you wound me!!!!

I've said the mantra through my tears, but I remain hopeful (or tequila-addled, pick one). Carole's posts are always good, from what I've seen. Just how much does it cost to live there?? I've got some rich relatives I could persuade to take up dangerous hobbies.

Terri
Mexico-bound one way or another

julian3345

Dec 29, 2004, 3:08 PM

Post #9 of 19 (1971 views)

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Re: [AzChileheads] Getting a liquor license in Sonora is virtually impossible...

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You wouldn't be surprised by the seemingly illogical resistance to foreign investment by the Mexican government if you understood Mexican history a little better. Among other issues underpinning the Revolution of 1910-1920 was the vast amount of Mexican natural assets, wealth and development that was in the hands of foreigners at the turn of the last century thanks to policies perfected during the Porfiriato. At this very moment, President Fox is struggling in vain to change the article of the Mexican constitution which forbids foreign investment in the Mexican petroleum industry. There is a vast literature on this important topic. You might start with Meyers and Sherman, The Course of Mexican History.

Mexico does need massive investment by anyone with money, ideas and energy but she hasn't figured out how to manage and regulate what could be a bonanza for all concerned. Mexico also needs to invest more in her own people...in my opinion the finest asset in a country blessed with many riches. Joan

AzChileheads

Dec 29, 2004, 9:19 PM

Post #10 of 19 (1930 views)

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Re: [julian3345] Getting a liquor license in Sonora is virtually impossible...

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I'm a history buff by nature and minored in cultural anthropology in college, but I admit I wish I knew more particulars of Mexican history - I will have to read your suggestion which sounds very enjoyable.

Certainly, Mexico is not the only country with this kind of history. It is unfortunate that so many countries are still suffering from past colonial influence, not to mention present interferences. I truly love Mexico, a wonderful land filled with wonderful people and a rich and diverse culture. I hope that I can not only live there, but be of some positive influence in whatever community I settle in.

Regards,
Terri

Carol Schmidt

Dec 29, 2004, 9:50 PM

Post #11 of 19 (1928 views)

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Re: [AzChileheads] any advice on opening a small business??

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To get an FM3, which is the basic visa status for living here, you need to be able to prove $1050 US a month income, plus $500 a month per dependent, with the possibility of a discount of up to half if you own your house here.

Do a search on the many threads on the cost of living in Mexico--basically the answer depends on where in Mexico, and how do you want to live? Some 40 million Mexicans live here on less than $4.50 US a day, the minimum wage more or less depending on area, so you can indeed live here on that, if you want to live as a poor Mexican. Some 10% live on no income--you can live here eating grass. If you want to live like the richest gringos, you'd better be rich. And anything inbetween. The Mexican government obviously thinks we should have at least $1050 US a month to live here without their having to worry about our needing Mexican government support, which is insufficient even for poor Mexicans' needs.

Since Phoenix was the last place I lived before moving to Mexico, I don't think any too highly of Rocky Point, a college kids' drinking spot/tourist trap/border town that hardly represents Mexico. One of my relatives drank himself into a stupor there on spring vacation and ended up in a hospital and died, which just might influence my emotions about the town. But to each her own.

Carol Schmidt

Marlene

Dec 29, 2004, 10:09 PM

Post #12 of 19 (1924 views)

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Re: [Carol Schmidt] any advice on opening a small business??

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Quote

To get an FM3, which is the basic visa status for living here, you need to be able to prove $1050 US a month income, plus $500 a month per dependent.

You are referring to an FM-3 Rentista, for which those with sufficient income from abroad qualify, normally retirees. There are various types of FM-3's, each with it's own criteria. The requirements and paperwork are different for those studying, working or owning a business in Mexico.

For an example of some of the various categories of FM-3's see this webpage.http://www.consulmexny.org/eng/visas_fm3.htm

(This post was edited by Marlene on Dec 29, 2004, 11:05 PM)

AzChileheads

Dec 30, 2004, 4:45 PM

Post #13 of 19 (1863 views)

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Re: [Carol Schmidt] any advice on opening a small business??

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Yeah - I don't really think of Rocky Point as Mexico either, but it is such a huge tourist destination with so much growth and so close to the US, I thought it would be a good starting point.

Of course, everyone wants to be rich, but I would be happy to just have enough to live decently in a beautiful area with lots of culture. I have lived in Phoenix most of my life, and believe me, even Rocky Point is a step up at this point in time (we have recently had the doubious distinction of moving up to 4th largest city - oh happy day - I sure hope the traffic and crime continue their upward trend too).

The hubby and I have a decent income here as we are both professionals, but it would dry up moving to Mexico, which is why I wanted to start a business. I would also like the opportunity to give back to a country that has given us so much pleasure. Thanks for all the great pointers.

Terri

abq

Dec 30, 2004, 4:56 PM

Post #14 of 19 (1861 views)

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Re: [AzChileheads] any advice on opening a small business??

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I know plent of gringos making a legal living in Mexico and even more working "under the table". Almost as many as the Mexican nationals I know that are working hard earning a living in Nuevo Mexico, USA, If this is really your dream. don't give up. Many communities in Mexico are very interested in foreign investment and enterprise. Rocky Point may be one of them.

mrchuck

Dec 31, 2004, 5:26 AM

Post #15 of 19 (1822 views)

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Re: [julian3345] Getting a liquor license in Sonora is virtually impossible...

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Remember, don't forget, that Mexico NATIONALIZED all foreign owned oil companies, and all refineries, everything, and kicked out all foreigners involved in the petroleum business in 1938.
Took them over lock, stock, and barrel. No more "pinche" gringos exploiting.
Created PEMEX to do the deeds instead.
Yes, 1938. An this is spoken daily in Houston ,Texas by all the USA oil companies involved.
This was a HUGE loss then to the USA. It has never been forgotten and will never be repeated, by US oil companies again, ever.
PEMEX is in deep doo doo now needing new eqpt, upgrades, but it falls on deaf ears in Houston.
Mexico knows this also.
Today, Mexico desperately needs investment in all sorts of things.
But it will never again release the reins of control to foreigners. Period.
Mexico may be slow, but it will be theirs.
Saludos, mc

Ed and Fran

Dec 31, 2004, 6:37 AM

Post #16 of 19 (1813 views)

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Re: [mrchuck] Getting a liquor license in Sonora is virtually impossible...

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"It has never been forgotten and will never be repeated, by US oil companies again, ever. PEMEX is in deep doo doo now needing new eqpt, upgrades, but it falls on deaf ears in Houston. "

It won't be repeated, not because the oil companies wouldn't love to get involved down here, but because the government won't allow it.

Pemex owns half of the Shell Deer Park Refinery in Houston. Going into such a deal with Pemex is hardly the reaction of a foreign oil company that has never forgotten.

Pemex may be in "deep doo doo", but it's not because they're not extremely profitable. It's because the government relies on Pemex revenues to fund a huge part of the national budget, and allocates less than the amount Pememx requests for expansion and modernization.

The foreign oil companies brought on the nationalization themselves through their high handed manner of dealing with the government.

But we've digressed a bit from the original thread.

Regards

E&F

mrchuck

Jan 1, 2005, 6:30 AM

Post #17 of 19 (1754 views)

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Re: [Ed and Fran] Getting a liquor license in Sonora is virtually impossible...

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You seem very knowledgable about this. PEMEX has alreay contacted the USA oil companies for help in developing their off-shore reserves out in the Gulf of Mexico.
All these USA oil companies have said "Nope, no thanks". Their reasoning was exactly what happened in the year 1938 "take away". The USA was thrown out, and lost ALL of their investments. PERIOD.
I whole heartedly agree with you that PEMEX has too much influence, but it is, and will always be the "cash cow" for the Republic's Government.
Unfortunately, as Pemex's refineries are in extremely sad shape, and needing billions of dollars spent for maint. and upgrading, this money is not allocated for this. Nor has the money been planned or allocated for the discovery and development of the new fields they say they have.
They again, want total foreign capital investment for this huge expense, without allowing these "investors" any perks. This is the true "mexican stand-off"!
And it will stay this way until something happens within the governing body, maybe soon, maybe far away.
Saludos,,, mc

esperanza

Jan 1, 2005, 6:40 AM

Post #18 of 19 (1752 views)

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Re: [mrchuck] Getting a liquor license in Sonora is virtually impossible...

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Pemex is not the only cash cow left in Mexico. The other is the CFE.

http://www.mexicocooks.typepad.com

julian3345

Jan 8, 2005, 4:02 PM

Post #19 of 19 (1617 views)

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Re: [esperanza] Getting a liquor license in Sonora is virtually impossible...

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And don't forget the callous, quasi- forced, exportation of their own people for that huge cash cow --remesa...usually the second or third item on the Mexican income ledger following PEMEX and tourism. Joan