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karla659

Oct 23, 2003, 11:13 AM

Post #1 of 21 (1566 views)

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Starting a business in Mexico

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Greetings amigos:

I would like to start an active tour business in Mexico. Does anyone have wisdom from their own experience of starting a tour business in Mexico to share? Also, does anyone know any good attorneys specializing in business incorporation and immigration in Mexico City?

Thank you.

Judith

Esteban

Oct 23, 2003, 4:25 PM

Post #2 of 21 (1530 views)

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Re: [karla659] Starting a business in Mexico

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I don't know about other cities but Mazatlan has a special city agency that will help you start your own business. First, you have to have an FM-3 then you go down to the city agency and they guide you through the hoops. They've made it very easy for foreigners to obtain a business license and to obtain the necessary migracion paperwork to be legal.

Carianna

Oct 26, 2003, 1:46 PM

Post #3 of 21 (1468 views)

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Re: [Esteban] Starting a business in Mexico

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They now have special business notarios in Mexico that can get the paperwork pushed through a whole lot faster on things like setting up a Mexican corporation -- which is what you have to do to establish a business. You'll have the fees to the notario the size of which will depend on how crooked things are where you are settling. (Where I live on Cozumel island, for example, all three of the island's notarios are under indictment at the mo' and the only half-way decent one of the bunch has been known to take 7 months to do simple work if you don't pay him a lot extra.) So you've got your notario fees and then there's a fee to the government to be registered as a foreign corporation. I believe that's $8000 pesos. Then you have your bookkeeper to pay.

Carey on Cozumel

www.cozumelmycozumel.com

Esteban

Oct 26, 2003, 2:00 PM

Post #4 of 21 (1465 views)

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Re: [Carianna] Starting a business in Mexico

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I don't believe you have to have a corporation to open a small business in Mexico. I'd like to see the documentation you have to prove that point. You can actually start a small business without the help of anyone if you know the ropes. You do indeed have to have an accountant to provide the necessary tax documents. Here in Mazatlan, I personally know of people who have small business' without corporate status.

Carianna

Oct 26, 2003, 2:20 PM

Post #5 of 21 (1458 views)

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Re: [Esteban] Starting a business in Mexico

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Well, I probably stand corrected. I assumed you needed corporation status for a business because how else are you going to do stuff like pay taxes and the segura on your employees. But perhaps there's some intermediate step I don't know about. Can someone enlighten us? I believe my information re setting up a corporation is pretty much on the mark, however, as I just investigated this in depth and recently.Let's see what someone more expert than I has to say. I'll be interested in hearing the true scoop.

Carianna on Cozumel

Esteban

Oct 26, 2003, 3:03 PM

Post #6 of 21 (1453 views)

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Re: [Carianna] Starting a business in Mexico

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Paying taxes is a matter of getting a tax ID number.

Nothing complicated. Paying employees is a matter of going to the Seguros de Social and setting up an account. When you remodel a home, you do the same thing. You don't even need a business license to hire an employee.
You do need a licensed accountant to file your, I believe, quarterly income taxes.

You don't have to incorporate to do those things. Go to http://www.freemaz.com ...the community forum there has banners from local business' that are not corporations and are entirely legal. Maz helpin Hand is a business that will walk you through the small business start up process if you don't speak Spanish.

jennifer rose

Oct 26, 2003, 3:37 PM

Post #7 of 21 (1444 views)

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Re: [Esteban] Starting a business in Mexico

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Esteban's right -- one does not need a corporate identity to do business in Mexico.

But, for fairly simple operations, even small businesses, with a set of books, the staff at Hacienda has what amounts to a taxpayer assistance program, and their staff will help taxpayers prepare their returns, penciling in the numbers on the tax forms for the taxpayer to type in and take to the bank for payment.

gpk

Oct 26, 2003, 3:46 PM

Post #8 of 21 (1440 views)

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Re: [jennifer rose] Starting a business in Mexico

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All correct. Also, ALL notarios in ALL states are not "crooked"--I happen to work for a very honest and concerned notario who takes very good care of his client's needs--not his own needs. Personally, as a non-Mexican, I would incorporate ANY business if I had Mexican employees--Mexican labor law is a killer.

Carianna

Oct 26, 2003, 5:16 PM

Post #9 of 21 (1430 views)

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Re: [gpk] Starting a business in Mexico

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I didn't say or in any way infer that all notarios are crooked. How could that possibly be? But it is a matter of public record that, right now, all three notarios on the island of Cozumel are being investigated. And it is also a fact that it is slow and very difficult to get anything done here that requires a notario's official seal of approval. Something that used to take weeks currently can take more than 6 months. And the fees are far higher than I have read are the average in some other parts of Mexico.

This is interesting information about forming a business in Mexico as a foreigner and not having to go the corporation route. So the set up is somewhat similar to how it is in the US? You can form, for example, a sole-proprietorship where you file something similar to a Schedule C tax form? Have I got that right? And, if so, what is the Spanish term for this type of foreign-owned business.

Thanks very much for the help.

Carianna

karla659

Oct 27, 2003, 9:44 AM

Post #10 of 21 (1381 views)

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Re: [gpk] Starting a business in Mexico

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GPK

Can you elaborate a bit on why Mexican labor law is such a killer? One would think that the process of hiring Mexicans would be liberalized so as to faciliatate higher employment.

Karla

jennifer rose

Oct 27, 2003, 10:48 AM

Post #11 of 21 (1377 views)

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Re: [karla659] Starting a business in Mexico

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Hiring is just the starting point, but there's much more to the federal labor law than simply hiring an employee. Read the Ley Federal del Trabajo at http://www.cddhcu.gob.mx/leyinfo/pdf/125.pdf so that you can familiarize yourself with the protections afforded workers.

gpk

Oct 27, 2003, 3:59 PM

Post #12 of 21 (1344 views)

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Re: [jennifer rose] Starting a business in Mexico

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Yes, hiring is easy. Firing is another matter, and unfortunately there are "workers" who make their living filing fraudulent labor claims against their employers. These cases must be defended--a client of the notario I work with almost lost his house to fraud. Also, many other aspects of the labor relationship are controlled by law.

Rolly

Oct 27, 2003, 6:47 PM

Post #13 of 21 (1323 views)

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Re: [gpk] Starting a business in Mexico

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Indeed, firing an employee can be a big problem. We were told by several construction folks (architects and contractors) that one should always find a way to get rid of an unwanted worker without firing him.

But even a voluntary departure can be a headache. On my previous building project, a worker, who had been with us for a good while, quit. We knew we owed him some severance, but he demanded an outrageous amount. We ended up with a lawyer who specialized in labor matters who worked out a compromise. Our ex-worker signed an agreement accepting the offer as his final and complete settlement. But it wasn't over. A couple of weeks later, he reneged on the deal and went back to the same lawyer and got the matter re-opened. We ended up having to give him some more money to settle the matter. This time the settlement seems to have stuck.

Dealing with the social security office is a monthly pain, but it is tolerable. At least until you want to go out of business, or in our case, to close out a building project. That turned into an awful can of worms. It was truly one of those "welcome to Mexico" experiences.

Rolly Pirate

E-visit me http://Rollybrook.com
On Facebook as Rolly Brook

Marlene

Oct 30, 2003, 10:02 PM

Post #14 of 21 (1236 views)

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Re: [Rolly] Starting a business in Mexico

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Oh boy Rolly, that is SO true. Firing someone here is VERY difficult. Employees, like tenants, have all the rights it seems and they know all the angles. Recently I came across a case where a foreign restaurant owner caught two of his employees red handedly ripping him off. He had to enlist the services of a lawyer to get them out the door, but not without a nice settlement. (Hello?? - They should be paying him back!!) He has no idea how long it has gone on so has no idea what this has cost him. He does know that his trust in people has diminished. It is sad, but that is the way it seems to be. Much like Spain I suppose...Workers have all the rights. Poor guy trying to sign the paychecks and wondering why there is no money is at a loss, so to speak. As long as new foreign business owners are aware of the pitfalls, and put lots of effort into "people management" things should go okay.

karla659

Oct 31, 2003, 9:54 AM

Post #15 of 21 (1206 views)

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Re: [Mazatleca] Starting a business in Mexico

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Certainly there are instances of workers who steal, blackmail, lie, etc. but going so far as to say "workers have all the rights, they know all the angles," sounds a bit over the top, especially with regard to a country as economically stratified as Mexico.

alex .

Oct 31, 2003, 1:02 PM

Post #16 of 21 (1182 views)

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from what vantage point are you speaking?

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The tendency to take advantage is the common denominator among the strata, not the differentiator.
Alex

karla659

Oct 31, 2003, 1:28 PM

Post #17 of 21 (1178 views)

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Re: [alex .] from what vantage point are you speaking?

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Alex, Point well taken. Thank you. Karla

Jay

Nov 30, 2003, 9:52 PM

Post #18 of 21 (1070 views)

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Re: [karla659] from what vantage point are you speaking?

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WOW!

You guys all have these "horror" sounds stories...

Im glad the business im in doesn't involve employees, or these legal battles over people quitting.

Carron

Dec 2, 2003, 9:16 AM

Post #19 of 21 (1033 views)

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Re: [Jay] from what vantage point are you speaking?

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We would love to hear about your own experiences in Mexico. If you haven't had the problems, how have you avoided them? This is important to those of us who already live here and those of us who plan to come down. Many of us are experienced in self-employment in other countries and would like to improve our understanding of how this functions south of the border! You seem willing to share your expertise and we all appreciate it. Thanks for your time to respond in more detail.

Uncle Donnie

Dec 3, 2003, 3:59 PM

Post #20 of 21 (978 views)

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Re: [Carron] from what vantage point are you speaking?

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Karla,

You might want to check with the local tourism authorities to determine what qualifications you personally need in order to lead tours (if that's your intention). I belive that there may be a national requirement that licensed tour guides be tri-lingual, pass a supervised multi-subject examination, and then be approved by SECTUR and SETUJAL.

A friend recently fulfilled reqirements for her credential.

The testing included Mexican history and culture, English and French languge skills, and first aid.

You may have a different business model in mind, but this could be food for thought.

Good luck, whatever you plan to do.

Shameless self-promotion:
http://www.headformexico.com

Madam ZZ

Dec 4, 2003, 6:52 AM

Post #21 of 21 (950 views)

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Re: [Esteban] Starting a business in Mexico

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Based on what my lawyer in Cancun says, incorporating and getting a related FM3 does not mean YOU can work. It means you can collect receipts and take them to the accountant twice a month. Unless, for each position, you can show that no Mexican in the area can do it, you will not be permitted to perform the service. One of my corporation's goals is staring a baby sitting service in an area with a lot of beach bars and dive sites. I will provide the women specially-tailored ESL classes, Red Cross training and our own curriculum. But first, I bought more house than I planned for, so I have a maid and a house rehabilitator couple who I have known for years. I am getting both seguro. They are not married because he has no papers And although he has been an independent contractor without papers for 20 years, I will dye my hair temporarily and take him to Chiapas (where he dropped out of sight because his brothers are politicos) and get his birth certificate so I don't have an illegal worker as a gringa. My lawyer said my going would be less obvious than arrival with a Cancun lawyer as far as his brothers are concerned. Then the B&B lodging license, then the baby sitting and other services. I cannot lift a finger.I am even hiring a British born Mexican citizen to help with my allowed responsibilties.