Mexico Frequently Asked Questions

Where is Mexico?

Most of us know the answer to this question since Mexico borders the United States touching California, Arizona, New Mexico and Texas. But did you also know that Mexico abuts Guatemala and Belize? Filled with the cultural influences of many Indian tribes, the southern part of the nation is also the historical home of the fascinating Maya civilization. Covering 769,000 square miles, considerably larger than the state of Texas, the country has a population of 103 million people -- Mexico City alone is thriving at 22 million. With extensive seaside on both the Pacific and the Gulf of Mexico. The country also embraces the Gulf of California which shelters a large number of islands mostly unpopulated and renown as homes for native flora and fauna. Moving south, you’ll find more islands off the fast developing Costa Maya fronting the Caribbean. Click here for a map.

How do I get to Mexico?

Your choices are many including the locally operated airlines of Mexicana and Aero Mexico. Or you can chose from American, United or Continental. Depending on your destination -- for instance, Mexico City, Cabo San Lucas, Puerta Vallerta, Cancun, Acapulco -- most major US cities offer direct air options. Cruise ship activity is so prolific that space prohibits listing all their schedules. The US West Coast hosts weekly, or longer, trips to the Baja Peninsula continuing on to the Mexican Riviera often including Acapulco ... as well, you’ll find numerous Caribbean cruises calling on Cozumel, Cancun and, lately, the Costa Maya.

Is the Mexican government stable?

Most definitely. Vincente Fox, elected in July 2000 for a six year term, has proved to be forward thinking, a friend of the United States, and an effective activist in terms of Mexico’s economy. Democratically elected, the President is a leader of a Federal Republic and a bicameral Congress. Under President Fox’s watch, Mexico has become a member of NAFTA (North American Free Trade Agreement) and EU FTA, a trade arrangement with the European Union guaranteeing that foreign tariffs will be reduced to zero by 2007. Their major trading partners are the USA, Canada, UK, Japan and, of course the EU. The country’s 2003 GDP/GNP for 2003 was about $601 billion, up 1.3% from 2002. The annual growth estimate for 2004 is 3% to 3.5%.

What is the currency of choice?

The Mexican Peso (100 cents = 1 Peso) is trading, as this is written, at 11.57 pesos per dollar. Fluctuations against the US dollar are common but generally range between 9 to 12 Mexican pesos per $1.00. Given the country’s steady economic progress over the past few years, it’s surprising that the minimum daily wage is only $3.89 (using today’s exchange rate) making Mexico particularly attractive for business ventures, retirement, vacation, and real estate investment. The government aggressively courts the tourist trade which means that all but isolated villages accept the US dollar along with most credit cards. Traveling with low denomination US bills ($1 and $5) is a good idea for use as tips and smaller purchases.

Do I need an adapter for electrical appliances?

The more sophisticated urban and resort centers like Acapulco, Cancun, Puerto Vallerta, Cabo and Cozumel provide both 110 and 220 volt electricity for their international visitors. If you’re in doubt, be certain to check with your tour operator who can best advise you. Whenever you’re traveling in a foreign country with delicate electronics, e.g., laptop computer, you may want to include a surge protector in your luggage.

What are the visa requirements for visiting Mexico?

The Mexican Tourist permit is known as the “FMT” and is easily obtainable either on your airline flight, or at your point of entry. You are allowed to remain for 90 days with your permit renewable for a maximum of 180 days.

Longer term business people, and extended time travelers, may qualify for a Visitors Permit which can be issued for up to one year. These are renewable four times, each with a maximum of one year, for a grand total of five years, but are not easily obtained unless a company or organization is willing to vouchsafe your presence.

What are the residency laws?

If you desire permanent residency, depending on your status, your best bet is an Immigration Permit which is good for up to a year. Qualifying for this means that you can renew your permit for up to one year (after the initial year) for a maximum of five. After spending five years in Mexico, you automatically receive resident status with the same rights as a national citizen, except the right to vote.

Once your five year mark passes you’ll be automatically given a document called a FM2 which looks very much like a Mexican passport. You’ll be able to hold on to your US or Canadian passport for traveling abroad as often as you like ... however, you’ll be able to cross Mexican borders just like a Mexican National.

Depending on what your interests are, the following possibilities are offered for your consideration. Any one of them makes you eligible for a Immigration Permit.

*** Retire to your newly adopted country, assuming you are over 50, don’t intend to work in Mexico, and are receiving funds from abroad (pension, other investments, or have some kind of fixed income), you can apply for a permit. You’ll need to prove an income of at least 400 times the minimum daily wage. At $3.89 per day, that amounts to a smidgen over $1500 per month ...

*** Invest in Mexico and it’s future, concentrating on industry or services. You’ll need to plan on spending capital equivalent to 40,000 times the daily wage in Mexico City where salaries are higher. We’re talking about an investment of at least $175,000 ...

*** If you’re a scientist or technician, either commercially or for education, you may be qualified for a Immigration Permit ...

*** If you’re an artist, or qualified sportsman, you may be considered for a permit. Each case is judged individually by the Ministry of the Interior ...

*** Or you can own a second home for vacation purposes only, forget all about the immigration process, and use the tourist permit supplied by your airline ...

Can a foreigner purchase property?

Here is one of the greatest misconceptions perpetuated abroad -- people are told they can’t own property in Mexico, or if they do, it will be a convoluted process with the danger of property confiscation by the government. The short answer to this negative publicity is no. Is acquiring property in Mexico easy? No to that too. But pay attention to the laws and rules, hire competent people to assist you, and you’ll be rewarded by a process that will not only run smoothly but will be relatively pain free ... just like any where else in the world.

Buying property in Mexico -- be it for retirement, personal vacation usage, rental profits, or as a straight out investment -- compares favorably with US and European prices, carries lower taxes, and offers less costly maintenance. But you’ll need to consider how you’ll finance your new acquisition. Mexico is still virgin territory when it comes to obtaining a mortgage. You’ll find them not easily available at considerably higher prices than in the US. Plus you’ll be expected to make a down payment of 30 to 40% when using a Mexican source for financing.

Many foreigners get around this stumbling block by taking out an equity loan on their current home, or researching one of the few US banks that offers mortgages in Mexico. Expect a slightly higher interest rate than you’re used to. Others use rentals on either their new home, or existing home, to finance their Mexican venture. And others sell their US property outright using the profits to finance their new lives.

Now for the nitty gritty on property ownership under Mexican law. Simply put, there are two ways to go -- either purchase outside of 100 kilometers from Mexico’s borders, or outside 50 kilometers from her coastline. Or purchase within these zones using a “fidei comiso,” a bank trust which holds the deed to your property.

There used to be a law under the Mexican Constitution banning foreigners from buying property within the restricted zones. The government realized the law was contrary to their financial development so they created a system of land trusts enabling foreigners to purchase within the restricted zones.

So while the bank trust holds the deed to your property, you, and whomever else you name, are listed as the sole beneficiaries which gives you the same rights and obligations as full ownership. You can do anything you like with your property under the blanket of the trust -- develop it, rent it out, sell it, even give it away. You can determine who inherits without the necessity of a Mexican will. And you don’t even have to be a resident of Mexico to own property. In other words, the government is bending over backwards to make certain their country is attractive to foreign investment.

One other piece of good news -- title insurance is available at a reasonable cost of a little over $5 per $1000 of value. The one area to avoid, unless you’re intending extensive development on a large scale, is “ejido” property. “Ejido,” or “commons land,” has a murky trail of ownership because, following the revolution, peasants were granted tracts for growing food meaning that, in some areas, the entire community must approve a purchase.

And lastly, property taxes hardly make a ripple. A yearly charge of $75 on a $200,000+ home is not unusual. Splurge on a villa or hacienda totaling $400,000, and more, and you might get stuck with a whopping $200 tax bill. Not bad when you compare it to what we’re all used to.

Is crime a problem?

Mexico is a large country. Spend time in Mexico City, and you need to behave as though you were in New York City, or any other world metropolis. Choose San Miguel Allende, and feel as comfortable as you would in any small American town. Select the popular tourist areas around Cancun, and be sure not to leave your camera and wallet unattended on your beach towel. Treat Mexico as you would traveling within your own country, and you’ll be fine. The March/April issue of AARP ran an extensive article touting Mexico for retirees in particular San Miguel Allende -- they don’t, as you know, recommend crime ridden dens of inequity.

How are the medical facilities?

Mexico is the home of some world class medical centers in the larger cities, often manned by American trained medical staff where you can expect to pay one quarter of the cost usually charged in US facilities.

Foreign residents are offered the IMSS plan (Instituto Mexicano del Seguro Social) which progressively covers more and more of your medical costs over a three year break-in period. It won’t cover preexisting chronic medical conditions (like diabetes), but it has no age restrictions and is renewable for life ... for a few hundred dollars per year.

Many people pay their medical bills in full saving their IMSS plan in case of a catastrophic event. An appointment with a specialist will run you about $72, a general practitioner about $44, a dentist for a checkup and dental cleaning about $44, a new pair of glasses about $62, and an eye exam free if you also buy glasses from the doctor who saw you. Prescription medicine is a fraction of what it runs in the US -- some make the trip to Mexico several times a year simply to fill prescriptions.

What if I don’t speak Spanish?

Well, you should since your newly adopted country’s mother tongue is Spanish. But if you don’t know a word, or your high school studies are rusty, don’t worry. Many reputable schools offer Spanish courses, especially in areas popular with expats. Choose San Miguel Allende as your dream home, and you’ll not only find first rate language teaching but many of the locals speak English. This holds true for Cozumel, Playa del Carmen, Cancun, even tiny charming Isla Mujeres, all places Tropical Pathways will visit on our investment tour.