The USA is waking up this morning to a new president after Trump won a shock victory, and Hillary Clinton is expected to make her concession speech this morning.
This morning the message was plain and clear on social media. People from around the world, opened up to those in the United States with empathy over the result of the election. No matter what those in other countries think of the USA government, the great majority of the world came together with expressions love and care for the people of the USA.
Those in many other countries understand what it is like to live in a corrupt government with inept politicians at the helm. For many, they have lived their entire lives hoping for change. And, this morning they opened their arms to console those who feel at a loss. And, they opened their borders and homes.
The people of Mexico, always warm and caring, filled the postings with memes of, “Welcome to México to all need a new home” posted by a Mexican teacher, or “Bienvenido a Mexico, mi Amigos!”
And the word sent back from the USA, was along the same lines, “My Mexican friends, if you guys are hiring right now, wherever in Mexico, please let me know. I am actually being very serious right now!” or as one meme put it, “That does it, I’m moving to Mexico!”
Indeed, for months, many USA citizens have threatened to leave the country pending the results of the presidential election.
“If Donald Trump wins in November, I’m moving to Mexico!” Now that Trump has become the president elect, the phrase has changed to “I booked my flight this morning. Adios amigos!.”
According to at least one poll, 28% of Americans have at least considered leaving the United States for good “for a country such as Mexico or Canada” if Trump is elected. Of those who said they’re considering fleeing, 14% rated the probability as “very high”. Google searches for the phrases, “move to Mexico” and “move to Canada” spiked dramatically, hitting levels never before seen.
Realtors in Mexico began posting listings in earnest this morning, and of the two contacted this morning, both reported being swamped with calls from the USA. Even the online dating sites saw a spike in sign ups of USA citizens looking for love matches in other countries. One, offered a special service for “Trump-fleeing Americans Seeking Love in Mexico.”
If you are flexible and have in-demand skills, you can pretty much leave it all behind and move to Mexico, where you can find work for a USA company. You will be paid in dollars, deposited directly into your Mexico bank account. You will be able to live at 1/2 to 1/5 of the cost of living in the USA, which means a vastly improved lifestyle.
If you are older and living on a pension, then moving out of the country to Mexico offers a much better opportunity. As the current social security earnings for retirees averages just $1,300 USD a month, that amount buys you a lifestyle in Mexico well above that of most high earning Mexicans. Many retirees live in Mexico for as little as $350 USD a month, and end up with a surplus that allows them to travel, entertain and live quite well.
The current USD/MXN exchange rate is hovering at $20 MXN, up from $9.65 a decade ago, and appears to be headed to $23 soon, according to money market experts.
And, best of all, you can buy a home in Cuernavaca for a median price of $66,000 USD, that is equivalent to a home that might cost $300,000 USD in the USA.
Many USA citizens live in Mexico, while continuing to work for the same USA company where they have worked for years. Albeit, they become a virtual employee. If you are currently sitting behind a desk all day answer the phone and working on a computer, there is no reason why you cannot continue to do the same work from anywhere in the world.
Many employers would gladly entertain the idea of freeing up the space in their office and the reduction of employee costs and benefits and allow you to work from “home”. Some examples of those who are currently working from a “distance-based” office are those in marketing, sales, accounting, and data processing.
You Need a Visa
There are two kinds of immigration permit: Non-Immigrant and Immigrant:
Non Immigrant Permits are for people who intend to visit Mexico for a specific purpose and then depart;
Immigrant Permits are for people who wish to gain long term permanent residence in Mexico.
A Visitor’s Permit is issued when you arrive in Mexico (by air, or travel inland by road beyond the ‘free border zone’) by completing a Forma Migratoria Multiple (FMM): these forms are issued by airlines, and are also available at ports of entry. The Visitor Permit is valid for up to 180 days and cannot be renewed. Upon its expiry you will need to leave the country and return to renew the visa. Most will travel to the border once every six months, only to step across the border to do some shopping, have lunch and return the same day.
There is a fee of about USD $22 for this permit, which is usually included in the price if your flight (under taxes and fees). If you arrive by road or ship, and travel beyond the ‘free zone’ near the border, you will have to pay for this permit separately.
Temporary Resident Visa
Mexico operates what is known as a Temporary Resident Visa, intended for people who wish to live in Mexico for more than 6 months and not longer than 4 years. The Temporary Resident Visa is a renewable, long-term (more than six months) permit which gives non-immigrant temporary residency status to the holder.
The visa is issued for one year, and can can then be renewed for a further 1, 2, or 3 years (i.e. 1+3, 4 years max); this visa can optionally give work permissions, and allows unlimited entries to, and exits from, Mexico. This means that it gives a person holding the permit the right to live in Mexico for up to 4 years under terms as set out in the visa.
The cost of a Temporary Resident Visa is $3,596 pesos (for one year) or approximately $182.02 USD.
Permanent Resident Visa
The Permanent Resident Visa is intended for people seeking permanent residency status in Mexico, or those who may seek eventual Mexican Citizenship. You do not need to be a Temporary Resident first to become a Permanent Resident later, provided that you fulfill one of the other requirements needed for permanent residency.
The cost of the visa is: $4,383 pesos or approximately $221.76 USD.
To apply for and be granted a permanent resident visa, the applicants must:
have certain close family connections in Mexico, or
apply for retirement status and prove they have sufficient monthly income (or substantial assets) to support themselves, or
have 4 consecutive years of regular status as Temporary Resident, or
have 2 consecutive years of regular status as Temporary Resident where that the Temporary Visa was issued through marriage to a Mexican National or a foreign permanent resident, or
meet a minimum score under the Points System*, or
be granted residency on humanitarian grounds or through political asylum.
If your goal is to seek long-term residency in Mexico, or to become a Mexican Citizen, you should apply for a Permanent Resident Visa.
Upon receiving immigrated status, you will receive a plastic card that looks like a driver’s license. This card enables you to pass through Mexico’s borders as if you were a Mexican national.
Giving Up Your Citizenship
Some think that they would gladly give up their USA citizenship and move abroad, but that may not be your best option. Most USA expats keep their citizenship and choose to live in Mexico on a Residency Visa that can be purchased for 10 years at a cost of about
You may leave the United States, but the USA won’t let give up your citizenship easily. Specifically, you may be residing overseas but the IRS insists that you keep filing tax returns. It doesn’t matter that you don’t live in the USA, don’t have any income or assets in the USA, or do not even visit any more. All that counts is that you’re still a citizen.
The USA is one of two countries in the world to tax non-resident citizens on their worldwide income, and the only major industrialized nation to do so. So before you run off to Mexico (or any other country), you might want to be aware of just what you’re signing up for.
You may end up with a lifetime of living under two tax regimes and potentially paying two sets of taxes. The good news is that the USA will normally not tax you twice. If you show that you paid taxes in Mexico, that amount may be deducted from any taxes owed to the USA. Also, if you own a house in Mexico, under USA law, you may find yourself paying capital gains tax when you sell it at a profit.
Many USA citizens living in Mexico, haven’t lived in the USA since their birth or childhood; some may not even have social security numbers. That doesn’t matter. They were born in the USA, and if they haven’t relinquished their citizenship – a costly and cumbersome process – they have to keep filing tax returns and being aware that they can’t invest in some kinds of mutual funds that might be standard products in their home countries but might trigger big tax liabilities in the USA.
While the number of USA citizens who have relinquished their citizenship, hit a record last year, that number still only just approached 4,300. The reason is the sheer complexity involved. The USA doesn’t care that you left because you didn’t like the political regime. They look at objective facts, and those facts have a tax consequence. Then the question is whether you are defined as a ‘covered expat’ who will have to pay an exit tax or not.
Many ordinary Americans are not “covered expats” – you’d have to be fairly wealthy, outside your retirement accounts and home – but just the paperwork proving it is daunting, and the costs of doing that paperwork can be intimidating. And there aren’t many people who deal with expatriation. You should expect to be committed if you are going to relinquish your USA citizenship.
The USA fought hard to pass the The Foreign Account Tax Account Compliance Act (Fatca) a few years ago. It passed under the guise of rooting out tax evaders, but there was the second and not openly discussed matter of attempting to make it difficult for USA citizens to live outside of the USA, where they did not pay sales tax on the USD’s spent outside of the USA.
The government’s share of the sales tax is looked at as a deficit that they did not want to easily give up. Thus the Fatca, was also an attempt to get those millions of USA citizens living elsewhere to return to the USA.
Fatca has made it more difficult for USA citizens to open a “dollar account” in foreign countries. It became far too costly for the foreign banks to comply with Fatca, which involves a monthly report to the USA on all money transfers of any USA citizen holding an account at the bank. As a result, USA expats are becoming, in the words of one advocate for “Accidental Americans”, they became “financial pariahs”.
In the beginning, a growing number of “Accidental Americans” or long-term expatriates are getting letters from their banks threatening to close their accounts if they don’t prove, within 30 days, that they have renounced their USA citizenship. Other banks, not wanting to lose their USA customers, simply saw the paperwork as a cost of doing business with the USA citizens that were among their largest depositors. Today, there are many banks in Mexico who are quite happy to open an account for USA citizens.
While more difficult to open a USD account in Mexico, you can open a MXN account quite easily. And, you can still make a monthly deposit in USD, but only at the then current exchange rate.
Also, it is possible to find accountants in Mexico that are able to fill out a USA tax return, as there are companies (some owned by USA accountants) who are open year round to work with the expatriates.