I have seen a lot of information on the requirements for freelance workers, including independent English teachers like me, to set up the proper employment paperwork in Mexico, but none of it has actually been complete. Especially not the information provided by the government– neither by immigration nor the tax man, and no one knew much about how the Registración de Extranjeros fit into the bigger picture, either.
It’s been a disjointed process. There is no overview, ever, for any part, and no one in the separate phases seems to feel comfortable commenting on what’s necessary for the other parts. Sometimes they don’t tell you that there are other parts.
I am just going to tell you what I did, from beginning to end. From converting my tourist visa to a work visa all the way down to getting my Recibos de Honorarios (tax receipts) printed. Even how I found my accountant and what we talked about when I found her.
To give you an idea of time, I started the whole thing in December, and I hired my accountant in May. I have organized the process into 11 steps.
Step 1: Arrive in Mexico
Get an FMT tourist visa at the airport when you pass through Migración. Do not tell them you are coming on business; you will not know for sure that you are here on business until you have found work.
Step 2: Find work
All of the employers I spoke to were happy to hire me in good faith that I would get my work permit before my tourist visa expired.
Step 3: Apply for FM-3 authorization
(separate from work actual FM-3, see Step 4)
I applied for permission to work independently on an FM-3, the non-immigrant visa. The visa lasts a year. I can renew it at the end of the year assuming I can prove that I have paid my taxes. I could also convert it to an FM-2, the immigrant’s visa, which is the path to long-term settlement. Here are the steps I took to get authorized for an FM-3. [Note: see Guy Courchesne’s comment– Migración moved the system online April 30, though I think my experience may still be useful.]
Step 4: Apply for actual FM-3
After I got authorized, then I had to apply for the actual document in a separate process. Here are the steps I took to get an actual FM-3.
Step 5: Register as a Foreigner, get a CURP
The CURP is the number you get once you’re on record in the government’s population registry. At Migración, I asked if the CURP for Extranjeros meant another trámite (procedure). The woman shrugged and gave me a phone number to call and told me the office was nearby. I couldn’t find it. I asked Lesley, another gringa who had coincidentally just gotten her CURP, because the govt has begun a public campaign (that I was unaware of) to register everyone.
When you register for your CURP, as a foreigner you are automatically in the Régistro Nacional de Extranjeros. Lesley gave me the Registro Nacional de la Población website and that whole thing was really easy. I went to an agency with the paperwork requested on the site, and they had the CURP barcode printed out for me in 5 minutes. The woman at the office instructed me to cut out the CURP card and have it laminated (“enmicado”). I keep it paperclipped in my FM-3.
Step 6: Register as a taxpayer
I made an appointment online with the taxman/Hacienda/RFC to do this. I found a decent explanation of this process on Inside Mexico, a site for expats, though I have a few things to add to it. I arrived five minutes before my appointment and by the time I got through reception my number was being called. However, appointment availability is normally about three weeks out– if you can’t wait that long you can go to the office and register for a same-day appointment and wait your turn.
A chick who looked about 17 went through my forms with me (in very careful, clear, and slow Spanish), entering the data into a computer. She asked me a couple of questions about my business status– as a self-employed freelancer, I am a persona física. I do not have other employees. The service I provide causes IVA (value-added tax). When we were done, she printed out my cédula, the taxpayer ID code, on a small piece of paper that I have since photocopied and enmicado, so that I can carry it around with me (see expenses, below).
There were two forms that I was supposed to ask for and didn’t, out of ignorance, that my accountant later told me about: the clave CIEC, which allows her to pay my taxes for me online, and the Tarjeta Tributaria. I haven’t gotten these yet and don’t really understand what they are– she is going to go with me to the tax office to get them next week.
Step 7: Print Recibos de Honorarios
To get these printed, I found a print-shop (that also cuts keys) authorized by the government. Since it was my first time, they needed the comprobante de domicilio (a cable bill), my FM-3, and my cédula. They took copies and had me come back the next day. My recibos cost 395 pesos for 100, but I got them done in Polanco, an affluent neighborhood. I have heard you can get 100 for 250 if you shop right.
Step 8: Get an accountant
The tax system is complicated and changes a lot. Pretty much everyone who works independently has an accountant, or is at least friends with one who occasionally helps them out. I hired the sister-in-law of one of my students. I am paying her a lot (600 pesos a month), but she is really holding my hand. I am content to stay with her until I know what I am doing. Plus she is cool.
Step 9: Claim expenses
As a persona física, I can claim a lot as business expenses. As legit as I am trying to be, this area gets a little grey because you can’t claim an expense if you can’t get a factura, an expense form that retailers fill out and give you in addition to your receipt. You can’t get facturas for public transport, for example. My accountant’s advice to me in this case was claim other, factura-ble transport to compensate, for example airline tickets. You can even claim your rent in theory, but for most of us aliens that is difficult because your name has to be on your rental contract for this.
When buying something that you can claim, you ask for a factura when you pay. They need your cédula card to do it– as I mentioned, I photocopied mine with my address written on the back and had it laminated (enmicado), and I carry it around with me.
Retailers are really used to filling out facturas, so don’t be shy asking.
Step 9: Give recibos de honorarios to employers/clients
I am going to do this next week for the first time. Will update. Once I have been issuing these for a while, my schools can give me a Constancia de Pagos y Retenciones to show that I have been legit with them, consistently.
Step 10: Pay taxes monthly
My accountant is going to handle this. They’re due on the 17th each month. I just give her my facturas and recibos for the month for her to calculate what I owe. The goal for minimizing taxes is for expenses to balance out earnings. I think the lowest tax bracket starts at 15%, and I am also going to be responsible for paying IVA (16%) and one other tax that she told me about and I forget what it’s called.
Step 11: Keep all documentation
You need to prove you have been paying taxes in order to renew your visa.