Creating a corporation is not for everyone.
For one, it costs no less than $3,000 dollars to create a foreign owned Mexican corporation.
you need to get a tax payers ID number and an accountant to make monthly tax reports even with no income generated.
A CPA will charge you no less than $30 to $40 dollars a month to do those reports, multiply that by 12 months and it sets you off $480 dollars add 16% VAT, that comes to $76.8, resulting in an annual expense of $556.89 for tax reporting, plus the $3,000 you spent in incorporating the company, now you are off $3,556.80 in the first year.
When the corporation buys a property it will only save $2,000 dollars compared to a fideicomiso.
Yes, you could say: "Well the fideicomiso requires an annual handling fee of $550", and you are right, but just the tax reporting of your corporation costs you $556.80, where did you actually save by creating a corporation?
Also, when you create a fideicomiso, you become a homeowner, and if you get legal status, you may save up to $4.7 million pesos on the taxable gain of the sale if you ever do sell the property, whereas as a corporation you do not get this exemption because you are not a homeowner, you own a corporation with an asset. Now if you are to have a business, then you could argue that the situation is different, but still I would challenge that decision, to a point, because under a corporation you do not get the estate planning advantages you would enjoy under a fideicomiso.
If after reading this your response is similar to that from a gentleman who reacted to this article on a FB forum with this: "'what racket to get paid $550/yr just to keep a piece of paper in a file cabinet!" Well, to him and people who think like him, I have this to say:
You have options:
1. Become a naturalized Mexican and save the fideicomiso.
2. Create a fideicomiso.
3 Create a corporation to avoid the fideicomiso.
4. Buy property in the mainland away from the border and coasts where you do not need a fideicomiso nor a corporation, or
5. Not to buy property in Mexico at all.
Think about it.
Managing Partner, Law Offices of Rafael Solorzano.
From the U.S. 011-52-664-188-7001.
Within Mexico: 664- 188-7001
Find us on FB at Baja Legal Advice.