Banking, Money and Taxes in Mexico
Banking in Mexico is fairly easy and straightforward for expats, as there are many modern financial institutions throughout the country. Nevertheless, large stacks of paperwork often need to be completed to satisfy the ever-thickening Mexican bureaucracy.
While being able to speak Spanish will make things considerably easier, even expats who aren't fluent should find it is possible to effectively manage their finances in Mexico.
Money in Mexico
The official currency in Mexico is the Mexican Peso (MXN), referred to simply as the peso, which is divided into 100 centavos.
Notes: MXN 20, 50, 100, 200, 500 and 1,000
Coins: MXN 1, 2, 5, 10, 20, 50 and 5, 10, 20 and 50 centavos
Banking in Mexico
Expats have a variety of options when it comes to banking in Mexico, with both local and international banks to choose from. The largest banks in Mexico are BBVA Bancomer, Banamex and Banco Azteca. Some international banks, such as HSBC, have branches in Mexico and are popular with expats, but do not necessarily provide better service than Mexican banks.
Opening a bank account
Expats must open a bank account at a local branch office and are unable to prearrange accounts from abroad. To initially open the account, expats need to present their visa, identification and proof of a Mexican address, along with an initial deposit. Additionally, banks may require that expats provide two references from referees who can vouch for them financially.
Expat citizens of the US or Canada can open an account using US dollars. Other nationalities cannot, although overseas accounts can be accessed via Mexican ATMs.
Those needing an account for daily transactions will want a chequing account that uses only pesos, as levies from ATM withdrawal fees can add up if used frequently over an extended period of time.
Many bank tellers in Mexico can speak English, but expats should nevertheless make sure to have any Spanish paperwork translated.
Expats should also take advantage of Internet banking when possible, which is offered by most major banks, to save time queuing in long bank lines.
However, most bills need to be paid in cash and cheques are often not accepted.
There is a universal ATM network spread out across Mexico and expats will rarely have to search far to find one, but expats should be mindful of ATM fraud and robbery in the large cities.
All major international credit cards are accepted at large stores in Mexico. Small grocery stores (tiendas) usually only accept cash.
Interest on Mexican credit cards tends to be very high (around 30 or 40 percent). To apply for a Mexican credit card, expats will need to have already set up a Mexican bank account. They will also need to provide proof of a good credit history. If this is not possible, then a deposit can be paid to secure credit card payments.
Taxes in Mexico
Taxes for expats in Mexico depend largely on whether they qualify as residents or non-residents. Residents are taxed on their worldwide income, whereas non-residents are only taxed on income earned in Mexico.
For tax purposes, expats are considered residents if they have their primary home in Mexico. This does not exclude expats from filing taxes in their home countries, although many countries (including the US and Canada) have tax agreements that protect expats from paying income tax in both countries.
Expatriate taxes, including tax rules for retired expats and homeowners, can be confusing, and expats are advised to hire professional help from experienced expat tax advisers.