Mexico is seeing plenty of economic interest in the recent years and offers great retirement opportunities to those who are willing to relocate and who want a good quality of life. But before you pack your bags, there are a few basic things you should know.
As an expat the taxes you pay will depend on your situation. If you own a property in Mexico you will have to pay real estate taxes. You will also pay sales tax at shops and value-added tax when you eat out at restaurants. In Mexico a value-added tax is applied to most goods and services. Value added tax is 16% in most of the country and 11% in border areas. It is wise to meet with a tax expert who specializes in international tax before you move to Mexico. They can consult you on how you can minimize your taxes.
You will owe income tax if you have a job, run a business, rent out a property you own, or hold an interest-bearing bank account or security in Mexico. In most cases you will need to file a tax return. It is recommended to get a good tax advisor in Mexico if you have a job or own a business.
Mexico City, with its 22 million inhabitants, is not completely safe, especially in some its marginal neighbourhoods. The Ministry of Foreign Affairs recommends caution throughout the country, but regions such as Oaxaca and Guadalajara have been considered safest for tourists and expats. You should however follow some basic safety rules such as avoid driving at night and driving with the doors of your car locked. Do not wander in isolated or rowdy neighbourhoods, use the priority toll roads, and discard any isolated shortcuts. The state of Oaxaca is listed as the safest place in Mexico and should be considered when looking to travel, invest or retire in Mexico.
(Safety in Oaxaca: https://www.ownmexico.org/safest-places-to-visit-in-mexico/)
Health and Welfare in Mexico
In terms of protection, on paper, Mexico offers almost the same healthcare protection and services as Canada and the U.S. The Mexican law provides social security for all workers, managed by the IMSS (government institute of social security) and the ISSSTE (for civil servants), and intended to cover occupational hazards, diseases, pregnancy or the disability. Funded by both employer and employee contributions, as well as taxation, IMSS can provide benefits up to 100% of salary in case of disability resulting from an accident at work, and 60% in case of illness and other accidents. An estimated 65% of the Mexicans take advantage of this insurance. For others, there are hospitals run by public bodies providing cheap services. Private clinics offer a good quality of care, but prove to be very expensive and therefore require a mandatory subscription to a supplementary insurance.
Finding a Job in Mexico
Mexico is one of the so-called emerging countries. However, finding a job is a challenge, as the job market remains precarious. You should be aware of the fact that many job offers circulate in the hidden network.
Looking for a job in Mexico can sometimes be an obstacle for foreigners. Relationships are very important, and it is better to be introduced by someone when applying. Finally, note that a good command of Spanish is obviously necessary to succeed professionally. Mexico still offers good employment prospects, especially in high-tech sectors such as finance, telecommunications, retail, automotive and technology, as well as in the field of tourism (hotels, restaurants). If you are simply looking to retire in Mexico, than this should not be an issue of concern.