Every day, more foreigners are choosing Mexico as their home base — whether in beach towns like Tulum or Playa del Carmen, or urban hubs like Mexico City, Guadalajara, or Zapopan. If you’re a freelancer, consultant, remote worker or small business owner from abroad, working (or planning to work) legally in Mexico, then RESICO (Régimen Simplificado de Confianza, “Simplified Trust Regime”) may be one of the most favorable tax regimes available to you.

What is RESICO?

RESICO is a tax regime created under Mexican law (effective since January 1, 2022) that offers simpler compliance, lower tax rates, and fewer administrative burdens for eligible individuals.

Under RESICO, individuals with annual gross income up to MXN 3.5 million (approximately USD 200,000, depending on exchange rates) may benefit from progressive tax rates that are generally lower and simpler than in other regimes.

It was designed to replace older simplified taxpayer regimes and to bring freelancers and small entrepreneurs into a more formal tax structure with less complexity.

Who Can Use RESICO?

Not everyone qualifies. To benefit from RESICO, you must meet certain requirements:

• Be registered in the RFC (Federal Taxpayers Registry) and be up to date with your tax obligations.
• Earn no more than MXN 3.5 million in total income during the prior year.
• Provide professional services, operate a business, rent property, or engage in activities allowed under the regime.
• Not be a majority shareholder or partner in a corporation restricted by law.
• Foreign residents with a permanent establishment in Mexico cannot use RESICO for income attributed to that establishment.

In short: it’s designed for individuals, freelancers, solo professionals, and small entrepreneurs — not corporations or multinational entities.

Why RESICO Is Attractive — Especially for Foreigners

1. Low and predictable tax rates
   Depending on your income level, your tax liability under RESICO may be very low compared to other regimes.
2. Simpler filings
   The system has fewer bookkeeping requirements and easier compliance.
3. Exemption from VAT (IVA) on exports of services
   Invoices to foreign clients are treated as exports of services, which are VAT-exempt in Mexico.
4. No withholding by foreign clients
   Generally, clients abroad will not withhold Mexican taxes on payments you receive.
5. Exemption from annual tax return
   In many cases, monthly payments under RESICO are considered final, which means you may not need to file an annual tax return.
6. Legal credibility
   Having an RFC and paying taxes in Mexico gives you stronger legal standing, avoids risks, and increases credibility with banks, clients, and authorities.
7. Flexibility
   If your income changes, RESICO allows you to transition to another tax regime when needed.

How to Apply for RESICO (for Foreigners)

1. Obtain your RFC
   Foreigners must register with the Mexican Tax Authority (SAT) using immigration documents (temporary or permanent resident card) and proof of address.
2. Update your tax profile
   File the notice to include RESICO as your tax regime.
3. Issue invoices (CFDI 4.0)
   All invoices must be electronic. For foreign clients, you can use the generic code established for non-Mexican taxpayers.
4. Make monthly payments
   Compute and pay your monthly income tax (ISR). For RESICO, these payments are usually considered final.
5. Monitor your income
   If you exceed the MXN 3.5 million threshold, you will be required to change regimes.
6. Maintain compliance
   Stay current with tax obligations to avoid penalties or being excluded from the regime.

Key Considerations for Foreigners

• Tax residency: Double tax treaties may apply depending on your country of origin.
• Deductibility: RESICO is simplified, so deductions are limited. If you have high expenses, another regime may be better.
• Banking and currency: Payments from abroad are converted into pesos for tax purposes. Record exchange rates carefully.
• Rental or local income: Income from renting property or running a local business may be treated differently than income from export services.
• Obligations in your home country: Filing in Mexico doesn’t always exempt you from obligations back home. You may still need to file tax returns or report foreign income.
• Immigration status: Your visa type (temporary or permanent resident) may affect your ability to register and remain compliant.

Example Scenario

Emma, a British graphic designer, moves to Playa del Carmen. She works with U.S. and European clients and earns about USD 80,000 a year (around MXN 1.4 million).

• She registers in Mexico, obtains an RFC, and opts into RESICO.
• Her invoices are treated as exports of services (VAT-exempt).
• Each month she pays her tax under the simplified RESICO scheme.
• Because she earns below the MXN 3.5 million threshold, she enjoys low taxes and avoids excessive paperwork.

This gives her peace of mind, legal protection, and credibility while keeping compliance simple.

Final Thoughts

For foreigners living or working in Mexico, RESICO can be an excellent option to stay compliant while paying a fair and often reduced tax rate. It’s especially suitable for freelancers, remote workers, and small entrepreneurs with international clients.

However, tax residency rules, double taxation issues, and personal circumstances vary. It’s always best to seek professional advice to make sure you are using the right regime and staying compliant both in Mexico and in your home country.

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