Moving to a new country and starting a business is always exciting. But it’s also challenging, especially when dealing with a foreign culture and a new language. Many new expats want to know how to become an expat entrepreneur, so to provide you with a few answers we spoke with several successful expat entrepreneurs and a start-up expert about their experiences of doing business in Mexico.
Let’s look at some of the key points and steps recommended for anyone wanting to start their own business in Mexico.
Get professional legal and tax advice.
First, you must have the proper visa to carry out business activities in Mexico. You’ll also need to determine the best business structure to use and then navigate Mexican tax laws. While it’s tempting to do it yourself, good advice can save you money and stress in the long run.
Emilio Arteaga, a Canadian-born Mexican legal and business advisor I contacted, offered this advice: “Many entrepreneurs and foreign businesses face significant challenges regarding tax matters. For instance, without a working or investor visa, an individual isn’t allowed to get a Tax ID and a digital tax signature. Without them, the entrepreneur cannot conclude the company registration process or issue invoices.”
Arteaga also had this additional advice for aspiring entrepreneurs: “It is crucial for expats who wish to become entrepreneurs in Mexico to hire a lawyer. But if your budget is low, you at least need an accountant that can guide you through daily tax operations, such as issuing electronic invoices and filing tax returns. Tax is a delicate subject, and a business needs to pay significant attention to this.”
To assist expats in forming their new business, Arteaga created his Doing Business in Mexico website to share helpful information.
Do your market research.
Researching and testing the market for your business idea is crucial for success. You may also discover other market gaps and new business ideas.
Gov Vasanth, the founder of G-Spice – an ethnic grocery store in Querétaro offering countrywide delivery – is an Indian expat who lived in Singapore before moving to Mexico in 2012. “I moved to Mexico to start an Indian restaurant since there was a lack of authentic options. But during my investigations, I realized the lack of ingredients was a key reason for the absence of authentic Indian food. I wanted to solve that problem, and G-Spice was born.”
Vasanth believes Mexico is fertile ground for business. “There are a lot of opportunities in Mexico for niche businesses that serve expats. And the investment cost is low due to the favorable exchange rate versus some countries. I recommend aspiring entrepreneurs find a way to test the market on a small scale and see if there is a successful working model for the business. And then you can get into it on a larger scale.”
Digital businesses are becoming popular in Mexico.
Nowadays, remote working and running a business from anywhere are popular options.
Many expats have online businesses they manage from Mexico. Some entrepreneurs incorporate companies abroad, while others set up shop locally. And some businesses operate across multiple geographies.
Wesley Jacobs, a digital nomad from the U.S. and founder of the medical tourism company Apollo Medical Travel, works with healthcare providers in Latin America, including Mexico. He works remotely on his business from different countries in the region.
Jacobs told me, “When I visited Mexico, my mission was to build relationships with the best clinics and providers and help them attract international patients. Our network of clinics has expanded from Los Algodones and Playa del Carmen to Tijuana and Mexico City, as well as Costa Rica and Colombia. Since we started facilitating medical travel, we’ve helped patients save hundreds of thousands of dollars on their care for procedures ranging from eye surgeries to full mouth restorations. I’ve also had the opportunity to explore swaths of Mexico, with my all-time favorite spot being Mérida.”
To know more about why Mexico is a popular digital nomad destination, read our article “Why Are Digital Nomads Flocking to Mexico?”
Remember to get professional advice regarding taxes and other business matters in all relevant locations if your operations stretch across borders. Each business’s situation is unique, and the rules can differ widely.
Expect to face some challenges.
Challenges and frustrations are part of a business journey, especially when you’re in a new environment.
Vasanth said, “the main challenge in running G-Spice is dealing with the bureaucracy and the complicated rules and regulations to import products.”
Doing business in Mexico can be vastly different from your home country. So, patience and adaptability can help you navigate the difficulties.
Kathleen Atkins, a U.S. expat who owns several lix ice cream shops in Puerto Vallarta with her husband Todd, said, “We make gourmet artisan ice cream because we’re obsessed with ice cream, love natural products and making people smile. Supplies are the biggest challenge we’ve faced with running a product business in Mexico. You never know when something will run out, sometimes even the necessities like milk for ice cream.”
But Atkins loves her entrepreneurial life in Mexico. “We love our adventures and our business in Puerto Vallarta. We’ve learned to be more patient, to be part of nature, the intricacies of another culture. and we are ‘poco y poco’ learning another language.”
Which leads to the next salient point for establishing a business in Mexico:
You can operate with little Spanish if you’re catering solely to expats or running an online business. But improving your Spanish can significantly help your business activities and life in Mexico.
Vasanth from G-Spice said, “Dealing with the challenges is not everybody’s cup of tea, especially if you have a language barrier. It’s important to improve your Spanish to make things easier.”
Network and build relationships.
Building relationships is vital to growing a business anywhere. Good relationships can also help you create a loyal and repeat customer base, accelerating your growth.
Jacobs from Apollo Medical Travel said, “Mexico is hands-on. You need to build and nurture relationships. Focus on building trust, and you will go far.”
And get to know the local customs, culture and traditions. These can vary between regions.
Attend to the planning and administration of setting up a business.
Don’t forget to cover the usual steps of setting up a new business anywhere:
- Develop a business plan.
- Make a budget. While Mexico is a low-cost location compared to many countries, not everything is cheap. So, do your research.
- Get any licenses you need.
- Get good insurance.
- Understand the local labor laws if you wish to hire employees.
- Open a bank account. And research the best ways to transact across borders, if needed. You can get details in our article, “How to Open a Bank Account in Mexico.”
Always get professional advice if you need help with any of these steps.
Embrace the positives of the journey.
Many expats move to Mexico for a slower and more relaxed lifestyle, but in Jacobs’s case, a positive came with a challenge: “We are constantly fighting a losing battle against the sun, sea, and attractions of Mexico, which are gorgeous but can be detrimental immediately after a patient’s surgery.”
Keeping the positives and your “why” in mind can help you get through the challenges. And with proper planning and execution, you can join the growing community of expat entrepreneurs in Mexico and live your best life!
Expats In Mexico also has additional resources and examples for you if you are considering becoming an entrepreneur in Mexico.