Jumping the US border is very risky!
Even though Mexico has received some negative press over the last few months with regards to swine flu there is no doubt that the country has made massive progress over the last decade and is now one of the most sought after destinations for those looking to make a new life. However, there are many different aspects of Mexican life, the Mexican economy and the Mexican government which need to be considered and addressed before you look to move to the country.
One particular thread in the Mexican section of the expat forum has been posted by a family, who are all American except for the husband who is Mexican. Illegal immigration has been a massive problem in America for some time and the gentleman in question is one of hundreds of thousands who crossed the border “uninspected”, and while this happened nine years ago he has been “found” by the US authorities and threatened with deportation. This is a very common occurrence in the US where initially the government and the authorities seemed to turn a blind eye to the massive number of illegal immigrants crossing the border, only to change their minds as the economy turned down and unemployment began to increase.
While traditionally we tend to cover questions and threads where people are looking to move to a new country to start a new life, this is a slightly different angle in that the Mexican husband has agreed to take a “voluntary departure” which will see him and his family move over the border into Mexico. We will be covering the various issues which will arise and how the problem of dual citizenship for their four-year-old child can be addressed and how this can help the family as a whole.
Facts and figures about Mexico
Mexico is one of the largest countries in the world with a population of 111 million people and a gross domestic product of $1,559 billion. For many years the country was plagued by financial ruin, a plunging currency and a lifestyle which saw a large number of the population living in shanty towns on very little income. While there is still some way to go to improve the way of life for many people in Mexico there is no doubt the country is moving in the right direction and is becoming one of the regional powers in Latin America being the only member of the Organisation for Economic Co-operation and Development (OECD) in South America.
The climate in Mexico
Mexico is effectively split in two by the Tropic of Cancer and has a very temperate climate in the North, consisting of cool temperatures in winter, and fairly constant temperatures in the South. As you would expect, there are very many different climates and environments in Mexico with some areas as high as 1000 m above sea level and the valleys around about sea level. The average rainfall in the country is 200 cm although, as we mentioned above, this can vary markedly between the North and the South of the country. Nonetheless, there is a growing tourist industry in Mexico with many of the coastal regions attracting massive numbers from around the world and indeed many of the inner cities and towns also proving very lucrative for the countries tourist sector.
The Mexican economy
While the economy of Mexico is now ranked as the 10th largest in the world there is no doubt that the Mexican economy has had a very rocky ride over the last few decades. There was a massive funding crisis in 1994 and the fact that the country is so closely linked with America, with regards to trade, saw the US authorities offer assistance which effectively brought in a new regime and a new economy started to form. This saw a fundamental change in the style of government, the national budget and slowly but surely the Mexican economy started to improve as did the prospects for the future.
Even during the 2002 South American crisis it was Mexico which held firmer than any other country in the region which in time has led to an increase in the country’s credit rating, with the likes of Moody’s and Fitch, which opened so many doors for the Mexican government. Not only did the new investment grade ratings allow the government to refinance existing debt on substantially lower interest rates but it also released the shackles from many investment companies and investors around the world and money began to pouring into the country.
The country operates on a free-market basis and has many new sectors to work on in the future and a whole host of new trading partners who all want a slice of the Mexican cake. This has led to a significant reduction in poverty which has fallen from 24.2% of the population to 17.6% and in more rural areas, which have been hit much harder, the fall has been more marked from 42% to 27.9%. However, there is still concern about the relatively low wages available in many parts of the Mexican economy and there is still a need to reduce the number of the population living in poverty.
Politics in Mexico
A quick look back at the history of Mexico shows that the vast majority of problems, prior to the recent resurgence in the country, can be traced back to political uncertainty, political fraud and an unwillingness to invest in the economy. The 1994 funding crisis, which saw Mexico on the verge of collapse, was a significant turning point in the history of the country as all political parties agreed to work together for the benefit of Mexico as a whole. The Mexican government structure is loosely based upon the American situation with Democrats and Republicans holding office and a three tier structure of the federal union, state governments and municipal authorities.
The significant improvement in the political environment, which is now more stable than it has been for many years, is perhaps the key to the future of Mexico and indeed the key to the changes since 1994, which have proved very fruitful.
Moving back to Mexico
The thread in question has been posted by a family of three, the husband is a Mexican national, the wife is from America and their four year old child was also born in the States. They have a problem on their hands because the Mexican husband is alleged to have crossed the border “uninspected” nine years ago and has now been found by the US authorities who have threatened him with deportation. The family are looking to move to Monclova, Coahuila in Mexico and begin a new life. However there are a number of issues which need to be addressed before they can lay down their new roots and begin a new life.
Mexican national insurance
This is an issue which has been specifically mentioned by the lady in question as she is obviously concerned about the welfare of her family in Mexico and the health services available. It seems as though there are three separate health schemes in operation in Mexico which are:-
ISSSTE
This is the scheme operated by the Mexican government for employees of the state and while it does vary between the various departments it is widely known as one of the better schemes.
IMSS
The IMSS is a scheme for those working in private companies in Mexico who are legally obliged to include their staff in this particular health program. However, if you’re moving to Mexico you need to ensure that your employer is part of the IMSS scheme otherwise you may well find yourself uncovered for any health issues you may experience.
Seguro Popular
Seguro Popular is a health scheme in Mexico which effectively covers those who do not qualify for the ISSSTE or the IMSS. It is a private health system which will need to be funded by the benefactor themselves although it is renowned as a fairly cheap health insurance scheme. However, a cheap scheme in the UK or any other developed country is very different to a cheap scheme in Mexico where incomes can be very low and free money non-existence for many people.
Freelance workers
There has been a growing trend in the Mexican employer market for some employers to force their employees to work freelance which effectively reduces any liabilities the company will have regarding membership of the IMSS scheme and will pile added pressure and extra cost on to the employees in question. If you work for a company, i.e. not freelance, who will not sign you up to the IMSS it is worth knowing that this is actually illegal and the firm in question can face serious consequences.
However, due to the relatively low pay in many areas of the Mexican economy this employment black market has continued to thrive with many people not willing or not able to blow the whistle. There is no doubt that many Mexican companies have taken advantage of the dire situation which many locals find themselves in and do regularly flout the rules.
Documentation required when moving to Mexico
While the husband in question is a Mexican national, with no issues regarding paperwork, this is not the same for his wife and his child. There is plenty of advice on the thread regarding the documentation required with an FMT tourist document required which will last for 180 days with the person given 150 days to apply for FM3 or FM2 visas. It is vital that the visa process in Mexico is followed to the letter because ultimately the wife and child involved could well become illegal immigrants themselves if the relevant paperwork is not in place at the time of moving to Mexico.
It is also worth knowing that if you’re looking for employment in Mexico and you are not a Mexican national you will need the permission of the immigration authorities to begin working. You will also need to be supported in your application by your employer otherwise there will be issues in the future which could see you deported from the country.
Dual citizenship
The child in question obviously has an American mother and a Mexican father and is therefore eligible for dual citizenship for both America and Mexico. This is something that should be applied for immediately upon moving to Mexico because it can also assist the mother’s application to stay in Mexico with her husband and child. It is simply a case of visiting the US embassy in Mexico and obtaining a Mexican birth certificate, although you will need the relevant US documentation to complete this process.
While we have covered the employment issues above, the Mexican authorities still require non-nationals living in Mexico to confirm their income, whether from Mexico or a foreign land, to show that they are able to support themselves. This is a process which will be repeated year after year after year although the posters on the forum appear to have some savings set aside in the US which they can use as collateral or in fact draw down from to cover any shortfall in their Mexican living budget.
The Mexican currency
Even though the political and economic situation in Mexico is nowhere near as volatile as it has been in the past, many people have had their fingers burned with large fluctuations in the Mexican currency. As a consequence, a number of posters have suggested that the family in question retain their investments in US dollars and draw down income as and when required and then convert into the local currency. This would seem to be a sensible suggestion although as ever with financial transactions you may need to take professional advice.
Setting up a business in Mexico
There are various comments on the thread, both from the family in question and other posters, but one subject which is covered in great detail is their idea of opening their own business in Mexico. One suggestion is to acquire children’s clothing in America, where it is significantly cheaper than in Mexico, and bring it back over the border on a monthly basis to sell in their store. There are obviously various taxes to consider, the cost of travelling over the border and the price which they can demand in Mexico. On the surface it does seem possible that a business of this nature could thrive in Mexico but as ever there are others potential pitfalls which need to be avoided.
Conclusion
We have but touched upon the massive number of comments and suggestions made in the thread and we strongly recommend that you visit this particular discussion if you are looking at a move to Mexico. The subject of deportation for Mexican nationals in America is one which has become more commonplace over the last few years as the US authorities continue to clampdown on illegal immigrants. It is unlikely that the authorities will wind down this particular activity in the short to medium term as they are looking to protect the US job market for US nationals.
While Mexico has been in the news of late with regards to swine flu it would appear that the government is well on top of the situation and instances of infection have fallen substantially. The country is enormous in size, heavily populated and has one of the fastest growing economies in the world, an economy which only really came to life in 1994 after the budget crisis. Even though there is still much work to be done to improve various areas of the Mexican economy, the rates of poverty and it’s standing in the worldwide business arena, this is a country which does have a lot going for it.
If the relative stability in the political arena continues into the future then there is every chance that the Mexican economy will thrive, attract more overseas business and ultimately attract more overseas investors and expats. However, you need to be aware of the paperwork required when moving to Mexico and the expectations of non-nationals!
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I think there is one error in the article pertaining to the dual citizenship of a child born in the USA to a Mexican parent and a US parent. The child will have a US birth certificate but the application for a Mexican birth registry should be done at the nearest Mexican Consulate in the USA, not at a US Consulate or Embassy in Mexico.
thank you for the very informative newsletter i enjoyed it very much